Most companies seem to think that ensuring payment of a minimum wage is sufficient to have discharged their responsibilities, or at least an adequate stop-gap measure.  But a stop-gap for what? There is little cause for workers to be optimistic on the basis of our sources.

Brands and retailers at the top of the supply chain aren’t passive entities floating on a sea of global trade.  When they work together, they control the industry.  They don’t have to relocate to chase the cheapest labour.  They could take responsibility for their actions, commit to paying a living wage, and absorb the small increase in costs this might create.

Whether a living wage is defined by a formula or by collective bargaining, it requires that companies address the root problems of the conflicting messages they send to factory managements, and the way they purchase.  This means finding solutions that work on a country-wide, supply chain-wide and ultimately an industry-wide level.  Companies deserve credit for working actively to find industry-wide solutions to the difficulty, but not simply for signing up and then doing nothing.

This means that buyers need to:

  • Develop strategies to improve wages, above and beyond minimum wages, in their supplier base.
  • Engage in good-faith negotiations with factories to ensure that a living wage can be paid out of prices paid to the factory. Accept that this may increase the cost they pay to suppliers.
  • Make it clear to suppliers that they expect workers to be paid a living wage.
  • Make it clear to suppliers that negotiating wages via a functioning collective bargaining agreement will not come at the expense of their custom.
  • Ensure that local trade unions, who are better placed to get information from workers, and know the local cost of living, are involved in supplier audits.
  • 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 multistakeholder initiatives.