State of The Industry: Lowest Wages to Living Wages

While we are thankfully starting to see a lot of talk about the serious ways that the fashion industry is failing our planet, the impact the industry is having on people has taken a dangerous back seat. We don’t believe these have to be mutually exclusive, and the time is now to shed further light on the serious social injustices going on within the industry.

The massive problem with wages today.

It is estimated that less than 2% of the people who make the clothes on our bodies earn a living wage (Source: The True Cost). This means an estimated 98% of workers in the fashion industry are likely being held in systemic poverty and cannot meet their most basic needs. And, 75% of these workers are women between the ages of 18 and 24 (Source: Fashion Revolution, 2017).

This is not a small problem. In fact, the fashion industry employs 75 Million factory workers around the world (Source: Fashion United, 2017). That’s a higher number than the population of over 220 different countries. Factoring in that many workers have children, the number of people this problem is affecting quickly becomes as large as the population of the United States, the 3rd largest country in the world. 

This means that the products we enjoy most–your favorite pair of jeans, your go-to pair of shoes, your first outfit worn when the laundry is done–may have been made by people who are unable to meet the basic needs of themselves and their children. 

Our industry’s negligence to provide a living wage is especially concerning when considering that the United Nations has declared it a basic human right.

“Everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity...”
(Source: Universal Declaration of Human Rights. Article 23.)

Unfortunately, all of this means that the products we enjoy most–your favorite pair of jeans, your go-to pair of shoes, that first outfit worn when the laundry is done–were likely made by people who are unable to meet the basic needs of themselves and their children. 

5 ways brands are actively dodging responsibility for living wages:

All of this might be a surprise to you, but it may not be a surprise to the vast majority of brands that made the clothes you’re wearing right now. Many have known about insufficient wages (and the generational poverty that stems from these wages) for decades and are still doing very little about it. According to the Clean Clothes Campaign, 85% of large fast fashion brands surveyed in a 2014 study said that wages should be enough to meet workers’ basic needs. In 2019, however, none of these brands could demonstrate that any workers outside of their corporate headquarter countries were being paid a living wage (Source: Clean Clothes Campaign, 2019). There were also zero clear, time-bound plans for how a living wage would eventually be paid in supplier networks. Sadly, inaction by brands continually holds true throughout most of the fashion industry. 

Rather than sharing in the responsibility of living wages within their supply chains, here are five ways that major fashion brands are actively dodging responsibility today: 

1. Brands dodge responsibility by saying they pay “the legal minimum wage.” However, minimum wages in many manufacturing countries within the fashion industry are only half of what would be considered a living wage (Source: Global Fashion Agenda, 2017). Brands choose not to address this fact and instead avoid the problem they are contributing toward by putting forth an unjust argument. 

2. Brands dodge responsibility by claiming living wages are too costly. Some brands claim that paying workers a living wage is too difficult from an expense perspective, but that’s not entirely true. Studies show that it would only cost a brand 1-4% more per garment to ensure living wages across their supply chain (Source: Oxfam, 2019)

3. Brands dodge responsibility by saying the factory is responsible, not them. In many cases, brands shift the responsibility of ensuring a living wage to the manufacturer from whom they purchase. The problem with this logic is that those same brands are using their purchasing power to demand an extremely low cost from factories for the products they buy. And, the factories know there is always a threat that major brands will leave if they try to raise prices in order to pay workers more. A poignant real-life example of this appears in The True Cost (a groundbreaking documentary available on most streaming services) where a factory owner in Bangladesh explains–in intense tears–this sad reality. 

4. Brands dodge responsibility by saying workers are responsible. In other cases, major brands put the responsibility ON THE WORKERS themselves, claiming that “collective bargaining” and the right to create unions is the #1 protection of living wages. The problem with this logic? The reality is that workers are often threatened with losing their jobs when wages are challenged, and in some cases, even physically beaten by management. Again, hear the stories of real life garment industry workers in The True Cost, and you’ll quickly see how little power workers often have behind closed doors thousands of miles away from the final destination of our clothing. 

5. Brands dodge responsibility by saying living wages are too hard to calculate. Brands claiming that providing a living wage is not possible because living wages are difficult to calculate is a sad excuse. While they may not be perfect, living wage global benchmarks such as WageIndicator and Trading Economics are widely available (and MIT publishes a public database that shares what a living wage is in every county of the U.S.). On top of using these resources, brands can simply ask their workers what their living expenses are and establish the lowest wage based on those figures. Nisolo and ABLE have done this in many of their factories and have used affordable 3rd party auditor, ACCOUNTABLE to verify living wages. Sadly, most brands are not using these resources to improve the wages they pay their factory workers. 

