The Issues: Living Wages

Key Takeaways
  • A living wage is defined as a human right but millions working in the textile sector are paid at poverty-level rates. 
  • Legal minimum wages in several top garment-producing countries are too low to ensure workers have a basic standard of living.
  • Labour costs are only a fraction of the final retail price, so wage raises could be absorbed into costings without hitting the consumer too hard. 

From cotton fields to factory floors, the fashion and textile industry has been in the spotlight in recent years for unacceptable working conditions, including paying very low, poverty-level wages. 

A living wage ought to be sufficient to meet basic needs and afford a decent standard of living, for the worker and her or his family, for a standard working week (typically 48 hours). This includes enough for food, water, housing, sanitation, transport, clothing and other essential needs, including some discretionary income or provision for unexpected events.  

Although a living wage is defined by the International Labour Organization as a human right, the reality is that even where government minimum wage legislation exists, many workers are still not being paid these minimums. In the top 14 garment-producing countries, the reality is that government minimum wage levels are far below what is required to deliver a basic standard of living. 

For example:

  • in Bangladesh, garment workers earn on average just 18 per cent of the Asia Floor Wage;
  • in Cambodia, the 2017 minimum wage represents just 34 per cent of the level of pay needed to cover the basic needs for a family of four.

Achieving a living wage for all

Clearly, governments need to take responsibility to improve legislation around setting, reviewing and enforcing wages. Companies can play an important role in supporting advocacy on living wages in the countries where they operate. Companies can also show leadership in their own production sites or supply chains, and work with partners, worker organisations and labour experts to close the gap. While labour costs vary, they typically represent only a small percentage of the final retail price, so increases towards living wages could be incorporated into cost models with relatively small impact on the final price to the shopper. 

Groups such as the Asia Floor Wage Alliance, the Fair Wear Foundation or the Living Wage Coalition established by ISEAL (International Social and Environmental Standards and Label network) have established tried-and-tested methodologies and benchmarks for a growing number of countries. 

Take Action

Fashion brands and retailers can support progress by:

  • working with suppliers to ensure wages paid meet both legal national wage levels, or industry benchmarks, whichever are higher – as a minimum;
  • understanding, and then addressing, the gap between current wage levels and benchmarks for living wages in the countries where they operate;
  • ensuring workers are provided with understandable, written information about their wages and pay policies; 
  • ensuring their purchasing practices and costing models reflect the need to improve wages, and pay workers a living wage. 

Suppliers, factories and mills can support progress by:

  • building awareness of living wage and relevant benchmarking research available;
  • collaborating with workers’ organisations and trade unions to agree steps towards living wages;
  • working in partnership with customers and supply chain partners to identify shared approaches and cost models to achieve living wages.

For more information:

Asia Floor Wage 

Ethical Trading Initiative base code on Living Wage

Fair Wear Foundation Living Wages Portal 

Clean Clothes Campaign – What is a Living Wage? 

Labour Behind the Label – What is a Living Wage? 

ISEAL Living Wage Coalition

Living Wages Around the World, A Manual for Measurement

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