In Bangladesh, the local minimum wage equates to AUD0.39 per hour

In Bangladesh, the local minimum wage equates to AUD0.39 per hour

Just 4% of the price of a piece of clothing sold in Australia is estimated to make it back to the pockets of factory workers, according to new research, which calls for big brands to "step up to their responsibilities" on worker wages.

The research conducted by business consultancy Deloitte Access Economics for Oxfam Australia has found that on average only AUD0.40 (US$0.31) from an AUD10 T-shirt makes it back to workers.

In countries like Bangladesh, the study found an average of 2% of the price consumers pay in Australia goes towards factory wages – representing AUD0.20 out of the price of a AUD10 T-shirt.

Oxfam argues that paying living wages – wages that allow the workers who make the clothes to live a decent life – is possible. Even if big companies passed on to consumers the entire cost of paying living wages to all workers, Deloitte estimates this would increase the price of a piece of clothing sold in Australia by just 1% – representing AUD0.10 extra for a AUD10 T-shirt.

With profits being made at the factory, wholesale and retail levels in garment supply chains, the charity says there is room for big brands to absorb these costs without passing them on to the people who buy their clothes.

Figures from Deloitte show women aged 18-25 make up 80% of the factory workers in the global garment industry. In Bangladesh, the local minimum wage equates to AUD0.39 per hour, in Vietnam AUD0.64, and in China AUD0.93.

"Their long hours of hard work have helped to create booming economies and large export industries for countries like Bangladesh, Indonesia, Vietnam and China," the report states. "But this booming economic growth has not benefited everyone. While revenues continue to grow for many big Australian companies like Cotton On and Kmart, and while factory owners and suppliers to the garment industry across Asia continue to collect profits, the same cannot be said for garment workers."

The report calls on leading Australian fashion retailers such as Kmart, Big W, Bonds, Cotton On and Just Jeans to "step up to their responsibilities to the women making their clothes."

"After the tragic Rana Plaza factory building in Bangladesh collapsed in 2013, killing more than 1,100 workers, Australian consumers demanded that companies act," Oxfam says. "In response, many of the largest garment retailers in Australia joined the ground-breaking Bangladesh Fire and Building Safety Accord.

"Similarly, Australians have demanded better transparency from big brands and joined Oxfam's call for factory lists to be brought out of hiding. Over the past two-and-a-half years, 12 of the biggest brands operating in Australia have published the majority of their factory locations online – keeping them accountable for the conditions where clothes are made."

Despite the positive changes, however, Oxfam says poverty wages are still holding back the women who make clothes.

"The time has come for this rigged system's gross exploitation of workers to stop. Big brands must publicly commit to paying a living wage to their factory workers – and publish a strategy outlining how this will be achieved and by when."

Average cost structure of Australian clothing prices

Note: *GST is 9% because the 10% GST is added to the pre-GST cost of an item. This means, as part of the total retail price of an item, GST usually makes up 9%.
Source: Deloitte Access Economics for Oxfam Australia, "A Living Wage in Australia's Clothing Supply Chain"