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May 31, 2019

Garment brands still failing to meet living wage promises

By Leonie Barrie

While many global garment companies have made ambitious commitments to pay living wages to workers in their supply chains they are falling short when it comes to implementing these commitments, according to new research.

Academics at the University of Sheffield in the UK are now calling for large-scale reforms to eradicate what they describe as poverty pay in the garment industry.

And they say it will take a “step-change in approach” for major corporations to pay wages that “meet the basic needs” of workers and their families.

In the wake of Rana Plaza factory building collapse in Bangladesh in 2013, the industry has faced growing pressure from consumers, civil society, unions and governments to increase wages and improve working conditions. And a number of leading global corporations have responded with commitments to deliver living wages to the workers who make their clothes.

But an investigation by researchers at the Sheffield Political Economy Research Institute (SPERI) at the University of Sheffield has found that many companies do not have concrete, measurable action plans for achieving a living wage in their global supply chains, or benchmarks for calculating living wage rates.

The researchers looked into the commitments and actions of 20 of the world’s leading garment companies – including Adidas, C&A, Decathlon, Fruit of the Loom, Gap, G-Star Raw, H&M, Inditex, Levi Strauss, Nike and Primark. Of these, 17 are members of initiatives that profess a commitment to living wages.

Just three companies – H&M, C&A and G-Star Raw – were found to have a supplier code of conduct that requires workers to be paid wages that meet the Clean Clothes Campaign’s definition of a living wage. There companies promise to cover the basic needs of workers and their families, provide some discretionary income and specify that this wage should be earned within a normal working week.

The study on ‘Corporate Commitments to Living Wages in the Garment Industry’ found that a lack of transparency around the wages workers receive makes it extremely difficult to evaluate companies’ progress towards meeting their own living wage promises.

It also says that instead of altering their purchasing practices to make it possible for suppliers to pay living wages, most garment corporations are outsourcing their living wage commitments to external initiatives.

Some are part of multiple external initiatives, each with different definitions and approaches to living wages, which mean corporate commitments lack clarity. SPERI’s analysis shows that corporate supplier codes of conduct are often out of step with the requirements of the external initiatives they are involved with.

“There is little evidence that corporate commitments to living wages are translating into meaningful change on the ground,” explains project leader Professor Genevieve LeBaron, Professor of Politics at the University of Sheffield and director of SPERI.

“As such, consumers are purchasing products they may believe are made by workers earning a living wage, when in reality, low wages continue to be the status quo across the global garment industry.

“A step-change in approach will be necessary for garment companies to achieve living wages in their supply chains. Corporations need to evaluate their sourcing practices and ensure they are paying enough to allow suppliers to pay out living wages. They need to adopt existing benchmarks and living wage calculation methodologies and clearly map out how they will achieve living wages for different tiers of suppliers and by when.

“Until companies can take such steps, living wage commitments are likely to remain in the realm of rhetoric rather than leading to substantial changes that address low wages for workers in the global garment supply chain.”

Tom Hunt, deputy director of SPERI, adds: “The global garment industry is extremely profitable but the workers in the supply chains that produce our clothes are not benefiting from the value they are creating.

“Without significant change from industry and governments, workers will continue to receive low wages that do not meet the basic needs of food, housing, medical care, clothing and transportation for themselves and their families.”

The researchers identified significant obstacles to the payment of living wages to workers in the global garment industry:

• Corporations have outsourced their living wage commitments to multiple external initiatives, which have enforceable standards.

• Company policies are often out of step with these initiatives.

• There is widespread inconsistency and confusion among corporations over the definition of a living wage.

• Corporations lack living wage benchmarks and most lack a ‘roadmap’ for achieving their living wage commitments.

• Corporations are reliant on ‘social auditing’ for compliance and enforcement of living wage commitments, a tool known to be flawed and to produce misleading depictions of labour standards in supply chains.

• There is a lack of transparency among corporations about the wages that are actually paid to workers throughout their supplier networks.

• There is weak enforcement of freedom of association rights, which may disempower workers from raising concerns about unmet wage commitments and engaging in collective bargaining.

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