Key Lessons for Living Wages from the Bangladesh Accord

Date: 03/04/2015

A guest blog by Jenny Holdcroft, Policy Director at IndustriALL Global Union

jennyholdcroftThe Bangladesh Accord has seen an unprecedented level of cooperation between global brands and trade unions which has enabled comprehensive, industry-wide solutions to be applied to fire and building safety in Bangladesh’s garment factories. This experience has opened up possibilities for new solutions to be found to other entrenched supply chain rights challenges, including the struggle for a living wage.

There is a huge gap between what garment workers are paid and what they need to live on. Individual efforts by garment brands to implement higher wages in their supply chains have proven unsuccessful and are not able to guarantee that increases will be passed on to workers, even if prices rise. Strategies that target wages at the level of individual factories will never be able to drive up pay and conditions while buyer demands for lower labour costs suppress wages and conditions in a race to the bottom. There are limits to how far an individual factory or business can step ahead of its competitors and unscrupulous buyers will simply move to suppliers with lower standards.

What is needed is an enforceable mechanism to deliver living wages to all workers, no matter which brand they make clothes for, pushing up wages across the industry and creating a level playing field for buyers and suppliers.

BANGLADESH, Dhaka, Leonie 8 Apr 2014 - 70This is industry-level collective bargaining, delivering comprehensive agreements between unions and employers and taking labour costs out of competition. Industry bargaining enables wages and working conditions to improve for all workers in an industry, regardless of whether the multinational company that their factory supplies to has a progressive CSR program, or even whether their factory is part of a global supply chain at all.

But today more than 90% of workers in the global garment industry have no possibility to negotiate on their wages and conditions and so are not able to claim their fair share of the value that they generate. The almost total absence of industry wage bargaining in the garment industry has left workers reliant on ineffective minimum wage mechanisms for any wage increases. While these at least establish a common floor, the wages that result are well below the level of a living wage.

To break this cycle, IndustriALL is working with a number of major garment brands towards establishing industry collective bargaining in production countries, supported by reform to purchasing practices which will enable prices to be paid that take account of negotiated increases.
The Bangladesh Accord shows that a new model of cooperation between global buyers and trade unions is possible. Applying this to wage fixing through supply chain collective agreements has the capacity to finally end the competition to drive down wages and pay workers a living wage.

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