The workers’ perspective

Another year, another raft of evidence that demonstrates the poverty in which the clothes we wear are produced.  Britain’s top three clothing retailers, Marks and Spencer (M&S), Tesco, and Primark, reported combined profits of £3.78 billion in the last year.¹⁰   These profits are thanks in large part to the hard graft of tens of thousands of workers, mostly in developing countries, some of whom have been shown to make as little as four pence an hour for an 80-hour week.¹¹  Not every brand or every country has been subject to a media exposé in the last year, but the conditions shown up in media reports are not extreme cases: they are endemic throughout the industry, as retailers are beginning to admit.

Systematically underpaid

Much of the discussion has focused on Bangladesh, and with good reason: its workforce remains one of the lowest paid and most shockingly exploited.  Rahela, working in a factory supplying UK supermarkets, told ActionAid, “sometimes we don’t have enough to eat. My neighbours are too poor to give us anything. I cook what I can manage. Sometimes it’s just rice.”¹²  Nazera, working in a factory supplying Asda and Tesco, earns just £8.33 per month. “We don’t have any future by working in the garment factory,” her colleague Abdul told researchers for War on Want in November 2006.¹³

With the minimum wage raised from £7 to £12 per month, factories have begun demoting workers, stifling protest, and searching for any way possible to reduce the wage bill.  For example, as War on Want’s researchers were told, unpaid overtime is a common way to reduce the wage bill:

But it’s not just Bangladesh.  Few garment workers earn enough to live the meaningful life that is their right, whether they are in Cambodia, Morocco, Sri Lanka or China.

In late 2006, nearly 500 garment workers in a Morocco factory supplying M&S, the UK’s biggest clothing brand, went on strike after their wages (a measly 70p per hour) were not paid on time.  All of them lost their jobs.¹⁴  In Sri Lanka, workers sewing school dresses for M&S gain just 10p of its £6 retail value.  “Almost daily our living costs are increasing and our wages are not enough for us to have a decent life,” said one in summer 2007.  “We work all week and yet we can’t afford the basic things that we need on our salaries.”¹⁵

In Mauritius – another country like Morocco that brands see as ‘low risk’ for exploitation – the Sunday Times reported that migrant workers in factories supplying UK brands earn as little as 22p to 40p per hour, when the average local wage is 55p.  One of them had supplied Sir Philip Green’s Topshop for the past ten years.¹⁶  “When I go to bed at the end of the day,” one woman told the paper, “I lay down and weep.”  Another explained the conditions in which they work:

China, the world’s biggest exporter of clothes, is busy producing merchandise for the 2008 Olympic Games.  Here again, at a factory producing bags with the Olympic logo, researchers for the Playfair 08 campaign found that workers were earning only a third of the legal minimum, despite working over 350 hours per month.¹⁷

In September 2007, a Guardian journalist in India spoke to workers in factories supplying Gap, H&M, Marks & Spencer, Matalan, Mothercare and Primark.¹⁸  “Wages barely covered their living expenses,” she wrote, “leaving them in debt and relying on government food handouts after unexpected bills. Many of them said they were under ‘intolerable’ pressure.”  Workers were earning £1.13 for a 9-hour day, less than half the local trade union’s estimate of a living wage.

These are not isolated cases.  Gleaned from right across the globe, they are testimonies to the systematic underpaying of tens of millions of garment workers.  Most workers expect nothing more than their legal rights, though they admit that this is often only half of what they really need for them and their families to live comfortably.  Indeed, women’s life decisions are shaped by their low incomes, and many go without marriage and children, which they dearly want, simply because they can’t afford it.
Ruby, who works in a Bangladeshi factory supplying a UK supermarket, told ActionAid earlier this year, “we can live, but we don’t have enough to save. In the future I want to buy land. In the future I want another child, but there is not enough money at the moment. I want to send my child to school, but I will have to earn enough money.”¹⁹

Living wages:  the facts

We used information from our local partners in-country to estimate the actual and living wages in some of the key countries supplying garments to the UK.  Our local partners are either trade unions or non-governmental organisations: in all cases, they are in day-to-day contact with workers, and have many years’ experience fighting for garment workers’ rights.  Many are former workers themselves.  Their estimates are based on this intimate knowledge of the garment industry and local conditions.
Average actual wages in the garment sector generally hover just above the legal minimum wage.  This means that most workers are earning more than the legal minimum, although it implies that some must actually be earning less.  However, average wages are always significantly lower – generally around half – than the living wage estimates from workers themselves (see Chart 1).  Of course living costs - and therefore salaries - are lower in developing countries than they are in the UK, but even in local terms, garment workers’ salaries are unacceptable.

