Wages in the garment industry are notoriously low. Most workers are not able to meet their basic needs and live in dignity. A lack of publicly available information on the supply chains allows brands to profit, whilst workers who make their clothes are kept living in poverty. In factories in Bangladesh, India, Cambodia, Romania, Croatia and more, the people who make our clothes usually earn less than third of what they need to meet their basic needs and care for their families.
What is a living wage?
A living wage, recognized by the UN as a human right, is a wage that is sufficient to afford a decent standard of living for a worker and their family. It should be earned in a standard work-week of no more than 48 hours, and must include enough to pay for food, water, housing, education, health care, transportation, clothing and some discretionary earnings, including savings for unexpected events.
Calculating a living wage is not easy, although certainly not impossible. Scholars, unions and labour rights groups have developed credible benchmarks for countries or regions. Asia Floor Wage Alliance, Global Living Wage Coalition and Wage Indicator Foundation are examples of robust and transparent living wage benchmarks.
Living wages, not Minimum wages
When governments set minimum wages, they balance the interests of workers with what they see as the need to remain competitive in the global market and pressure from companies to keep wages low. As a result, minimum wage rates often bear no relation to the cost of living and fall far short of what we would consider a living wage. In many garment-producing countries, the minimum wage actually leaves a family below the national poverty line, even though this is also set by the government.
The gap between the legal minimum wage and a living wage is increasing. Research from 2019 shows that in Asian countries the minimum wage ranges from 13% in Sri Lanka to about 42% of a living wage in India. In European production countries, the gap can be even larger, with just 10% of a living wage paid in Georgia. Minimum wages often remain unchanged for years while the cost of living rises, which means that the real value of the workers’ pay falls.
Living wage vs Minimum wage
Living wage benchmark (AFW2020 and CCC estimates) vs average minimum wage
min wage: 192 USD
min wage: 12,250 Rps
min wage: 10,000 Rps
min wage: 249 Euros
min wage: 243 Euros
I just want to earn enough to feed my family, have a roof over us and live in dignity.
Women, migrant workers and home-based workers get paid less
Women are often in lower paid jobs than men and may be expected to share a higher proportion of their wages than men in their family, including paying for childcare. Migrant workers are more vulnerable to exploitation and are more likely to be paid lower rates for their labour. Some workers, such as migrant women, face compounding discrimination which means they are paid less due to both their gender and their migration status.
Outside of the factories, millions of piece-rate workers and home-based workers in the global garment industry are paid by the number of garments they produce, not the number of hours they work. The rate per piece often makes it even less likely that home-based workers earn a living wage and many fail to earn even a minimum wage under this system. When the issue is raised, managers simply argue that they should work faster.
Brands must step up and pay a living wage
The UN Guiding Principles on Business and Human Rights establishes a shared responsibility between governments and businesses to respect human rights, including paying a living wage, to workers in supply chains.
The principles specify that in cases where governments fail to protect human rights – such as when the legal minimum wage fails to meet the minimum subsistence level (a living wage) – businesses still have an obligation to respect the human right to a living wage by remedying this state failure.
Brands may be able to outsource their production, but they cannot outsource or delegate their responsibility to uphold human rights in their supply chains.
We are calling on brands to:
- Commit to paying a living wage contribution on every order they place.
- Commit to using transparent and robust living wage benchmarks.
- Commit to reducing the gender pay gap in their supply chain.