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Everyone deserves a living wage, agree activists, trade unionists and a growing pool of fashion brands. But a precise definition of a living wage remains elusive.
Now, global non-profit WageIndicator Foundation is making its living wage benchmarks open access for the first time since its foundation in 2014. The move is intended to minimise confusion, make wage negotiations more transparent, and catalyse progress. Country-specific information will be rolled out from 1 July.
Workers, trade unions and small employers will be able to access their local living wage benchmarks free of charge and published in local currencies and languages across 2,290 regions in 155 countries. Larger companies will continue to pay for access as they require more comprehensive data, explains Paulien Osse, who co-founded WageIndicator in Amsterdam and who is the global living wage team lead.
A growing movement to guarantee living wages for garment workers imagines a shift in fashion supply chains that would redress global power imbalances. It highlights how far there is still to go.
“This has never been done before, and certainly not at this scale,” says Charlene Collison, director of collaborations at business network and consultancy Business for Social Responsibility (BSR), which is working with WageIndicator Foundation and a consortium of other living wage organisations to harmonise living wage benchmarks and methodologies. Their findings are scheduled for launch later this year.
It’s a marked departure from the current state of play, Collison explains. “At present, we have a competing range of datasets, which creates confusion in the market and can facilitate a race to the bottom, where brands use the lowest available living wage benchmarks and have wildly different figures for different countries. It focuses the debate on which number is the right number, rather than how best to operationalise living wages.”
According to the 2022 Fashion Transparency Index, 73 per cent of brands do not disclose their approach to achieving living wages for supply chain workers, 96 per cent do not disclose the number of workers in their supply chain paid a living wage, and 94 per cent do not publish their annual progress towards living wages.
Different living wage benchmarks include and exclude different metrics, based on how a living wage is defined. For some, it’s the amount required to cover basic necessities so that individuals can continue to work. For others, it’s the minimal figure for workers and their families to participate and thrive in society. The cost of childcare and children’s education are often debated, for example: not all benchmarks account for regional variations or the different cost of living between cities and rural areas. WageIndicator Foundation includes housing, food, healthcare, transport, education for children, clothing, water, phone (calls and data), unforeseen expenses, and taxes and social security.
WageIndicator Foundation benchmarks are updated and audited every quarter to account for disruption and inflation, explains WageIndicator’s Osse. She says the data comes from large-scale surveys supplemented by a global fleet of 250 data collectors on the ground gathering current prices for basic necessities.
Still, there are limitations, which is why it has historically been so hard to pin down living wages, Osse adds. “Countries like Turkey have very high inflation right now, and countries with war conditions, such as Lebanon, are facing changes on an almost week-by-week basis. You still have to take these numbers with a pinch of salt.”
Living wages vs minimum wages
Living wages are often higher than statutory minimum wages, although 22 countries — including Canada and Switzerland, per WageIndicator’s latest benchmarks — invert this trend. This is because minimum wages cover less metrics than living wages and often overlook context-specific regional differences, explains BSR’s Collison. In Ethiopia, for example, WageIndicator’s Osse says the statutory minimum wage is 80 per cent lower than the living wage. Others have a gap of 30 per cent or 50 per cent.
Unlike statutory minimum wages set by governments, living wages are voluntary and not legally binding. But neither are fully enforced. Activists point out that many factories still do not pay minimum wages, a situation made worse by many brands cancelling orders and demanding discounts during and since the pandemic, leaving factories with even less income to distribute among workers.
“There are wage negotiations for at least two billion people that are impacted by wage setting practices in global value chains,” says Collison. “By addressing the living wage, you can impact on at least 16 human rights and 10 of the United Nations’ Sustainable Development Goals. So, the impact of these imbalances is really significant.”
At present, workers and trade unions trying to negotiate living wages don’t have clear oversight of the latest benchmarks — unlike companies that are able to pay for access to multiple benchmarks in multiple countries. This creates an imbalance that is stalling progress, says Collison. “These benchmarks shouldn’t be done over workers’ heads, they should be part of the conversation,” says Osse. “If they know the number that is considered fair, they might be able to negotiate better for themselves.”
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