Low wages still plague fashion supply chain

From Logistics Manager Magazine,
Published Tuesday 4 June 2019 10:41 am

Shoppers are buying clothes believing that they are made by workers earning a living wage, when in reality, low wages continue to be the status quo across the global industry, a new survey into garment supply chains says.

The research, by the Sheffield Political Economy Research Institute, includes responses from fashion companies such as Adidas, Inditex, Nike, Gucci and H&M. Amazon, Hugo Boss and Levi Strauss were among the companies that did not respond.

It says: “While some garment companies are making ambitious commitments to pay living wages in their global supply chains – indeed, far more ambitious commitments than are apparent in other sectors—they are currently falling short when it comes to meaningful action to implement these commitments.”

There are some 60 million garment workers globally – about 60 per cent of them are in Asia. Part of the problem, it says is that most major corporations in the industry lack a robust definition of a “living wage”, and also lack a clear living wage roadmap and timelines for reaching the benchmarks.

The report is critical of the fact that companies often hire independent auditors to monitor factories saying that there is now a “CSR marketplace” that enables companies to switch auditors if one seems too rigorous.

It is also critical of multi-stakeholder initiatives (MSIs), saying “most of these do little to tackle the irresponsible purchasing practices that have been documented within the scholarly literature to create pressure towards low wages, such as buying at prices that are not high enough to cover the cost of living wages or the imposition of harsh penalties and tight production windows onto suppliers.”

Not surprisingly, the report comes up with a series of recommendations including, for companies, greater transparency about the payment of living wages in their supply chains, and better enforcement strategies. It also argues that governments should make companies legally responsible for the conditions of people employed by sub-contractors.

Ultimately of course, fashion companies are successful because they are producing clothing that consumers want at a price they are willing to pay. Perhaps the biggest task of all is educating shoppers about the financial condition of the people who make their clothes.

The report is available here.