Clean Up Fashion

Grade 2.5: Can offer concrete examples of steps to increase wages in the supplier base, but pilot projects are limited in scope and have significant omissions. [what's this?]

Summary

Some evidence of thoughtful purchasing practices but no clear progress towards payment of living wages. Aside from a wage study which proves that workers are being paid below living wage levels, its focus is primarily on productivity projects.

Position on living wages

‘As noted by the Clean Up Fashion campaign, among others, there has long been contention about what this attempt to define a ‘living wage’ means in practice... The lack of a commonly-understood definition means we don’t find it practicable to use the term in day-to-day work. But we agree with the ‘consensus’ definition set out on the Clean Up
Fashion website which states that a living wage should, cover basic needs, include a small amount of discretionary income, and cater for dependants.’

Position on freedom of association

‘We expect all of our suppliers to meet the standards set out under the ETI Base Code and guarantee their workers the rights within it.’ This includes ‘Freedom of Association and the right to collective bargaining.’ Tesco however seem to take a hands off approach to this right, as no mention is made of it in the submission.

Work so far on living wages

Tesco said: ‘We believe that sustainable improvements to wages are most often delivered through improved productivity, upskilling workers and working to ensure our purchasing practices support our suppliers’ ability to invest in their workforce.’

It lists ‘specific wage and wage-related work’ under the following headings:

Ensuring we understand the scale and nature of the issue. Activities: Wage surveys and worker interviews in Bangladesh.

Setting clear expectations.
Activities: Lobbying government in Bangladesh to improve minimum wages, MFA Forum

Supporting suppliers to improve productivity.
Activities: Lengthening lead times, producing seasonal items out of season to help suppliers plan production, rewarding ethical suppliers, expanding in-country ethical experts.

Building long-term relationships to enable investment in workers. Activities: Consolidating the supplier base, offering business support to ‘A-list suppliers’

Tesco accept that some minimum wage levels are unacceptably low and have conducted a wage survey with a supplier in Bangladesh. It found that:

‘less than a quarter of our suppliers’ workers are in the lowest-paid grade, known as Grade 7. Of workers in this grade in our supply chain, average wages including overtime are currently around 60% higher than [the minimum wage]. This is still short of figures
campaigners and we would like to see, especially given that wages ought to be sufficient before, rather than after, overtime – but it does show some progress.’

Plans on living wages

Tesco’s main focus for wages work is to continue with the ETI wages project. It acknowledged that: ‘This group has experienced some delays over the last year due to its focus on Bangladesh and that country’s political and industrial instability.’ However, it stated that, ‘useful work has been shared, including by us, in the areas of productivity,
efficiency, worker engagement, work flow, and purchasing practices. Following the summer this group will re-convene to decide on how to move forward. Building on this work, we will review further initiatives of our own specifically in Bangladesh on productivity and wage improvements.’

Our comments

In a similar vein to last year, Tesco seem to have made little progress towards living wages. Surveys in Bangladesh, showing the ‘training grade’ for workers being manipulated by suppliers for extended periods of time, informed a small piece of work to improve wages but this merely brought pay packets up to the legal minimum standard and no more.

Tesco’s belief that productivity is the best route to living wages seems to have ousted a number of other options, such as support for freedom of association and a proper examination of pricing. Its focus on upskilling workers as a part of these improvements may be helpful for individual groups but doesn’t achieve an across the board rise in wages. It is also unclear how it plans to ensure more skilled and expensive workers are not replaced by new, lower paid, unskilled workers.
Furthermoe, Tesco makes no mention of any work to ensure worker involvement in any of its projects, which makes us even less convinced that its productivity plans are likely to lead to any real benefit to workers.

Tesco’s work with suppliers on purchasing practices; offering longer lead
times, producing out of season, ensuring long-term supplier relationships, and offering business advice could bring about some improvement. Last year it also acknowledged that price needed to be examined, but no progress seems to have been made in this area and no mention was made of plans to move this forward.

Let’s hope Tesco’s engagement in the ETI Wages Project over the coming year will see it start to output wage projects of its own, and give serious attention to delivering the living wages expected from a retailer of this size and influence.