Towards an intervention

Three key input areas for sustainable living wages

The realities of today’s global garment industry normally keep workers’ wages low. And they limit the impact of various measures for wage increases. The imbalance in power, and the way it’s hard to hold any one player accountable in garment production make it harder to raise wages. And part of this is because brands don’t always step up. In many cases, even if the legal minimum wage goes up in a garment production country, brands still insist on paying the same price, or somehow even less, for their products.

Our research and experience have shown that three key input areas are vital when it comes to making a sustainable living wage a reality:

  1. Money to cover the added costs of wage increases
  2. Social dialogue for setting, updating, and verifying higher wage levels
  3. Accountability systems to ensure fair costing and traceability

Money

There is no way around it: wage improvements cost money. Regardless of whether we need to cover the added costs associated with minimum wage increase; or wage hikes resulting from collective bargaining; or simply the payment of living wages in a brand’s supply chain, wage increases generally require additional funding.

In keeping with the UN Principles on Business and Human Rights and the OECD Guidelines, we believe that brands must ensure that the prices they pay can cover living wages. Consequently, much of our work focuses on calculating a brand’s share of production costs. This is also why we call for bottom-up pricing, which uses the total costs of living wages as the basis for price negotiations between committed brands and factories. 

Social dialogue (Collective bargaining)

It is not enough simply to add money to the system to raise wages. Workers need to be directly involved, because they have the best idea of their own needs and living costs. They are also best placed to ensure that wage levels keep pace with inflation or other changes in living costs over the years. This is why social dialogue, usually in the form of collective bargaining agreements (CBAs), is especially important.

Wages negotiated by trade unions and employers (and possibly other stakeholders) offer the most sustainable approach of setting living wage floors and keeping them up to date. Workers and their representatives are best placed to monitor and verify wage payments.

Fair Wear members shouldn’t interfere directly with worker organising, however. For example, it is a violation of workers’ rights for a brand to require workers to join a union.  

Nevertheless, brands can play an important role in ensuring workers who want to organise or join a union are not discriminated against or penalised. They can also support training for management and workers to communicate effectively together.

Accountability

If we want to make living wages a reality across the industry (affecting thousands of brands with production spread across the world), we need a strong system to hold brands accountable. Change will only happen if brands based in different countries, with different ways of doing business, are all paying their share, and if the money is actually reaching the workers.

Only when all three of these factors are in place, will sustainable living wages be possible. Together, they create a simple framework that can guide our work to raise workers’ wages.

The three key input areas for sustainable living wages