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How much money does it take to live a decent life? For garment workers, the answer is often far more than what they are paid.
To commemorate the 10th anniversary of the Rana Plaza factory collapse — which exposed not just the unsafe conditions many garment workers are forced to endure, but also the power imbalances underpinning fashion supply chains — the Union of Concerned Researchers in Fashion (UCRF) is calling on the industry to rethink its pricing models with workers at the centre. Academics Lynda Grose and Kate Fletcher, who are leading the project, say it could prompt a massive shift in brand-supplier-worker relationships and unlock bigger conversations about just transition and decolonisation.
The fashion industry is a long way from worker-centric pricing. According to the 2022 Fashion Transparency Index from advocacy organisation Fashion Revolution, 96 per cent of brands do not disclose the number of workers currently paid a living wage, and only 27 per cent have a public strategy for achieving living wages throughout their supply chains. That’s despite a legislative push to guarantee living wages for garment workers, including Senate Bill 62, which affects brands producing in California. Experts say the biggest barrier is cost: brands are reluctant to sacrifice profits to increase worker wages, while most suppliers have been rendered unable to invest in this by a decades-long race to the bottom, in which brands have pitted suppliers against each other to produce more, faster and cheaper.
Inviting workers to not only negotiate, but determine their own pay would be a fundamental shift in how fashion has historically operated, admits Grose, who worked as a designer for fashion brands for more than 40 years. “You might be in the factory with workers to demonstrate a finish or correct a sample, but you never have the conversation about pay. Brands have a target price, which comes from production and sales, dictating what fabrics, trims and construction methods you use — maybe you can bring the price down by using a single needle instead of a double needle, having three inches less fabric in the hem, or adjusting the pattern to take up less yardage — but the workers are never involved. This would mean shifting the power structure.”
UCRF has developed a tool for worker-centric pricing, which would build localised and self-determined living wages into the contracts between brands and their suppliers. This is largely based on the work Grose has done with Aid to Artisans — an off-shoot of Washington-based non-profit Creative Learning — as a way to help artisans across the world build their own microenterprises and preserve local crafts. “Many of the artisans haven’t run businesses before, so this is how you figure out their pricing with them,” says Grose. Applying the tool to other garment worker groups was a “leap of imagination” from conversations with activists and students. “This tool has been tried and tested with artisans and has worked well for many decades. Why can’t it be applied to other situations in the fashion industry?”
The proposed tool raises a number of questions. Who would pay for it? Would brands have to fund the change from their profit margins or pass the cost on to consumers, or would responsibility fall on suppliers? How could suppliers guarantee that higher wages wouldn’t mean harsher production quotas and a quicker pace? How would worker-centric pricing differ for workers in company housing, whose rent and food is often taken out of their wages? How would you ensure strong communication between workers and their employers in an often opaque and fragmented supply chain where harassment and union-busting are rife?
Right now, the tool is intended as a provocation to the industry, says Grose. How it evolves and is applied is open to interpretation, especially because the concept of a living wage is so context-specific: it depends on where you live and how you earn, who you have to provide for and what you consider to be a reasonable quality of life.
No copy-and-paste solution
It might eventually be possible for researchers to normalise the data across particular factories or regions, says Grose, but globalised data will never be best practice because it ignores local variations in infrastructure and the cost of living. “Fair wages need to be hyper-local to cover essential needs, but also enable people to save and pay for medical costs, emergencies and education,” explains Aid to Artisans’s training director Lauren Barkume, pointing to the World Fair Trade Organization’s localised wage setting tool as another useful resource.
In order to get accurate information about their garment workers, brands can collaborate with non-profit organisations local to their supply chain facilities, to create spaces where workers are not only represented, but feel safe to voice their opinions. To make the process more straightforward, UCRF has developed a downloadable Word document, which walks participants through the process of setting worker-centric pricing, and invites them to share their findings on this UCRF Google Doc.
