With a global apparel market valued at $3 trillion, the Center for Centre for Environment and Sustainability, at the University of Surrey, looked into whether workers are earning a livable wage.
Using the Western European clothing supply chain as a case study, the researchers wanted to test a standard as to the ‘fairness’ of that sector’s global supply chains.
“Our analysis provides a robust basis for arguing that BRIC pay in the Western European clothing supply chain is unfair,” the report concluded.
They analyzed garment industry wages in 2005 in the BRIC countries – Brazil, Russia, India and China. They found that garment workers get paid only around half of the ‘living wage’ – required to support a decent standard of living – as calculated by CES for each of the four countries, as reported by newsclick.com
To make things “fair”, researchers said that on average workers need to be paid an additional 35% over the living wage, which is measured by how much it takes to meet basic needs of a family of four to maintain a decent quality of life.
This additional 35% offsets the costs of income tax and social security.
Translated into dollars the group said it would cost an $10 billion to reach a ‘fair’ level of pay for BRIC workers in the Western European clothing supply chain. This figure is equal to almost double the cost of this labor in BRIC in 2005.
“This result supports the argument that substantial inequities persist in affluent country apparel supply chains and supports the more general argument that many developing country workers in global supply chains are treated unfairly,” the authors said.
The researchers offered some recommendations.
Although the focus of our application here was the Western European clothing supply chain, our results have broader implications. For example, we highlighted the need to consider multiple countries in living wage research and demonstrated how this could be done using living labor compensation in an input-output framework. Likewise, we argued that using living labor compensation strengthens the arguments about unfairness in clothing supply chains and suggested that by ignoring key elements of worker compensation, charities, and activist groups may undermine their own positions. Although such issues receive large amounts of attention in the context of clothing supply chains, they are common to most supply chains serving affluent countries. Consequently, the investigation of issues of fairness in global supply chains using the normative indicator approach outlined in this paper has implications for researchers and practitioners in multiple contexts.