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Global buyers not living up to pledges

  • Published at 10:06 pm June 1st, 2019
Global buyers not living up to pledges
Garment workers at work in a factory Syed Zakir Hossain/Dhaka Tribune

The researchers conclude that whilst garment companies have made ambitious commitments to paying living wages in their global supply chains, they are falling short when it comes to meaningful action to implementing these commitments

Global apparel brands, who buy goods from Bangladesh, are failing to translate into action or result their commitments of paying living wages for workers, says a study.

The study titled “Corporate Commitments to Living Wages in the Garment Industry”   conducted on 20 global brands by academics from the Sheffield Political Economy Research Institute (Speri) at the University of Sheffield revealed the findings published on Thursday. 

The study investigated the commitments and actions that 20 garment companies had made about paying living wages across their supplier network.

The researchers used primary data collected through a survey disseminated by the Clean Clothes Campaign (CCC) to garment companies, as well as data collected by them. 

In addition, they also assessed commitments and progress made by a sample of leading non-garment companies.

The researchers conclude that whilst garment companies have made ambitious commitments to paying living wages in their global supply chains, they are falling short when it comes to meaningful action to implementing these commitments.

“Our research finds that while some corporations have made commitments to living wages, these commitments have mostly not yet translated into meaningful action or results. There is little evidence that corporations have effectively defined, benchmarked, or enforced the payment of living wages to the workers in their global supply chains,” mentions the study.

As per Asia Floor Wage Alliance, living wage should allow a garment workers to bear the expenses of rent, healthcare, clothing, transportation and education for themselves and their families. The wage should allow the workers to pay for themselves, and also have a small amount of savings.

“Consumers are purchasing given that several companies are involved in products they believe are made by workers earning a living approaches to living wages, when in reality, low-wages continue to be the status quo across the global garment industry,” it says.

The researchers have found that corporations have outsourced their living wage commitments to multiple external initiatives, which have unenforceable standards and company policies are often out of step with these initiatives.

Besides, there is widespread inconsistency and confusion amongst corporations over the definition of a living wage, while corporations lack living wage benchmarks and most lack a ‘roadmap’ for achieving their living wage commitments.

On the other hand, corporations are reliant on social auditing for compliance and enforcement of living wage commitments, a tool known to be flawed and to produce misleading depictions of labour standards in supply chains.

There is lacking transparency among corporations about the wages that are actually paid to workers throughout their supplier networks, show the report findings. 

There is weak enforcement of freedom of association rights which may disempower workers from raising concerns about unmet wage commitments. And the commitment and progress towards living wages in non-garment industry global supply chains is extremely limited, it added.

The Guardian quotes, Professor Genevieve LeBaron, the director of Speri, as says: “There is little evidence that corporate commitments to living wages are translating into meaningful change on the ground.

“As such, consumers are purchasing products they may believe are made by workers earning a living wage, when in reality, low wages continue to be the status quo across the global garment industry.”

She says corporations need to evaluate their sourcing practices and ensure they are paying enough to allow suppliers to pay out living wages. 

“They need to adopt existing benchmarks and living wage calculation methodologies and clearly map out how they will achieve living wages for different tiers of suppliers and by when,” she states.

“Until companies can take such steps, living wage commitments are likely to remain in the realm of rhetoric rather than leading to substantial changes that address low wages for workers in the global garment supply chain,” she notes.

The Guardian also quotes Tom Hunt, deputy director of Speri, as saying that the global garment industry is “extremely profitable” but workers in the supply chains are not benefiting from the value they are creating.

“Without significant change from industry and governments, workers will continue to receive low wages that do not meet the basic needs of food, housing, medical care, clothing and transportation for themselves and their families,” he said.

Adidas, C&A, Decathlon, G-Star RAW, Gucci, H&M, Inditex, Nike, Primark, Puma, PVH, Tchibo, Under Armour and Fast Retailing/Uniqlo responded to survey questions, while Amazon, Fruit of the Loom, GAP, Hugo Boss, Levi Strauss and Zalando did not. 

Only three of 20 companies (H&M, C&A and G-Star RAW) committed to wage payment that includes all of the key components in the CCC definition of a living wage, mentions the report.

Yet, all survey respondents apart from Nike claim a commitment to living wages, and 17/20 brands in the study are members of initiatives that profess a commitment to living wage payment, it adds.

Since there no clear definition, the research suggests setting definition of a living wage collectively to address the significant confusion between the rhetoric and reality of corporate commitments to ensuring that workers in their supply chains are paid a living wage.

Companies should increase transparency about the payment of living wages in their supplier payment, while companies should recognize the essential role of unions and worker organizations in securing a living wage for workers in their supply chains. 

It also called for a business model, which would acknowledge the role that business models and sourcing practices can play in creating the conditions where workers are paid low wages within their supply chains, and explain how they will address these pressures in their efforts to deliver living wages.

After the Rana Plaza collapse in 2013, under pressure from workers, unions and civil society organizations, corporations have made ambitious commitments to address these problems. Paying a living wage to workers in their supply chains is a key commitment made by corporations.