The downloadable exercise starts with collating data from garment workers about their essential weekly living expenses, working in local currency. It suggests covering food, rent, clothing, utilities, transport, lessons and medical expenses as a minimum, acknowledging that different geographies and contexts will have different variables. Participants are then asked to gather information about the number of hours that garment workers are available for paid work each week. These two figures are then used to calculate an hourly rate, which would be included in line sheets as a non-negotiable figure. This would require brand-side staff negotiating with suppliers to see labour as a set price, rather than something to be bartered down.
Footwear company Nisolo says it uses third-party wage research from MIT, WageIndicator and Trading Economics, as well as family living wage benchmarks from the Global Living Wage Coalition in the countries it operates in, and worker-informed regional studies as a baseline to assess wages. In its owned factory in Trujillo, Peru, wages were set based on worker surveys, local cost-of-living data and industry living wage standards, explains Emily Olivieri, SVP of product creation and manufacturing. “We found that the regional, factory-specific living wage was slightly higher than the international standards, and quickly increased our workers’ wages to account for the discrepancy.” It’s important to maintain close relationships with suppliers to know how economic fluctuations are affecting the local standard of living, she continues.
Yavuzçehre Tekstil, a Tier 1 finished garment manufacturer in Türkiye, has been iterating on a similar model since one of its main clients — a fast fashion giant — signed an international living wage commitment five years ago. It previously paid the national minimum wage, with some differentiation for entry-level, mid-level and senior workers, the latter receiving an additional TRY 500 (around £20) per month to recognise their loyalty, skills and performance.
Initially, the brand suggested that Yavuzçehre Tekstil evaluate workers’ pay based on the number of items they produced and the amount of machines they were trained to use. Ekin Uluışık, the sustainability manager at Yavuzçehre Tekstil, says this wasn’t fair, because there were workers who excelled but specialised in using just one machine. In another iteration, the manufacturer installed automated systems to track productivity throughout the assembly line, but this didn’t track quality or defect rates, so a quality assurance team was added to audit this. It also couldn’t reward the workers who didn’t use machinery, so their line managers were asked to evaluate their performance instead, but this brought the risk of personal bias, which led to workers completing self-evaluations as a comparison point.
After years of piloting and pivoting, Yavuzçehre Tekstil reframed the conversation. Uluışık set up a trial assembly line, and asked workers to perform — not to test their contributions, but to assess what support they might need to help them progress and improve their skills. As a result, some workers were promoted and their wages adjusted, while others received additional training (and were paid overtime for the hours allocated to this). Now, wages reflect loyalty to the company, performance, seniority and quality, as well as whether certain roles have associated health risks (from standing up for long periods or carrying heavy loads, for example). “The language was all about helping the workers, which meant efficiency was an organic outcome,” says Uluışık. In five years, the average worker wage at Yavuzçehre Tekstil (including its subcontractors) has increased by 20-25 per cent.
Shifting the power imbalance
Legislative and financial incentives are crucial so that players increasing their costs by implementing worker-centric wages can compete while their peers continue to drive down wages and chase ever-higher profit margins.
Uluışık says Yavuzçehre Tekstil’s fast fashion client was clear from the outset that increased worker wages — while mandated by the brand — would not result in higher prices paid to the manufacturer, meaning the supply chain bore the cost for mitigating the brand’s reputational risk. Yavuzçehre Tekstil doesn’t want to pass this burden on to its subcontractors, so it pays them an additional seven per cent for following its new wage protocol. This erodes Yavuzçehre Tekstil’s already tight profit margins, but Uluışık believes it is the right thing to do.
Part of the problem is that the sustainability certifications that often prompt brands to demand better wage management systems do not reward suppliers that are trying to build a better pricing model over those doing the bare minimum, says Uluışık. Increasingly, suppliers are looking for ways to circumvent the brands that do not value these improvements, Uluışık adds.
Grose suggests that a cross-industry collaboration might be needed to ease the burden on squeezed suppliers, even if that seems unrealistic in the current system. “The tool shines a light on the way things are, and how far we are from where we want to be,” says Grose. “The fact that it’s hard to imagine shows just how unbalanced the power structure is right now. If workers were at the table discussing these things and advocating for themselves, it could be a tipping point for real change.”
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