The wage gap to subsistence is 45 percent in the most important garment producing countries

The ‘WageIndicator Foundation’ and ‘The Industry We Want’ (TIWW) have introduced an ‘Industry Wage Gap Metric’. The metric shows the average percentage gap between minimum wages and living wages. In the major garment manufacturing countries, this gap is 45 percent.

The wage gap means that garment and footwear workers in the selected countries earn far less than they need to make a decent living. WageIndicator and TIWW apply their metric to the garment and footwear industries in Honduras, Turkey, Bangladesh, Romania, Morocco, Pakistan, India, Cambodia, Vietnam, Mexico, Tunisia, China and Indonesia. These countries were selected, among other things, because of their trade volume and their market relevance.

What is a living wage?

TIWW defines a living wage as the minimum income required by a working person and their family to meet basic needs, including some discretionary income. This should be earned within the statutory working time limits. There is a broad consensus that wages in most countries producing apparel are well below the definition of a living wage. TIWW accepts any interpretation of a living wage that has been endorsed by local unions and has a transparent methodology.

Finding the difference between the minimum wage a worker earns and what they should earn to support themselves and their families is just the first step in this project. According to TIWW, the second phase will focus on collecting real wage data. We will work to establish minimum standards for collecting real wage data and possible methods to harmonize such efforts.

The wages collected by WageIndicator, TIWW and others will then be used to enable change: “In phase three, we will set positive wage growth targets for each of the 13 countries over the next four years and develop a methodology for data collection and tracking,” says the Organization.

The 13 countries included in the data are the hub of production and the global supply chain of the fast fashion industry. Therefore, despite the many calls to action for sustainability, occupational safety and fair wages, the problem remains unresolved and ongoing.

Brands do not pay wages to garment workers

The brands do not pay the workers in the garment industry directly, but they negotiate the prices paid per item and thus have considerable influence on the manufacturing conditions so that the workers can be paid a fair wage. No factory wants to lose business, and brands typically prioritize the cheapest sewing price and best possible margin per garment over ensuring decent wages for workers.

Actions, goals and reality do not match

As one of the biggest companies in the fast fashion industry with very vocal sustainability goals, H&M is a good indicator of a company where actions, goals and reality don’t always align. In its current e-commerce offering, H&M sells a £2.99 cropped T-shirt, £9.99 halterneck dress and £12 cargo jeans .99 British pounds (about 15.50 euros) with all these prices including fabric, sewing, packaging, postage and a profit margin. H&M has an almost inevitable need to pressure its suppliers to find ways to produce garments at these rock-bottom prices.

Almost a decade ago, in 2013, H&M said it would pay a “fair living wage” to more than 850,000 workers in 750 factories by the end of 2018. It is not known how this will be guaranteed in 2022. What is known, however, is that H&M offers extremely cheap garments on its website, which the factories where the seamstresses work would have to produce at less than half the sales costs in order to make a profit from the sales volumes.

Research by Deloitte Access Economics for Oxfam Australia found that, on average, only between two and four percent of the price of a garment sold in Australia goes towards wages for factory workers. The Clean Clothes Campaign reported similar numbers, according to Good on You, explaining that “production wages are little more than 3 percent of the price you pay in the store.”

Good on You, a platform for evaluating ethical and sustainable brands, says many of the people employed in the cutting part of the fashion supply chain still work in unsafe factories and live in the worst conditions. Wages in Bangladesh’s garment factories are the lowest in the world, and while the big international corporations that own the big brands are not directly legally responsible for workers’ living conditions, their profits stem from the fact that people spend their time sewing receive low wages for their clothing.

“No one who has a full-time job should live in poverty,” John Gerner wrote in a 2003 op-ed piece in The New York Times, questioning what a living wage is. Two decades later, the notion of economic fairness in the fashion industry is still as patchy as it was then.

Article source: WageIndicator Foundation and The Industry We Want

This article was previously published on FashionUnited.uk. Translation and editing: Barbara Russ.

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