Let's Clean Up Fashion: the state of pay behind the UK high street
Wednesday, 13 September 2006 15:00
For over a decade, consumers, workers and campaigners have been calling on fashion brands to make sure the workers who produce the clothes they sell are paid a living wage. At the start of 2006, Labour Behind the Label decided it was time to check in with the fashion industry, to see what progress has been made. This report presents the results of our investigation, revealing who is - and isn’t - doing what.
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Background
Six years ago, Labour Behind the Label (LBL) published a report entitled 'Wearing Thin: the state of pay in the fashion industry.' The report demonstrated how workers the world over producing for UK high street companies were living off poverty wages, and that few companies were taking the issue seriously.
"The evidence that the legal minimum wage is insufficient, even to cover the needs of a single worker," it concluded, "is overwhelming...The majority of companies are not addressing the problem of low pay. They attempt to demonstrate that what workers are paid is adequate, or use the pretext that 'nobody knows what a living wage is' to do nothing, or simply ignore the concerns of workers and consumers."
At the start of 2006, we decided it was time to check in with the fashion industry, to see what progress had been made. At the same time as we compiled information on conditions on the ground, we wrote to the major high street names, giving them the opportunity to comment on profiles we had compiled from the information publicly available on their websites.
Poverty wages
"When told that it is checked that workers should get at least the minimum wage set by the government, which they all do, she said that if they think this wage is enough they should all try to live on this amount for a month and decide if it is OK." - woman working in a garment factory in Pakistan
LBL defines a living wage as one that enables workers and their dependants to meet their needs for nutritious food and clean water, shelter, clothes, education, health care and transport, as well as allowing for a discretionary income.
Most companies make an in-principle commitment to paying a living wage in their codes of conduct. Many use a formulation along the lines of that in the ETI base code: "national legal standards or industry benchmark standards, whichever is higher. In any event wages should always be enough to meet basic needs and to provide some discretionary income."
The difficulty with this statement is that, as evidence overwhelmingly demonstrates, neither national legal standards nor industry benchmark standards come close to meeting basic needs. Yet most companies seem to think that ensuring payment of a minimum wage is either sufficient to have discharged their responsibilities, or an adequate stop-gap measure. But a stop-gap for what?
Meanwhile, the global garment workforce in 2006 is even more tired, underpaid, and unable to reap the benefits of globalisation than it was six years ago. Earlier this year in Bangladesh, where garment sector wages have fallen in real terms by half in the past ten years, workers finally snapped, protesting, rioting, striking, and even setting light to factories to express their desperation at wages as low as £7 per month. They are far from alone in having wages way below what is decent.
There are a few glimmers of hope. Several companies have accepted their responsibility to work towards payment of a living wage, and have begun pilot projects to investigate how this can happen. As yet, no company has made a serious commitment to ensure that all workers in its supply chain receive a living wage.
Workers unable to negotiate
"Before there was a problem with our overtime pay - we weren't given enough. But now [we are unionised] it's what it should be. We can send money home to our parents now. This helps families." - workers in an Indonesian garment factory
Not only are trade union rights internationally-recognised fundamental human rights, they also offer the most effective and legitimate way to ensure that workers get a fair wage, by allowing them to stand together to negotiate it with their management. Most efforts by fashion companies to ensure that workers' rights are respected in their supply chains fail because workers themselves do not have a real voice in the process.
Any company that says it takes working conditions seriously should welcome the formation of a trade union in one of its suppliers, and indeed should set out to encourage it. A functioning, effective collective bargaining agreement is the most credible way that all concerned can have confidence that workers at a particular factory are not exploited.
This year LBL has been involved in two cases in factories supplying UK high street brands, one in Cambodia and another in Turkey, where workers have been persecuted and lost their jobs for trying to form a union to do something about their low wages. In both cases, pressure from these UK brands has helped bring management and workers to the table. They are just two examples of the countless requests for solidarity received from workers in garment factories. In 2005, nearly 10,000 workers were sacked for trade union involvement. Meanwhile more and more garments are sourced from countries, such as China, where workers have no freedom of association.
While almost every company was at pains to emphasise its 'zero-tolerance' approach to abuses of the right to freedom of association, only a few have recognised that freedom of association can actually help them to fulfil their commitments on workers' rights. Even fewer have actually set out to ensure workers have access to their trade union rights, through education and training by local trade unions and labour rights groups.
Brands turning a blind eye
"The retailers and their suppliers are playing an elaborate game. They only want to reassure consumers, not to improve conditions." - Dr Liu Kaiman, Institute of Contemporary Observation, Shenzen
In response to consumer pressure for living wages, companies have adopted codes of conduct, which they claim they enforce through social audits, inspections of working conditions in factories. Tens of thousands of these audits are performed every year, either as internal company monitoring, or by third party auditing firms.
