The global fashion industry contributes to economic prosperity. With approximately 60 million people employed along its value chain, promoting industry-wide collaboration to explore opportunities and develop better wage systems is an opportunity for fashion brands to enhance the prosperity of people interacting with the value chain.
Erica Bartle is Co-Founder of Outland Denim, one of Global Fashion Agenda’s Associate Partners. She writes about how the brand has worked tirelessly at ensuring that their workers receive a living wage.
Rom Chang is a single mother and sole income earner, providing for herself, two children, her mother and grandmother. With a limited safety net, she and her family were entrenched in significant debt, a widespread problem in low-income countries such as Cambodia. Denied basic rights under international labour law, she left her former garment industry workplace to join Outland Denim. Today, Chang is not only debt free but also sponsors her nephew to go to school. This is the power of paying a living wage.
The right to a fair wage is enshrined in the United Nations Universal Declaration of Human Rights. Furthermore, the UN Guiding Principles on Business and Human Rights, adopted with the support of the business community in 2011, states: “The responsibility to respect human rights is a global standard of expected conduct for all business enterprises wherever they operate. It exists independently of States’ abilities and/or willingness to fulfil their own human rights obligations and does not diminish those obligations. And it exists over and above compliance with national laws and regulations protecting human rights.”
Hence, businesses must not see taking economic advantage of others as an opportunity when States have porous rules or low standards. It is imperative that businesses conduct indirect, local activities, such as outsourcing, because what they do affects their supply chain with regard to “human rights impacts either through their own activities or as a result of their business relationships with other parties”.
At Outland Denim, fair remuneration guided by an international living wage standard is a fundamental part of our humanitarian business model, creating economic protection for staff members formerly vulnerable to, or who have experienced, exploitation, slavery and precarious employment.
Many garment workers are under enormous pressure to contribute to the household income, and often, as with Chang, they are the sole breadwinner. According to the International Labour Organization, there are approximately one million garment, textile and footwear (GTF) workers in Cambodia, 80% of whom are women who directly provide income that supports one in five households.
At Outland Denim, our living wage foundation is based on Anker methodology, a widely recognised benchmark that is both internationally comparable and locally specific. We have customised some parameters to align them with the situation in Cambodia, including the number of household members and dependents. For example, a household may be made up of relatives outside of the immediate family who are also dependent on the household’s income earner(s).
Outland Denim regularly surveys staff to further understand their living costs from their perspective and experiences, providing unique insight into the living behaviours and financial needs of staff in their respective localities. This allows a business like ours to better accommodate and, consequently, add value to its workforce.
This exchange of value is ultimately mutually beneficial. Paying and treating workers fairly is linked to reduced turnover, better quality workers, increased commitment and more productive workplaces overall. In addition to a living wage, career and pay progression according to skills acquisition, we support staff with education in financial literacy, supply medical support and provide other initiatives, such bonuses, technical training and upskilling. It’s true that the global garment industry has created employment opportunities for millions of women and men, helping to lift millions more out of poverty. The number of working poor has decreased significantly in Asia and the Pacific, the rate dropping from 33% in 2000 down to close to 5% in 2018.
The garment industry’s impact is surely significant. In developing Asia, which includes India, China, Bangladesh, Indonesia, the Philippines, Pakistan, Cambodia, Myanmar, Sri Lanka, Thailand and Vietnam, the GTF industry employs 43 million people, formal employment and a regular wage relieving economic stress, not to mention providing protection from the perils of modern slavery. Nearly nine in ten GTF workers in Bangladesh, Cambodia and Vietnam are salaried. But there is significant work to be done to provide a decent living wage to the vast majority of workers in the global fashion supply chain, 80% of whom are young women with limited education and employment opportunities and who scarcely earn enough to survive or be afforded a dignified existence, where their basic human rights are met.
The private sector has a key role to play in lifting people out of poverty and employment precarity and into relative prosperity. In developing countries, the private sector generates 90% of jobs, funds 60% of all investments and provides more than 80% of government revenues. Rather than chasing the cheapest options and a productivity-at-all-costs mindset, we need to rethink the entire fashion production system and make it inclusive, while protecting and promoting the interests of the poor and vulnerable.
With a growing global population in need of work opportunities, and the encroachment of automation, robotics and digitisation in many traditional fashion jobs, we need to be mindful, as a global community, of the very real impact, positive and negative, that our business actions have on the lives of others.
Workers with adaptable skill sets and familiarity with technology will be at a significant advantage. But they still require jobs and living wages to exist while the skills gap is being addressed through partnerships with government, educational institutions and NGOs.
Creating opportunities within the new, sustainable fashion economy has the potential to achieve excellent results, especially if subsectors such as circular textiles, recycling and the re-sale market are included. For low-skilled workers like Chang, however, disrupting the global fashion supply chain may result in devastating consequences: a generation of underprivileged women displaced by an industry that exploited them for their cheap labour and then moved on.
Let’s use our collective resources to promote their interests and create a new fashion paradigm that we can all be proud of.