How Garment Workers are Paying the Price in the Race to the Bottom
The retail industry is big business. In 2017 the global retail industry was estimated to be worth 23, 460 billion dollars and some of the world's richest have made their fortunes in the retail trade. Amancio Ortega (founder of Zara) Bernard Arnault (Chairman of LVMH Moët Hennessy Louis Vuitton) and Jeff Bezos (founder of Amazon) have all made their billions in the retail trade. In 2017, Amancio Ortega even temporarily took the top spot as the richest man in the world.
It is an industry which is globally worth billions, so why is it that some of the richest companies in the world are not paying their workers a living wage? A living wage after all, as stated in Article 23 of the Universal Declaration of Human Rights is a human right.
"Everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection."
A living wage should provide a worker with enough to cover all of their basic needs and the needs of their families. This includes the cost of housing, food, clothing, education, transport and healthcare.
In most countries, minimum wages are set by the government but they are not a living wage. Even in the UK, the minimum wage is estimated to fall a pound or two short of living wage estimates calculated by the Living Wage Foundation. However, in countries such as Bangladesh, Sri Lanka and Cambodia the minimum wages set by the government can be less than half that of a living wage.
Governments are reluctant to increase minimum wages in line with rising living costs due to fears that if they do, the big retailers will go elsewhere where labour is cheaper. This is particularly problematic for countries like Bangladesh where the garment sector is one of their largest employers and largely due to the attraction of cheap labour, they are currently the biggest exporter of apparel after China. Wage increases could spell disaster for their economy if the big retailers were to go elsewhere.
Competition is rife between countries and even within countries factories will compete with each other to get contracts, pushing down their prices to squeeze out the competition. But it is ultimately the garment workers themselves who pay the price.
In Bangladesh, garment workers often work 10-12 hour shifts and if deadlines are imminent this can rise to as much as 16-18 hours. They normally work 7 days a week with limited days off and face appalling conditions with abuse, sexual harassment and discrimination in the factories. Living conditions and nutrition are poor as garment workers struggle to provide for their most basic needs. Factory managers often take action to stop the workers from forming unions and they are under threat of losing their jobs and wages being docked if they take part in any union action.
At the beginning of this year, thousands of garment workers in Bangladesh took to the streets to strike over low wages. Following on from these protests, the IndustriALL Bangladesh Council estimates that 11,600 garment workers lost their jobs and employers and the police filed cases against over 3000 garment workers. Many face the threat of physical violence and have been arrested under false charges.
The big retailers make it incredibly difficult for these governments to do anything to change things as they exploit countries with limited economic options for financial gain. Competition between retailers and the retail environment intensifies the struggle, making it incredibly difficult for any one retailer to pay living wages without it damaging their business and deterring shoppers for whom cheap clothing has become the norm.
With retailers continuing to demand something for nothing, a real living wage for garment workers seems like an uphill struggle without a major overhaul of the fashion industry from top-down.