Paying Workers a Living Wage: Why This is a challenge

Nowadays, end-consumers want more for less - the price of this is weighed on the supply chain that facilitates the products they produce. Clothing suppliers' margins diminish and struggle to pay their workers a living wage.
4 minute read

It all starts with the consumer

The garment industry is one often under the microscope when discussing underpayment and unfair treatment of staff. Clothing manufacturers in the UK and overseas are battling two opposing forces; the first is the large corporate businesses who are pushing clothing manufacturers to compete with one another in order to drive down their unit costs and turn over more profit, whilst the other is the owners of these factories simply paying their staff a viable living wage and maintaining their overhead for production.

In fact, let’s actually discuss the key difference here- you have a national minimum wage, which is often imposed by the Government and sets out what businesses legally have to pay their staff.
Then you have a minimum living wage. To be fair, a living wage is hard to calculate as there’s so many variables that go into it, but a living wage is essentially a calculation of what a minimum amount of money one should earn in order to live- i.e. afford the basic necessities.

Where does the responsibility lie?

Dominique Miller, the Director of Policy at Labour Behind the Label, a not-for-profit organisation based in the UK stated the following;

“If one factory owner agrees to produce jeans for $2, then another can’t charge $2.50 or they’ll lose business,” she says. “In a sense, we are all fuelling the race to the bottom, but it’s the largest, most successful brands that are driving themselves and the competition the hardest”

Dominique also went on to say- “The fact that a brand has the power essentially to say, ‘Well, we’ve got these contracts agreed but we want you to provide it to us with this discount,’ is quite significant. But it happens all the time: Brands on the one hand puff up their corporate social responsibility and on the other hand, when it suits them, do the opposite in terms of producing standards.”

That last sentence really hits hard- how many brand nowadays claim to be held accountable for the social responsibility tied to their clothing manufactures but then directly drive down prices through unfair negotiation tactics; all of which comes at the workers expense when those clothing manufacturers already work on such tight margins due to the significant overhead associated to production?

The key issue here is that although brands might work with many clothing manufactures in the UK, or overseas for a number of years and drive a lot of business for them- they ultimately, don’t own these factories and when it boils down to it they can claim (and rightfully so) that they have no official control over wages. All of which is fair, but would happily play the card this way but refuse to acknowledge the indirect effect their negotiations to ridiculous unit costs has on this situation.

The economic divide and the movement:

Billionaire wealth has soared by an annual average of 13 percent since 2010 — six times greater than the wages of regular workers, which have risen by a yearly average of only 2 percent, according to Oxfam International.

“Economic rewards are increasingly concentrated at the top,” Oxfam says. “It takes just over four days for a CEO from the top five companies in the garment sector to earn what an ordinary Bangladeshi woman garment worker earns in her whole lifetime.”

Again, we feel the need to reiterate the last point to really show the extent to this divide. The individuals who work for these clothing manufacturers are earning next to nothing; yet they’re doing the labour.

The good news is it’s not all bad. The economic divide is also a direct result of the difference in wealth between the different economies and smaller, nimbler companies are often the ones driving the change and innovation when it comes to fair pay for clothing manufacturers and their workers.

Brands like Continental Clothing are doing amazing things for the bottom line of clothing manufacturers employees where small price increases on products are directly trickled down through the production line

The Consumer:

The consumer is the biggest influencer in the causation of low living wages being paid to clothing manufacturers workers. Don’t believe us? Think about it- how many times have you clicked off of a website because the prices are too high?

The consumers have an expectation of what they should pay and brands, in turn have to meet this expectation; all of this whilst turning over a profit margin to sustain operations and continue to grow and scale… this leaves very little room at the end. Brands are forever negotiating with suppliers and pushing for getting product for nothing.

Our Approach:

It’s simple- companies can be extremely efficient organisations when it aiming to achieving specific goals, but only if they’re set on doing so and doing so consistently.

Our approach is to do this consistently. We’ve previously stated many times about our approach to ethical manufacturing and one of the key elements of this is minimum living wages being paid.

This is why we justify our prices. We actually never negotiate pricing with clients because a race to the cheapest price is one to the bottom and it won’t be at their, or our expense but instead the factory workers who are the foundations of these clothing manufacturers and without them, none of us would be in business.

The dedication to the craft must be respected and ultimately appreciated- the best way to do this is to ensure we have a transparent, clear and consistent process in place by doing the following;

  1. We rarely negotiate the price our clothing manufactures quote us- we simply pass this on and if the client is happy, we pay this amount,
  2. We only work with clothing manufacturers who have independent ethical certifications; all of which cover fair pay and treatment/ working conditions for staff,
  3. We constantly review the status of the above- we will always ensure the certifications are in-date.
  4. We will be shortly announcing a new process we’ll be implanting to add credibility to all of the above.

About the author
Anthony Mellor

Anthony Mellor is a fashion entrepreneur, writer and consultant. Anthony writes in-depth articles about topics related to fashion, business and supply chains.

Anthony successfully scaled and exited a D2C fashion brand at the young age of 20. Since then, he's gone onto start and successfully operate two multi-6-figure clothing manufacturing businesses and currently offers up one-to-one constancy to brand owners.

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