Our response to joint announcement on living wages by German retailers

ETI applauds the joint agreement by leading German retail companies to promote living wages and incomes in the agricultural supply chains of their own-brand products. 

The pledge to embed understanding of the importance of living wages and salaries at all levels of the company, and incorporate as a long-term goal within the sustainability policies of the signatory companies, sends an important signal to all retailers about the importance of harnessing senior-level buy in, and advocating for new business models where workers are recognised as a key part of the value chain.

ETI also welcomes the ambitious goal of improving the lives of workers at the beginning of the global supply chain, at a time when even some big-name global retailers are at still at the stage of only mapping the first tier. Transparency and openness are key steps towards fairness and equality, and a human rights due diligence approach, which involves cooperation and dialogue with all local and international actors, is the best way of achieving longstanding, sustainable change.  

ETI encourages its members to work with trade unions to achieve negotiated wages, and to form sectoral agreements, as these have been shown to be the most effective way of ensuring sustainable living wage agreements and a level industry playing field. They are also a proven means of avoiding the significant risks that ad hoc action by individual retailers can lead to: wage disparities; conflicts between workers and companies; and the undermining of trade unions and collective bargaining agreements in the workplace. 

There will be many challenges along the way – not least of which will be developing a credible reporting system for supply chains which are likely to include large numbers of subcontracted, undocumented or migrant workers, for example. 

We will be observing year-on-year progress with interest, and working with our retail members to determine whether a similar approach might work in the UK.