What is the Issue with Wages in Fashion?Written by Adela Cardona
The phrase “business as usual” is loaded with the inevitability of how things have worked, up until now, and with the fact that they should not be disturbed. Because why fix something that’s not broken, right? Except it is deeply broken, the fashion system, that is.
Why? Because the traditional retail model is built upon the notion of exponential growth as the ultimate goal. And such massive expansion and profit have usually meant cutting down costs of human labor in the supply chain, especially in the production of raw materials and manufacturing of goods.
The usage of cheap labor has been going on for centuries. It can even be traced back to the history of slavery or poor working conditions for sharecroppers and indentured servants. And it was exacerbated in the 20th century when, according to Teju Adisa-Farrar for Slow Factory, the fashion industry started to grow and create profit for its owners.
Something that has trickled down to our current times where what we have is “an industry that has been founded on low wages, a race to the bottom and the search for the cheapest price,” according to Jenny Holdcroft, from the IndustriALL Global Union.
This issue with garment workers’ low wages is only a symptom of a systemic problem where the people that make our clothes pay the cost, to create wealth for the shareholders that invest in the brands, amongst other reasons.
How? By receiving only about 0.6% to 4% or the garment’s price, according to the Clean Clothes Campaign and Deloitte’s report for Oxfam Australia. This means that if you buy a t-shirt for $20.00 USD, a garment worker would receive anywhere from 0.12 USD to 0.8 USD per t-shirt they make. This is how a mother might end up having to decide between feeding her family or going to a doctor, despite working way over time under terrible conditions, for example.
So who should be held accountable for this? How can we as consumers and brands be a part of the solution? There is no one size fits all solution. It is a systemic issue that involves all actors of the supply chain. From the government, to companies to factories.
And even though an issue like low wages cannot be fixed with one solution, aiming to pay a fair living wage is a good place to start.
The Difference Between Minimum Wage and Living Wage
A minimum wage is the lowest wage companies can pay, by law. It is determined by the government of any country and it exists to stimulate employment and economic growth. The issue is that a lot of governments allow these wages to be exponentially low, in order to avoid companies taking their business elsewhere. This is why paying a minimum wage is not enough. One solution to this problem is to establish a living wage.
A living wage is what an individual should earn in a work week of no more than 48 hours, in order to live a decent life. This means a person should be able to at least afford:
- Nutritious food (minimum three meals a day)
- Housing in a safe and secure environment
- Basic healthcare (including menstruation products)
- Emergency fund
This living wage is a voluntary measure, unless adopted and implemented by governments themselves.
And it has to be calculated by city and region. Because a living wage in one place might not be enough in another city where the cost of living is higher. It is also adjusted annually, as the cost of living keeps rising.
It is a measure that was born out of the belief that if you work full time, there is no reason for you to end up in a situation of poverty. Which is one of the solutions they arrived at in Baltimore in 1994, after people realized that a lot of the homeless were actually employed, albeit poorly paid.
In a country or a state where the government has not enforced the payment of a living wage though, like Colombia –where our team and artisans are located– it is up to brands, citizens and government to work towards that goal.
What is the Way Forward?
As citizens we can start by searching whether we live in a place where governments have enforced living wages or not. And if we do not, we can research organizations that are working towards achieving it and passing laws that ensure fair wages and protect workers from wage theft. The latter is what happened during the start of the pandemic, when major retailers across the globe refused to pay around $40 billion worth for orders that were already delivered. They also denied workers wages and benefits that were rightfully owed.
Also, we can support laws that hold all actors accountable for abuses in the supply chain, like S.B. 62, that passed in California at the end of September 2021. This bill ensures that retailers can be held accountable for abuses in factories. Because, after all, their purchasing practices are the ones that determine how much money factories get and how many corners they have to cut in order to reach the price point that retailers demand.
Another thing we can do is support brands that are working towards paying living wages or already do.
We can all engage with and support nonprofit organizations that focus on this issue, such as: The Clean Clothes Campaign. Global Living Wage, the Asian Floor Wage Alliance or Pay Up.
What Can Brands Do?
Ensuring living wages is not without its challenges. It requires a systemic change that means working with suppliers, other brands that work with them, governmental institutions and nonprofits, as mentioned above.
The first step is calculating what the living wage should be for the region or city where the garment workers live. This is hard but not impossible. At Beckett Simonon, for example, we realized that we had to partner with a nonprofit organization if we wanted to be able to estimate the living wage for Bogotá, Colombia, where we are located.
We reached out and donated to Global Living Wage, which has already calculated the living wage for the Caribbean Coast. According to their team, they will be able to have one for Bogotá by 2023.
Another step is to monitor wages. See where they are at by understanding how garment workers wages compare to the national minimum wage or, if paid by piece, what percentage they are earning of the final product price. According to Deloitteand Oxfam Australia, in order to pay living wages, garment workers should earn at least 5% of the product price.
In Bogotá, according to a 2018 report from the Bogotá Chamber of Commerce, a shoemaker usually earns between the monthly minimum wage and 20% more. Which means that as of 2021, a shoemaker can make an average of $242 to $290 USD a month.
An assembler in our sneaker workshop in the same city however, earns on average $903 USD a month plus overtime, depending on the size of our orders. This is way above minimum wage and around 50% over the living wage for the Caribbean Coast of Colombia which was set at $455.71 USD. It is a good starting point, while we wait for Global Living Wage to calculate what that would be for Bogotá.
When the living wage is determined, suppliers and brands like us can make a long term road map to remedy wages where they need raising. It is important that said road map takes into account that raising wages does not compromise a supplier’s ability to get clients in the market. This is why brand collaboration is key, where a supplier answers to multiple retailers.
Systemic Issues Need Systemic Solutions
This is only one node in the web of systemic actions that need to be taken in order to have a fair fashion industry. And as such it is not a one size fits all solution. Only a measure that, if applied correctly, could be a way of avoiding wage abuse and poverty but by no means the only one.
What other solutions are you excited about when it comes to creating a just fashion system? Leave it in the comments below. We are always looking for ways to improve.