Following the launch of the Fashion CEO Agenda 20211 on 12 May, Global Fashion Agenda took a closer look at each of the five priorities set forth to discuss how policy potentially can support the further activation of each priority.
An overarching challenge around the wage discussion is the current lack of a commonly agreed definition of a living wage, which is confounded further by the gap between legal minimum wages and varying conceptions of living wages in most garment-producing regions. For the broader fashion industry, research suggests that many factories fail to comply with applicable minimum wage laws and that, even when in compliance with minimum wages, the wages paid in some garment-producing countries remain too low to meet the basic needs of workers. Inadequate wages are often linked to broader issues, such as a lack of governance and institutional support mechanisms.
Policy Gaps & Opportunities
A significant proportion of garment workers operate in the informal economy and face increased vulnerability, often due to the lack of labour protection and health support for factory workers. COVID-19 affected these workers in particular, as there were no forms of protection available to them. This calls for strong governance structures, compliance and social protection schemes as part of compensation packages.
The conversation about wages in the fashion industry has to overcome its sensitivity for wages to move away from a race to the bottom and to include additional benefits for workers such as support systems and
healthcare. This emphasises the importance of equally fair wages supported by purchasing practices, ringfencing labour costs and excluding them from price negotiations.
Policy makers can encourage brands to explore how improvements in areas such as purchasing, productivity, training, data implementation, freedom of association, collective bargaining and social
dialogue can contribute to the establishment of improved wage systems and to investigate systems of wage setting, such as collective bargaining agreements. In response to the pandemic, industry players and governments can support and extend wage and social protection schemes through the period of lockdown, carefully consult plans to reopen factories to prioritise the safety of workers and ensure that garment workers are paid wages that meet their needs post-crisis. Governments can also play a vital role in developing policy frameworks, facilitating multi-stakeholder dialogue and leading by example in public procurement practices.
Focus of the discussion
At the European level, the forthcoming due diligence legislation is expected to have positive impacts namely on wages, work conditions and ending child labour in the supply chain. Yet, will it include an understanding of how wages should be measured and how systemic change towards better wage systems can be brought about? Policy action is most needed in this area in the development of clear roadmaps and benchmarks alongside increased transparency on wage data. This should be done through a collaborative approach taking into account the ongoing work of other organisations and existing initiatives such as OECD, ILO, Fair Wear Foundation, ACT and IndustryALL Global Union.
– Christina Hajagos Clausen, Director, Textile and Garment Industry, IndustriALL Global Union
– Rick Lambell, member council, ACT and Head of Sustainable Development, KMart Australia
– Dorothy Lovell, Policy Advisor Textile & Garment, OECD Centre for Responsible Business Conduct, Directorate for Financial and Enterprise Affairs
– Christian Smith, ESG Due Diligence and Stakeholder Engagement, Fair Wear Foundation
– Miran Ali, Vice President Bangladesh Garment Manufacturers and Exporters Association (BGMEA)
– Moderator: Morten Lehmann, CSO, Global Fashion Agenda