Retailers face accusations that, despite widely lauded pledges, workers in their supply chains are still being paid less than a living wage
Marks & Spencer and H&M, two companies that have been feted for their ethical supply chains, have been accused of failing to ensure a “fair living wage” in their supply chains.
The campaign group Labour Behind the Label says in a new report, “Do we buy it?”, that M&S and H&M had “hung their ethical credentials about this key human rights issue, to great applause, but without reporting clearly on the outcomes of the schemes”.
M&S had promised that workers in its supply chain would be earning a fair living wage by 2015, but according to the report has “repeatedly failed to disclose the benchmarks it was using to calculate a living wage, or any specific wage data showing the impact” of its living wage commitment.
H&M, which has said all of its “strategic” suppliers will be paying a living wage by 2018, has also failed to set a fair wage benchmark, Labour Behind the Label says.
The report finds that workers supplying M&S earn on average £66.61 per month in Bangladesh, £69.33 in India and £87.18 in Sri Lanka, factoring in basic pay and overtime. By comparison, workers' own estimates of a fair monthly wage in the three countries, which would permit a family to have a decent quality of life, are £124.90, £127.12 and £153.10, respectively.
Workers appear to be doing better in factories supplying H&M in Cambodia. The report finds average wage levels had increased to $187.97, though still short of the $230 a month workers estimate they needed to live with dignity.
The wages look even worse when compared with estimates developed by the Asia Floor Wage Alliance, a coalition of trade unions and rights organisations, of what Asian workers should be paid. In Bangladesh, M&S supplier workers are paid just 27% of the Asia Floor Wage level. In India and Sri Lanka, the proportions are 38% and 37%, while H&M’s Cambodian workers are making 47% of the Asia Floor Wage for that country.
M&S responds
M&S has defended itself against the accusations, saying it remains “committed to ensuring our cost prices [the price is pays to suppliers] remain high enough to pay a fair living wage”. M&S says the workers who make its clothes are paid significantly more than the minimum wage, which in Sri Lanka, for example, is just £44.80 per month.
But campaigners say legal minimum wage levels in developing countries are set at rock-bottom to attract foreign investment. In countries such as Bangladesh “it's not really possible to survive on the minimum legal wage”, says Anna McMullen of Labour Behind the Label. She adds that brands should be more transparent about what they consider a living wage to be. On this issue, the garment industry is “not transparent”, she says.
What is fair?
The case underlines a fundamental problem for brands that make living wage promises. What exactly constitutes a fair living wage? Sonja Vartiala, executive director of Finnwatch, a Finnish non-profit group that promotes ethical corporate behaviour and has worked extensively on living wages, says wage-setting “should be done locally” and be “based on local field research”.
Vartiala says the Asia Floor Wage is “quite high in some countries” and might not be a fair benchmark against which to measure companies such as M&S. The fact that workers in the “Do We Buy It”? report estimated fair living wages to be significantly below the Asia Floor Wage would seem to support the idea that it is unrealistically high in some countries.
New work is under way by the Iseal Alliance, the coalition of sustainability initiatives that works on standards for sustainability certification schemes, to establish country-by-country living wage levels. Benchmarks have so far been developed for the Dominican Republic, Kenya, Malawi and South Africa, with more to follow, including Bangladesh, India and Sri Lanka.
This work could provide a “much better calculation” of living wages than exists currently, Vartiala says.
A spokesman for H&M says the Swedish retailer has “one of the highest sustainability standards in the textile industry for our suppliers and has for many years put great efforts in the manufacturing countries to improve working condition and wages and strengthen workers' rights. We are humble about the challenge of long-term change for all the people who make H&M's products, and by collaborating with others we want to contribute to a change in the whole textile industry.”
