Stirling Smith, ETI trainer and blogger, tried on some new yoga pants. Then he wondered who produced them and where they were made.
Earlier this year, I took up yoga. My wife thought that the kit I was wearing to the classes made me look very scruffy and was frightening the other participants. So, for my recent birthday, she bought me some new yoga pants. Sold by a major UK high-street company and ETI member.
Naturally, suffering as I do from what Rudyard Kipling called 'satiable curiosity, I looked at the label and saw they were made in Bangladesh.
Of course, my wife had removed the price, but I went online and found that they would have cost about £25.
Then I tried to find out what they might have cost the company. A few minutes on the internet and you can find plenty of companies offering to supply you different yoga pants for just a few dollars, with minimum orders of just a few hundred.
But let’s say the price the retailer paid to the supplier in Bangladesh was £8 - probably considerably less.
That’s quite a margin.
And the reason this research is topical is the recent announcement by the government of Bangladesh that the minimum wages for garment workers are to be increased.
I stress wages, rather than a minimum wage, because the minimum wage rates depend upon the worker’s grade. The lowest graded worker, a helper receives 8,000 Taka a month. But it is important to note that Tk 4,100 of this is the basic wage. Another Tk 2,050 is supposed to cover housing; Tk 600 medical costs, and Tk 350 is for “conveyance” - that's public transport to and from work. Finally, 900 Taka is for food. The basic wage increases for each grade, but the additional allowances etc remain the same.
Just in case you don’t carry the exchange rate in your head, Tk 8,000 is a little bit more than £70. That’s three yoga pants. Per month.
As part of the national negotiating process currently taking place, trade unions have been asking for Tk 16,000 per month, which is close to the figure that the Global Living Wage Coalition has worked out.
They have used the Anker methodology, which carefully calculates the cost of basic items. An example: bananas are the cheapest fruit, year-round in Bangladesh, so they use the cost of a kilo of bananas, not other fruits.
But get this. Two thirds of the Iiving wage - 11,000 Taka - is the cost of housing. Even Generation Rent in London don't have to pay that much of their income on housing. Yet the Bangladesh government is allowing 2,050 Taka for housing - less than one fifth of what is required.
Housing for garment workers is incredibly expensive in Dhaka, so how do workers manage with the very small minimum wage?
Workers have two strategies:
- They live in overcrowded insanitary slums and travel long distances to work on overcrowded buses. 94% of women on those buses are groped, leered at and worse.
- The second strategy is to work humongous hours of overtime. According to a new report, half of all workers studied were regularly working more than 60 hours a week.
Remember that the next time you hear Bangladesh industry representatives tell you that the sector is “fully compliant”.
Who benefits from the minimum wage increase?
This increase in the minimum wage is being presented as a 50 per cent uplift. Does this mean that workers will receive a 50% increase in their pay?
That’s very unlikely. As I suggested in my blog the last time the minimum wage was increased in 2013, there are quite a few dodges that factories will use to reduce the salary bill.
Workers might be put on a lower grade than they should be. In the UK, the trade union representative would put a case to management, or even lodge a formal grievance, if a worker was placed in a grade lower than they should be.
But in the absence of trained union representatives - which is the case in pretty much every Bangladesh factory - then that is not going to happen.
Another strategy is to roll up different allowances into the basic wage.
But, as last time, the main beneficiaries of an increase in the minimum wage rate will be slum landlords, transport operators and shopkeeper selling workers their essential supplies.
Not that I am making an argument against increasing the minimum wages.
Rather, as I have proposed before, these essential services should be made available on a no profit no loss basis, through co-operatives, as the ILO used to suggest, before it forgot its own history.
What can brands do?
I deliberately haven’t mentioned the shop where my wife bought those yoga pants. Because every UK retailer behaves the same.
And I quite accept that the UK retailer can’t pay a living wage by increasing the prices it pays to a supplier. That’s not going to work.
In the long run, what is needed is sustained internal and external pressure on the Bangladesh government and the industry to push up the minimum wage, to let workers organise freely, and to provide cheap, safe and effective public services.
However, in the short term, brands could look at ways to set up no profit/no loss stores on factory premises to provide workers with basic commodities at reasonable prices. They could also look at providing safe transport - remember that figure of 94% of women being harassed on public transport. And they could pool resources and investigate the options for social housing for garment workers.
Additionally, they could enrol their supplier factories into the Joint ETI training programmes, which seek to bring together managers and workers to try to find constructive solutions to the problems faced at factory level.
Meanwhile, I’ll lie on the mat at the end of my yoga classes and try not to think about the price of my yoga pants. My yoga teacher says I shouldn’t let external concerns distract me from relaxing!
As part of ETI’s 20th anniversary conference on responsible supply chains, being run on 31 October and 1 November in conjunction with business risks solution provider Elevate, there will be a session on paying living wages. Delegates will hear from Evelyn Astor of the ITUC, Frank Hoffer of ACT and Linda Ingolfsdottir of H&M. They will help delegates examine the barriers preventing companies from adopting living wages, explore how progress can be made and discuss how companies can join active living wage initiatives.