M&S

Download M&S's submission (pdf)

Responded to survey: Yes. Made changes in response to initial comments.

MSI involvement: yes, Ethical Trading Initiative [what's this?]

Grade 3.0: Can offer concrete examples of steps to increase wages in the supplier base, but there are either significant omissions or there is no clear plan to move beyond pilot projects. [what's this?]

Summary

M&S' plans on workers' wages are impressive in breadth, but lacking in depth. Through its project it hopes to improve workers' wages, but only through improvements in productivity, and stops short of a clear commitment to securing a living wage for its workers.

Position on living wages

M&S has signed up to the ETI base code, and therefore accepts the living wage principle, adding that, “all workers in our supply chain should earn enough money to live on.” It gave an example from its 'detailed wage analysis' in 'a number of key sourcing countries':

"In Bangladesh we found that 60% of the workers in our supply base are paid on average 78% more than the legal minimum wage for a standard working week. This equates to TK2950, which is almost the living wage figure of TK3000 stated by a number of NGO’s and Trade Unions at the beginning of the development of the project (end 2007)."

Although M&S subsequently emphasised that this was just an example, it is important to clarify that the Tk3000 figure was used by trade unions as a figure for the national minimum wage negotiations in summer 2006 – the minimum wage a that point was set at Tk930 - not as a living wage figure. It was based on political feasibility, not on basic needs. At the time, the living wage in Bangladesh was usually estimated as significantly higher, around Tk4500-6000. With double digit inflation in Bangladesh over the 18 months between this point and December 2007 – not to mention since then – the living wage figure will undoubtedly have increased substantially. At the time of writing, rioting workers in Bangladesh are calling for a minimum wage of Tk4500.

M&S believes that, “Freedom of Association is important as it gives workers the opportunity to voice their opinions and express their views. It can be achieved in a number of ways, including through trade unions or workers committees.” Workers' rights training is included in its wages programme for this reason.

It notes that, “the issue of wages goes beyond the factories and applies to all workers involved in the production of our products, including homeworkers,” although it does not cite any specific work on wages and homeworking.

Work so far on living wages

M&S' work so far has focused on Bangladesh, where it has included a suppliers' conference on ‘how to sustainably increase workers’ wages’, a wage analysis and worker interviews.

Plans on living wages

M&S said that, “in 2008 we will establish a total of six Model Ethical Factories in our supply base - three in Bangladesh...two in UK and one in Sri Lanka.” In 2009 it plans to, “develop this initiative in India and China,” and, “share the learnings and best practice...with the rest of our supply base.”

The brief for these ethical model factories focuses on three areas:

1. Productivity and efficiencies in manufacturing

2. Worker rights training and supervisor training

3. Industrial relations management systems.

M&S has appointed a consultancy in Bangladesh which, “will work with a well respected local women’s workers’ rights NGO,” “carry-out supervisor training,” and, “aims to work with an internationally-recognised NGO which has a centre for worker training and development.”

“In Jan 09,” M&S continues, “once the Ethical Model Factories have been established in Bangladesh, follow-up worker interviews will...enable us to: compare [workers'] views of their improved wages to a living wage; explore what a suitable living wage is at that point.”

Then, ”in collaboration with the ETI, NGOs and other informed bodies such as the MFA Forum, we will discuss what an acceptable and realistic living wage figure is considered to be for 2009.”

Other significant information

M&S listed a number of other activities, including an expansion of its ethical trading team and improvements to its factory monitoring programme.

Our comments

There is no doubt that M&S' plans indicate a significant engagement with the issue of workers' wages, which is a new departure for M&S and to be welcomed. That this work is expected to extend into several countries within the next year marks this out as a piece of work that goes beyond the normal isolated pilot project. That said, M&S' work falls down on all four pillars of a good living wages project:

1. First, M&S has chosen to go it alone, rather than working with other brands and retailers. It does of course collaborate through various forums such as the ETI, but its project would be stronger and more sustainable if it were already collaborating on the design and implementation.

2. Second, though we are pleased that M&S recognises that freedom of association and living wages are connected, it appears to see this connection only in terms of, “giving workers the opportunity to voice their opinions and express their views.” The role of trade unions in the living wage discussion is much deeper than this, because it must include collective bargaining, whether directly negotiating workers' wages within a factory, or negotiating local or national wage figures with workers' representatives.

Also to note is that it views workers' committees and trade unions as equivalent. Workers' committees are often controlled by factory management and don't provide the same forum for expressing and demanding improved conditions as trade unions do. Although they are a valuable alternative where there is no freedom of association (such as in China or some free trade zones), workers' committees should be viewed as second best to a recognised trade union.

1. Third, M&S' work on its own purchasing practices is limited to training for buyers, and does not examine the relationship between the prices it pays to suppliers and workers' wages.

2. Fourth, M&S has not committed to a sustained implementation of the living wage throughout its supply chain. Its commitments stop at 'improving' wages, and focus on productivity improvements; in 2009 M&S commits only to examining and discussing a living wage figure. By committing only to improving wages, M&S sets the bar too low. We were surprised by M&S' statement about wages in Bangladesh. From the worker interviews it has conducted, it should be aware that the Tk2950 figure it uses is nothing like a living wage, and was not even in 2006. It is also concerning that M&S frames the findings of that research in terms of the 60% of workers who earn this paltry amount, rather than the 40% - a sizeable proportion – that must be earning less.