Livia Firth, Cofounder of Eco-Age and long-time living wage advocate, says it perfectly:

“Lack of clarity or consensus on precisely how a living wage should be calculated cannot be a legitimate justification for paying wages that on NO calculation could be said to constitute a living wage...there are numerous studies that have dealt with this issue on a country by country basis and these studies have been published for decades.” (Source: The Circle. The Fundamental Fight to a Living Wage, 2017)

Enough is enough. It’s time for brands to stop dodging responsibility. Instead, we’re calling on all brands to vulnerably lean in and share their lowest wages and how they compare to living wages where they operate.

Why publishing lowest wages is the most critical step toward living wages.

At the expense of human dignity and wellbeing, brands are not improving their practices fast enough. This must change. And, we believe this can change within our lifetime. While the industry is far from this reality today, we believe the fashion industry has the potential to serve as one of the most powerful conduits for social and environmental progress. We envision a fashion industry in which every worker receives a living wage that covers their most basic needs. What would our world would look like if the 75 million people (and their children) held in poverty in the fashion industry were empowered out of poverty by receiving living wages for making the clothes we wear every day? 

In order to accelerate the journey toward more prevalent living wages, much greater transparency around wages is fundamental. And, there is no wage that is more telling than the lowest wage–not the average wage, not the “labor cost” within a product–but the lowest wage. For better or for worse, consumers often applaud brands for their transparency when brands share things like the “labor cost” that went into making a garment or the “average wage” in their factories. The problem with only sharing the labor cost (Example: a $10 labor cost within a $50 sweater) is that it often includes within it the profitable markup that a factory takes and workers never touch. Sharing the labor cost is a step forward in transparency, but it does very little to ensure that fair pay is taking place. Average wages are also misleading. Average wages usually take into account the wages of administration and executive staff of manufacturers. When it takes a factory worker 1.5 years to earn what a large fashion brand CEO makes on their lunch break, you begin to see how sharing metrics like labor cost or average wages is not as transparent as it may seem at first glance and certainly does not inherently drive toward living wages (Source: Fashion Revolution, 2017).

In contrast, determining the lowest wage and how far it is from a living wage changes everything. Knowing the lowest wage establishes a critical baseline and helps us understand whether or not the wages of brands and factories are on a trajectory toward living wages. Therefore, by identifying and openly sharing the lowest wage, brands take the first step toward protecting the most vulnerable workers and everyone else in their supply chains as well. 

Lastly, focusing on the lowest wage prioritizes honesty over perfection. The truth is the industry has a very long way to go. Even ABLE and Nisoo, the #LowestWageChallenge founding brands do not have all tiers of their supply chains at a living wage. Focus on the lowest wage requires the industry and consumers to embrace that you don’t have to be perfect before you can be honest at a time when greater, truthful transparency in the industry could not be more paramount.

Why consumers must be the drivers of lasting change.

Nisolo and ABLE are two brands out of thousands and thousands operating in the fashion industry. Obviously, we hope other brands will follow our lead and begin to share their lowest wages on the path toward providing living wages. However, from a basic economics standpoint, Supply (that is, the industry naturally moving in the direction of living wages) will never fix itself. Rather, Demand must outpace and drive Supply forward. Put simply, unless consumers begin to step up and demand through their words and purchases a faster shift toward living wages from the brands they love, this change will continue to happen far too slowly at the expense of human dignity and wellbeing.  

A perfect and important example in the fashion industry of Demand pushing Supply forward at an unprecedented rate occurred not long ago. Child labor remained rampant throughout the fashion industry in the 1980s and 1990s despite the efforts of governments, NGOs, and certain brands to combat it. When consumers became aware after photos and videos emerged of children making clothes for major brands in the mid 1990s, consumers took to the streets demanding change and child labor rates curbed dramatically. Child labor in the fashion industry is still undoubteldy an issue, yet, since the 2000s, child labor has been cut down by another 38% (Source: International Labour Organization, 2017). While there is crucial work still to be done relating to child labor, the fashion industry today is light years away from the 1980s and 1990s in large part because consumers demanded this change and the supply chain responded accordingly.

YOU are the critical player who can right what’s wrong in the industry today

A fashion industry where an estimated 98% of workers are unable to meet their most basic needs is unacceptable. Let’s pause here to ensure we’re not getting lost in the numbers of this issue–75 million people and only 2% earning enough to cover their basic needs. These numbers are astounding on their own, but let’s bring them to life. There are real people with names and homes and families behind these numbers, and they likely made the clothing you are wearing right now. 

With 75% of them being women, let’s put this a different way: Is she safe from physical and sexual harm because of the stability of her job? Is she earning enough to put food on the table? Can she send her children to school, deterring generational poverty? Is she free to dream? Brands publishing their lowest wages is the first step to ensuring a “yes” is the answer to these questions one day.

Governments, NGOs, and brands have been talking in circles about wages for too long now, and change is once again occurring far too slowly. The time has come for YOU to demand more from the industry for the sake of millions of people and their families. 

This is why ABLE & Nisolo created the #LowestWageChallenge, and now we need you to bring it to life. 

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State of The Industry: Lowest Wages to Living Wages
State of The Industry: Lowest Wages to Living Wages