Living wage

The case studies are based on publications and research from the Clean
Clothes Campaigns (Netherlands and Germany); the Interfaith Centre on
Corporate Responsibility; CAFOD; IIED; the National Labor Committee; Global
Exchange; KFAT and National Group on Homeworking. Additional research was
commissioned by Labour Behind the Label from Rohini Hensman and Bettina
Musiolek.

Executive Summary

The garment industry is renowned for low wages and poor working conditions.
In spite of the fact that consumers are spending more and more on clothes,
there are few signs of improvement for workers. In fact, the opposite is
the case: downward pressure on wages means that many garment workers find
their weekly wage packet is not enough to live on, in spite of the fact
that they often work extremely long hours.

Industrial restructuring and more open markets mean that the garment
industry is largely controlled by major retailers and brand-based companies,
who manage a global network of suppliers. Choice of location is largely
determined by relative costs. In several Asian countries, labour costs were
found to be as low as 0.5% of the retail price.

Labour costs are reduced not only by relocation but also subcontracting to
smaller production units and homeworkers who are paid considerably less
than factory workers. In the UK, some homeworkers are still being paid well
below the legal minimum wage they are entitled to: a machinist with 20
years' experience was found in July 1999 to be sewing in pockets for 72p an
hour. She had not had a pay increase for 5 years.

Many clothing retailers, faced with increasing public pressure, are
beginning to recognise that relocating and subcontracting do not free them
from their responsibilities with regard to working conditions. Step number
one has been for companies to formulate codes of conduct. With very few
exceptions, however, company codes of conduct state that a company's
suppliers should pay their workers the national minimum wage or the local
prevailing wage. These have been proved to be inadequate in most cases.
Evidence from trade unions and human rights organisations tell us of:

• workers having to work 5 and a half hours for a pound of pork in Bulgaria;
• a legal minimum wage of between 6 and 17p per hour in China;
• a 15% increase in the minimum wage in Indonesia to cope with an annual inflation rate of 70%;
• workers in the UK, particularly from ethnic minorities, who are earning less than the minimum wage.

It is clear from the testimonies received by Labour Behind the Label that many workers are not earning enough even for their basic needs. The problems of defining exactly what is meant by a living wage can be partly overcome by listening to workers themselves.

Labour Behind the Label is asking that companies:

• commit themselves to a living wage being paid to all workers involved in the chain of production;
• pay suppliers a price which enables them to pay their workers a living wage;
• ensure that workers have the opportunity to play their part in determining what is acceptable as a living wage.