Low wages, low costs and low productivity - they are part of a vicious circle. Can increased productivity help break that circle?
‘Is Productivity the key to funding Living Wages?’ That is the main question in FWF’s latest discussion paper, designed to explore the relationships between productivity, efficiency and living wages.
Stakeholders working with FWF often identify productivity or efficiency increases at factories as ‘the solution’ to living wages: if factory productivity is increased, there will be enough money to improve wages.
FWF experts Doug Miller and Klaus Hohenegger have published a comprehensive article entitled ‘Who pays for a higher wage for garment workers?‘ in industry publication Just-Style.
Focused on statutory minimum wage increases expected in several countries, the articles highlights the importance of calculating the minute cost of labour and making the wage component of garment prices visible during buyer-supplier negotiations to ensure workers are paid what they are legally due.
‘Start paying higher wages. Now. Analyse what worked and what didn’t. And then keep going.’
This sentence summarises FWF’s advice to brands that seek to make real strides towards living wages in their supply chains. And it offers more concrete advice on how to do this in Living Wages: An Explorer’s Notebook.
Use the tools below to further support efforts to raise wages in your supply chain.
It is a basic tenant of economic theory: Increased productivity levels are tied to higher wages. In essence, if a worker can produce more widgets in an hour, he/she makes more money for that time.
Clearly productivity needs to be part of the living wage discussion. But how does this work in the garment industry? How can workers produce more garments per hour?
The FWF approach to living wages is pretty simple:
1. Methodically identify and investigate the obstacles to living wage implementation
2. Develop tools to overcome the obstacles
3. Get out there and do it
At FWF we are doing all three of these in tandem. Of course, of these three tranches of work, the third is the most important for workers. And to take effective action on wages, FWF members and stakeholders need tools. To this end, tool development continues.