Having gathered these figures, we can work out what it would be like to earn an equivalent wage in the UK.  Chart 2 uses a method called Purchasing Power Parity (PPP) to translate average wages in garment producing countries into UK salaries.  PPP compares the cost of living in each country, so it takes account of the fact that things are cheaper in developing countries.  It enables us to imagine that a family of four in the UK is living on the equivalent of a wage earned by, for example, a Bangladeshi garment worker.  We have compared this to the UK living wage estimate of trade union Unison.²¹  The PPP conversion rates are taken from the World Bank’s World Development Indicators.²²

Let’s take Vietnam as an example.  The prevailing wage for a garment worker in Vietnam is £25 per month, around 55% of a local living wage.  If we use PPP to ask what £25 for a person in Vietnam is equivalent to in the UK, we get a figure of just £151 per month, a meagre 11% of the UK living wage for a family of four.  Even the Vietnam living wage works out as just under £300, one-fifth of the UK living wage.  This shows that garment workers are not asking for much: they do not expect the same quality of living or lifestyle as we have from their salary.  They just want to be able to live decently. 

As workers have said on more than one occasion: if the brands think that we’re being paid a living wage, they should come here and try to live on it themselves.

Solutions

Workers’ own analysis of the situation usually points to three sets of people causing the problems: governments, factory managers, and brands.

It is much easier for the brands to enforce the legally defined minimum wage than the living wage, for which no agreed legal standard exists.  Yet governments in garment exporting countries systematically fix minimum wages that are much too low, because their main competitive edge in the global market is low wage costs.  Low minimum wages are a result of pressure from multinational brands, whether the brands make this pressure explicit or not.

Phearak used to be a garment worker in Cambodia, but for the last two years she has worked as a labour rights activist, spending most of her waking hours helping her friends to defend their rights.  “How can we survive when all we earn is £25 a month?” she asks.  She is incensed by the huge chunk of the final retail price that is taken by the brands, and then again by the amount the factory owners.  But as Cambodia braces itself for even greater competition from China and Vietnam , she says that workers must work harder just to stop their pay falling.

The global market is about to become even more competitive: in 2008, the temporary safeguard that allows World Trade Organisation members to restrict China’s textile exports – the last thing shielding other countries from its formidable industry – will end.  Brands will have even freer rein to source from wherever they want.  They use this power, quite deliberately, to pressure governments and manufacturers into a race to the bottom in which none can feel confident to set decent standards for working conditions.  Workers are well aware of this: the brands’ protests that quantifying a living wage is ‘oh so difficult’ ring hollow to them.

As for factory managers and suppliers, just like the brands and retailers who control the supply chain, they are businesses seeking to maximise profits.  Whether they are single-factory operations owned by local businessmen, or multinational conglomerates with turnovers exceeding those of the brands they supply, many factory owners manage to earn handsome incomes from garment manufacturing.  Factory managers’ claims that they genuinely want to pay their workers a living wage - if only the brands and retailers would pay them enough - therefore need to be treated with a pinch of salt.  

Yet they do have a point: the brands don’t factor a living wage into the prices they pay to suppliers, nor do they seek out suppliers who pay a living wage.  Instead, many place pressure on suppliers to cut costs wherever possible, which can translate into falling wages and conditions for workers.  “We’ve trimmed every cost that we can,” one retailer told us.

"When we negotiate with the factory owners they say they can’t increase salaries because they are getting a very low price from the buyers,” says one union leader in Sri Lanka. “The workers then get pressurised to hit higher targets to make up the losses suffered by the factory owner.”²³

So securing a living wage for workers requires a number of things from the brands: make sure you factor a living wage into your purchasing decisions and practices, giving suppliers the means and the confidence to raise wages; make sure they pass the benefits on to the workers, through collective bargaining and by effective monitoring and verification against a living wage standard; give governments the space and incentive to set decent minimum wages.