The garment industry is renowned for low wages, excessive overtime and poor working conditions. In spite of the fact that consumers are spending more and more on clothes, there are few signs of improvement for workers. In fact, the opposite is the case: downward pressure on wages means that many garment workers find their weekly wage packet is not enough to live on, in spite of the fact that they often work extremely long hours.
Several codes call for the payment of a "living wage". Many claim it is impossible to come up with a measurable standard for the living wage, or that wage levels should be determined through collective bargaining between trade unions and management.
In fact, there are a variety of techniques actually available to make at least a reasonable estimate of the range in which a living wage would fall, for example by using the "poverty line", the "purchasing power index", the so-called "market basket" approach, or a combination of these methods. Other benchmarks could include "best practice" negotiated wage levels elsewhere in the sector, or the wage levels called for by unions or labour-related groups active in the area.
The point about collective bargaining is certainly valid, but when no union is present in the workplace (which is the case in most garment industry workplaces), buyers should ensure that wage levels allow workers to live. This can of course be adjusted later when a collective bargaining process goes into effect. Expecting workers to live off of a wage that simply cannot be lived off of is unrealistic and seems to contradict any claims of "corporate social responsibility" made by buyers.
Unions and labour rights NGOs in Bangladesh have joined together in demanding that the basic monthly minimum wage for the country's 2 million garment workers be raised.
Background paper prepared by MIT (Harvard) US for the JO-IN project discussions: This memo was prepared by Gustavo Setrini under the supervision of Professor Richard Locke of MIT. This memo is intended as a background paper for the JO-IN project on various code issues. Download the paper in PDF format here.
This 2004 paper surveys various Multi-Stakeholder Initiatives on how they determine a living wage for apparel workers, and recommends clauses on wages to include in codes of conduct.