April 8, 2014

MADE-BY’s Labour Standards expert, Martin Buttle shares his views on the recently released Tailored Wages report.

Martin ButtleLabour rights group,Clean Clothes Campaign have published a new report on the status of brand and retailers’ engagement with supply chain labour standards in a report entitled ‘Tailored Wages’. In the past Labour Behind the Label (LBtL) the UK wing of Clean Clothes Campaign (CCC) have published a report Let’s Clean-up Fashion. This has always proved to be an interesting report as it shows the evolving expectations of campaign groups and NGOs on labour standards in the fashion industry. Since, LBtL published the last Lets Clean up Fashion report, the Rana Plaza disaster collapse and the death of over 1,100 workers in the in Bangladesh has increased international focus on the clothing industry.

Tailored Wages has shifted the emphasis from a broad range of labour standards issues including working hours to a sole focus on ‘Living Wages’. Clean Clothes Campaign point out that the right to a living wage is a Human Right. Drawing on the 2011 UN Guiding Principles on Business and Human Rights Clean Clothes Campaign argue that businesses have a duty to respect human rights that “exists independently of States’ abilities and/or willingness to fulfil their own human rights obligations, and does not diminish those obligations. And it exists over and above compliance with national laws and regulations protecting human rights”. In other words the weight of international law states that businesses have a duty to ensure that living wages are paid down the supply chain.

Taking this as a starting point, CCC ranked 40 European brands on their efforts to engage on the topic of Living Wages. Overall the report found that although many brands were engaging their supply chain on a range of innovative projects to improve wages above the minimum level, few were willing to publish a figure they deem to be a Living Wage. A key point according the LBtL who believe such a statement is a “vitally important step if companies are to be transparent about their aims”. Out of the 40 brands profiled, only four, Inditex, Marks & Spencer, Switcher and Tchibo were able to show clear progress towards increasing wages. Mid ranking brands included, Primark, New Look, Arcadia and Monsoon received their score for showing some efforts on Living Wages but according to LBtL these brands efforts are “unconvincing so far”.  Esprit, Matalan and Mango, received the lowest scores for “dragging their feet” and doing “next to nothing to ensure workers are paid enough to live on”.

Interestingly, CCC pass comment on the different initiatives brands are taking to improve ages being paid in supply chain partner factories. But arguably CCC are a little too dismissive of interesting initiatives that have been rolled out over the past few years to engage on the topic of Living Wages. For example the Fair Wage Network (FWN) system of tools developed by Daniel Vaughan Whitehead and Auret Van Heerden, is dismissed because ‘Living Wages’ is only one of 12 dimensions of a Fair wage. However one could argue that non-payment of overtime premiums is an equally endemic issue and may be more prevalent in China than payment of wages below Living Wage standards. Productivity improvement projects and ‘lean’ manufacturing is argued to “sometimes produce limited improvements and boost wages in a small way”. Whilst it is true there are a wide range of different productivity improvement projects being rolled out in garment factories they do not always aspire to correct wages sometimes they are used to reduce endemic working hours. It could be considered a shame that these initiatives are so readily dismissed when they are promising tools in the improvement of factory labour standards.

CCC state that in assessing brands performance they were looking for practical steps “adoption of figures for living-wage benchmarks in main production countries and evidence of their use; buying systems that break down the free-on-board (FOB) price to include specified labour costs; open costing with suppliers; buying practices that show a preference for factories with high wage standards or factories that support the establishment and functioning of independent trade unions; and work to consolidate supply chains” (p.15). These all seem like activities that brands could and should engage in.

Tailored Wages is an important intervention in tackling a vitally important labour standards issues, I hope that the next time CCC publish a report there will be more progress and more initiatives working towards this goal.

Martin Buttle, Senior Supply Chain Consultant at MADE-BY.

Tags: ccc, lbtl, tailored wages.