But the evidence shows that audits are not the panacea that many companies believe them to be, frequently failing to pick up serious problems. Suppliers keep two sets of records - one which shows the real of wages and hours worked, and one to show the auditors. Factories are prepared to meet health and safety criteria. Workers who should not be there, for example because they are under age, are given the day off, while homeworkers and people working in subcontracted factories are often passed over in the process. Better audits may place a strong emphasis on worker interviews, but even then rarely get past the coaching and intimidation of workers.
Social audits can be valuable, if they are frequent and unannounced, include gender-sensitive, rigorous, off-site interviews, and involve local trade unions and NGOs. But they remain only one component in a toolbox of which freedom of association is the most powerful tool. Other useful tools include: long-term partnerships with local trade unions and NGOs; grievance and complaints mechanisms; education and training; addressing existing business or purchasing practices; effective remediation; increased transparency.
Many companies can offer no real guarantee that the good intentions in their code of conduct amount to anything on the ground. Those that do have a systematic auditing process in place lean too heavily on bulk auditing, even though some acknowledge its flaws. Aside from a few pilot projects, systematic involvement of local trade unions and NGOs in the process remains off the radar for almost every company.
How companies fared
We wrote to all the major high street retailers and all members of the Ethical Trading Initiative (ETI). On the basis of the information gathered for this report, we put the companies into five groups, based on how well they were able to respond to the questions we asked.
1.Non-responders
These companies make no information available to consumers on their websites, and did not respond to our enquiries in any meaningful way. We are concerned that this lack of transparency indicates a lack of engagement. Includes: Bhs*, Diesel, House of Fraser, Kookai, Mothercare, Marshalls, Monsoon Accessorize, Moss Bros, Peacocks/Bon Marche*, River Island, Ted Baker.
2.Dragging their feet
Responses from this group indicate scant effort to tackle workers' rights issues. They have not participated in collaborative efforts to develop best practice, in particular the Ethical Trading Initiative (ETI), and it shows from their responses. Includes: Arcadia (Topshop, Dorothy Perkins, Miss Selfridge, etc), French Connection, Jigsaw/Kew, Laura Ashley, Matalan, Mosaic Group (Oasis, Karen Millen, etc), Primark, Principles.
3.Resting on their laurels
While these companies have previously taken some steps to address working conditions, including joining the ETI, their responses and case histories suggest that they are more interested in ticking the right boxes to stave off criticism than they are in achieving actual results for their workers. By and large they don't seem to accept the seriousness of problems regarding wages and freedom of association. Includes: Asda, Debenhams, Sainsbury's, Madison Hosiery, Pentland.
4.Could do better
These companies gave us mixed responses, which indicated some consideration and decent steps in some areas, but didn't deal substantively with others or were too vague to be sure about. Includes: John Lewis, H&M, Levi Strauss & Co, M&S, New Look, Tesco, TK Maxx, Zara.
5.Pulling ahead
From their responses and case studies, these companies are further along than others. While they still have a long way to go, they seem to be engaging more seriously with the issues we raised. Includes: Gap, Next.
Recommendations
If its workers really are to earn a living wage, a fashion brand needs to make a serious commitment to tackling all three of the issues we raised here across its whole supplier base. None comes close, although some are doing more than others. They all need to:
Make sure a living wage is paid
- Develop strategies to improve wages, above and beyond the legal minimum, in their supplier base.
- Engage in good-faith negotiations with suppliers to ensure that a living wage can be paid out of prices the pay. Accept that this may increase the cost they pay to suppliers, and make it clear to suppliers that paying a living wage is a positive criterion.
- Work with other companies, trade unions and governments on a national and industry-wide level to develop strategies to raise wages, through active participation in frameworks like the Ethical Trading Initiative (ETI).
Give workers the space to negotiate wages and defend themselves collectively
- Make it clear to suppliers that they must not prevent workers from organising, and that a functioning collective bargaining agreement will count in their favour, not against it.
- Through local labour rights organisations and trade unions, ensure that workers and management are educated about freedom of association and workers' rights. Disclosing supplier lists will help these local stakeholders gain access to factories.
- Where applicable, lobby governments to permit and protect freedom of association by law, and in the meantime take steps to find alternative means by which workers can organise.
Stop with the smoke and mirrors
- Put in place a system of regular, unannounced audits, for all their suppliers. Audits need to involve comprehensive worker interviews, as well as local trade unions and NGOs, who are better placed to judge what conditions are like.
- Go beyond this by working collaboratively with supplier managements to ensure that they implement the necessary corrective measures when audits show up problems, and create incentives for improved working conditions.
- Put in place complaints mechanisms so workers can raise concerns at other times.
- Take a pro-active approach to freedom of association, including setting up worker training by local trade unions or labour rights groups.
*We wrote to Bhs and Peacocks later than the others, but followed both of them up with telephone calls, and were unable to find anyone who could deal with our request.
