Payment of a living wage is a key point in the FWF Code of Labour practices – and one of the most difficult elements to implement.
Wages are linked to the prices brands negotiate with factories, however several complex questions need to be addressed to ensure that workers see actual improvements.
The Fair Wear Foundation-European Outdoor Group Living Wage Study is designed to address one of the main questions – What is the relationship between product pricing and wage levels. The study will examine what happens to prices of typical products when wages are increased to meet a variety of living wage benchmarks.
The participation of seven FWF members from the outdoor industry, who will provide actual cost data on a variety of products to FWF for analysis, is a significant milestone. The ability to forecast the impact of wage increases on the costs of real products will provide clear guidance to the entire outdoor industry on the actual effects of moving towards living wage benchmarks. Important elements of the study will also be applicable to other apparel markets. FWF believes that the willingness of the participating brands to share such sensitive information indicates a serious level of commitment to the issue.
In early 2013, a report will be published that will summarise the study’s findings, and will make use of the FWF Wage Ladder Tool to illustrate the results.
The FWF member companies that will participate in the project are: Deuter Sport and Vaude Sport (Germany), Haglöfs (Sweden), KTC Limited (Hong Kong), KJUS, Mountain Force and ODLO Sports (Switzerland).
The study is being supported by the European Outdoor Group, an association set up in 2003 to represent the common interests of the European outdoor industry.
The FWF-EOG Living Wage Study is part of a broader set of recent FWF initiatives designed to make progress towards living wages. Related projects include:
The FWF Wage Ladder tool was launched in 2011. The Wage Ladder, supported by Dutch trade union CNV Internationaal, allows the wages paid at any factory to be compared against a set of wage benchmarks which have been created by NGOs, labour groups, business associations, and government agencies. The simple-to-use tool generates a clear, easily understandable visual layout that shows where a factory’s wages fall short in comparison to these benchmarks.
FWF recently announced a project to examine the relationship between wages and productivity in Macedonia, also with the support of CNV Internationaal. The goal of the study is to identify areas where productivity increases can be used to support better wages for workers. The project will also develop the second generation of FWF’s Wage Ladder tool.
In 2011 FWF carried out a project in cooperation with Fairtrade International. The aim of the project was to investigate how FWF’s third party verification approach could contribute to FLO’s Fairtrade cotton approach. The project included an analysis of how wage increases in two Fairtrade Cotton supply chains in India would affect prices. FWF found that if existing wage levels were increased towards Asia Floor Wage levels, the T-shirts would only increase 1 to 3.5% in price. Current pricing systems, however, mean that those price increases are escalated throughout the supply chain, compounding price increases at the retail level.