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Retailers slated over poverty wages

Labour rights campaigners have accused leading British retailers of trapping their overseas garment workers in poverty. In a report published by anti-poverty charity War on Want and NGO Labour Behind the Label, Asda and Matalan are accused of lacking any coherent strategy to ensure a living wage for people who make their clothes abroad. Nine other retailers come under fire for their “failure to undertake any real work towards a decent wage”: Bhs, Clarks, Debenhams, French Connection, John Lewis, River Island, Sainsbury’s, Tesco and the Arcadia Group, which includes the Burton, Dorothy Perkins, Evans, Miss Selfridge, Topman, Topshop and Wallis brands.

The report “Let’s Clean Up Fashion” marks the launch of a campaign this week to improve garment workers pay and conditions across Asia. The initiative is the work of the Asia Floor Wage Alliance, a coalition of unions and labour organisations spread across Asia, supported by trade unions, labour NGOs, anti-sweatshop movements, and scholars from Europe and the USA. As part of its campaign the Alliance is looking for retailers to sign up to the Asian Floor Wage, enter into a dialogue with the AFW alliance and adjust their pricing policies to absorb the cost of increased wages. It argues that wages normally only represent 0.5 -1.5% of the prices paid in the shop and should present no significant problem to the retailers.

In calculating the Asian Floor Wage the Alliance has put together a formula which they agreed should:

  • Provide enough for food costs and non food costs of a standard family of 2 adults and 2 children;

  • provide a food basket based on a standard calorific intake of 3,000 calories per adult, 1500 per child;

  • Provide a 50:50 ratio between food costs and of other non food costs such as clothing, housing and utilities, healthcare, social security, education, and savings; and

  • Ensure that the wage should be earned during each country’s legal maximum working week, though not above 48 hours.

To calculate a living wage the Alliance worked out the wage figure for each country, compared the figures between countries using purchasing power parity dollars, agreed an average regional figure (475 PPP$) and then  converted it back into local currencies.

Asia Floor Wage
Country Floor Wage Minimum Wage Floor Wage
£ Equivalent
Source: Labour Behind the Label/www.xe.com
Bangladesh 10,754 taka 1,662 taka 98
China 1,638.75 yuan 687 yuan 150
India 6,968.25 rupees 4,238 rupees 93
Indonesia 1,868,650 rupiah 972,604 rupiah 124
Sri Lanka 16,705.75 rupees 5,046 rupees 91
Thailand 7,566.75 baht 4,368 baht 141

Commenting on the report, Anna McMullen, from Labour Behind the Label, said: “Many companies fail to admit that the prices they place on clothing and their own buying practices are to blame for the poverty experienced by those who make our clothes. Global buyers have the power to threaten to relocate production in the search for ever-lower prices. The downward pressure on prices lead to poor wages and keeps garment workers in poverty.”

Many of the retailers have responded, critical of the report’s methodology and citing involvement with the Ethical Trading Initiative (Tesco, Sainsbury) or through in-house programmes (John Lewis, Arcadia Group). The highest marks for effort were given to Next, New Look, Monsoon and Gap, which were all graded three-and-a-half for their commitment; Marks & Spencer and Primark were also given credit for their work, both scoring three.


Let’s Clean Up Fashion >>

Asia Floor Wage Alliance >>

Ethical Trading Initiative >>

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