Blog: Leonie BarrieLiving wage refuses to go away

Leonie Barrie | 25 June 2012

Around 300 garment factories in the troubled Ashulia industrial zone in Bangladesh have seen production disrupted after almost a week of protests by workers demanding higher wages. While the strikes ended following talks between unions, companies and the government, the situation seems fragile. Factory owners are insisting the government tackles the vandalism to their property before anything else can be formally discussed by the industry, including pay.

Workers last received a pay rise two years ago, when the minimum wage was doubled to BDT3,000 a month (US$36.50) - but they now say their pay has not kept pace with rises in the cost of living.

The issue of a living wage was among topics discussed by Marks & Spencer at a meeting of stakeholders in its Plan A sustainability strategy. The retailer has been collaborating with competitors as part of efforts to implement a living wage in supplier factories - and also factors labour costs into its buying model.

The company also unveiled what it is calling the "world's most sustainable suit" in which everything from the buttons to the lining have been sourced from the most sustainable materials available. And it expects radio frequency identification (RFID) technology to play an increasingly important role in the clothing recycling process as it moves towards a closed-loop garment supply chain.

While China's position as the world's leading clothing manufacturing country remains unassailable, the increasing cost of doing business there means the rapid growth of its apparel industry may be on the wane. New research highlights Belarus, Ukraine, Moldova, Romania, Madagascar, Tunisia and Morocco as attractive sourcing alternatives.

But there is also a "growing confidence" in the future among the 27 member states of the European Union (EU), after figures showed turnover in its textile and clothing industry rose 4.1% in 2011. Growth has also continued during the first quarter of the current year, with extra-EU exports up 8.1% in value and 6.8% in volume.

Luxury goods positioned at accessible price points are a key industry battleground, and increasingly the core revenue drivers of some of the fastest growing luxury goods players, including Mulberry, Jimmy Choo, Burberry, Coach and Michael Kors. But is this democratisation of luxury a good thing for the industry, or is there a risk of diluting status consumption culture?


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