Ensuring production workers receive decent pay is not easy because of the global supply chain and factories located in low-wage countries. Four brands Nudie Jeans, Mini Rodini, Armedangels and Kings of Indigo have joined hands to ensure workers’ rights.
These brands plead for industry collaboration: which includes other brands, partners, workers, NGOs and unions. The four Fair Wear brands are working together to implement living wages at a shared partner in Turkey. They tackle the challenges.
We all have to be [part of] the change we want to see in the world said an official of the Stockholm-based Mini Rodini brand. The four are against slavery, pollution and overconsumption which is a race to the end of everything soon.
A living wage is the minimum amount of pay workers need to meet their basic needs. But this simple description masks complex issues. A living wage varies from country to country and region to region depending on geographic-specific factors such as the cost of food, housing, transportation, healthcare, clothing and other necessities. Whether or not a government mandates a national minimum wage, there is often a significant disparity between wages being paid and true living wages. Research from 2019 by Labour Behind the Label, an ethical fashion advocacy group, found that the legal minimum wage in Sri Lanka was about 13 percent of what would be a living wage there, and in Georgia, the minimum wage was just 10 percent of a living wage. These gaps tend to widen with time, as the cost of living can rise faster than typical income.
The four brands behind the Living Wage Project at the time of writing were working together to help close those gaps specifically for the production workers at Mergü Tekstil factory in Izmir, Turkey. Independently, the brands had already taken measures towards paying living wages to their suppliers; Nudie Jeans, in Gothenburg, and Mini Rodini have done so in India for many years, and Cologne-based Armedangels’ ‘true costing’ methodology ensures that all suppliers pay 20 percent above minimum wage.
The Fair Wear Foundation, a non-profit that works to improve conditions for workers in garment factories, stresses that international supply chains are complex and raise many practical questions before and after a brand, a factory and workers have agreed on a living wage benchmark. But one key starting point is that pricing must be determined from the bottom up.
A product’s price based on what a consumer is prepared to pay for it. With this as a starting point everyone takes their share: retailer, brand, shipping company, and factory, leaving little for workers and materials suppliers.
Through a bottom-up approach, the fair cost of materials and worker wages and building are assessed. So, at the heart of paying a living wage is calculating the fair cost of material and wages, and then establishing a reliable system for making sure payments make it to their intended recipients.
Fair Wear’s methodology of calculating labour/minute costs has been quite helpful in simplifying calculations. This approach, as described by Fair Wear, ‘uses payroll data to calculate how much it would cost each year to raise wages to a living wage. This total annual cost is measured against data about the time (in minutes) required to make each garment to calculate a brand’s share of higher labour costs.
While payment and invoicing are carried out separately by each brand, working out the logistics as a team was key to getting the programme off the ground.
The Living Wage Project brands bridge the gap by issuing bonus payments to supplement workers’ wages. In 2021, the group paid a combined total of €50,000 in bonus payments to the production workers at Mergü, and in 2022 nearly €72,000. It is felt that collaborating means each brand has more leverage and more potential impact than if they were acting alone.
What started as a pilot project is now what Fair Wear officials describe as an implemented living wage programme. “We’ve had positive results and feedback from both Mergü and the partner brands. The structure is in place and we will continue to work accordingly with regular follow-ups as long as the programme fulfills its purpose” said one official.
Even in moments when fluctuations in the global economy make it difficult to pay workers fairly in another part of the world this pilot project is encouraging. The most important lesson from this project is that it can get very complex sometimes. The second lesson: you need to listen to the reality of your supplier. Third lesson: nothing is impossible.
Living wages to garment workers implemented by a coalition of four brands
