We get asked about Living Wage all the time. We recognise that our mission and vision is focused on improving menstrual hygiene management but as we are uniquely exposed to the garment industry and our team has a background in fashion & economics, we understand why we get asked about the Living Wage!
Firstly, let’s start at the beginning. What is the Living Wage?
A living wage can be defined as the minimum income necessary for a worker to meet their basic needs. We agree wholeheartedly that every person who works full time should earn enough to meet their basic needs. In fact, we are Living Wage accredited in New Zealand, that’s how much we believe in the principle of people being paid sufficiently.
How do you determine Living Wage?
Here’s where it gets tricky. What is considered a basic need? Everyone has a different perspective and viewpoint on what a ‘need’ actually constitutes and how do you define that level in monetary terms. In New Zealand it’s independently calculated by the Family Centre based on numbers from Statistics New Zealand.
In places like Bangladesh, the benchmarks and methodologies are harder to be determined when statistics are less transparent. The most popular methodologies include Anker (used by Global Living Wage Coalition) and Asia Floor Wage Alliance. A counter argument to these methodologies is that the Living Wage cannot be above GDP per capita. Basically, the entire revenue a nation generates is divided by the population.
According to the World Bank, the GDP per capita in Bangladesh is US$2,457.92 annually and Anker suggests the Living Wage is US$2,688 annually. This means that Bangladesh earns below the Living Wage and according to free markets, the cost of living would naturally also reflect this. And traditionally, economists often argue that minimum wage (and/or living wage) mandates can lead to an increase in unemployment.
Okay, we’re going deep into the intersection of politics, economics and quite honestly, how you determine Living Wage is a philosophical issue, depending on where you land with capitalism.
One of the major reasons The Living Wage has not progressed in Bangladesh is due to the government minimum wage for garment workers. Many factory owners see this as the standard and as they are the legal employer of garment workers, there’s a lack of transparency as to whether increased payments by brands would legitimately lead to wages of workers. A lack of enforcement and/or corrupt officials has also contributed to minimum wages not often being paid.
A few things are really important to note here:
The government does not rank highly on the transparency index ranking at 147/180 countries and it’s important to note that a significant number of politicians own garment factories. So perhaps, it could be in their best interest to keep wages low. We recently (December 2022) met with the Ethical Trading Initiative in Dhaka and asked them about the realistic possibility of seeing Living Wage come to fruition in Bangladesh and their response is not hopeful for the foreseeable future due to the failings in the current government.
There are other major industries in Bangladesh. The garment industry is not the only work that is available. Changing wages for one industry will impact other industries. We’ll come back to this point later and address some unintended consequences.
- Each factory works for multiple brands all at once but workers only work on the line for a specific brand. Worker A, let’s call her Romana. She is trained to work on H&M’s line because they have specific requirements around the quality and detailing, while she works at this factory, she will not switch to working for Primark. If H&M decided to pay Living Wage, what happens to her colleagues who are sitting on the next line over working for Primark? This level of inequality would cause massive problems in the factory and likely result in a protest, which could easily lead to other factories protesting. It would be important for the factory and brands to collaborate together to all pay a living wage. But businesses are not generally speaking that collaboratively. Brands also switch between factories on a regular basis, making this collaborative effort even more challenging.
~ Just a quick pro tip to spot greenwashing! Not a single brand/company in Bangladesh pays Living Wage. But many brands such as ASOS, H&M, Primark etc are members of The Ethical Trading Initiative (ETI) and one of the codes of members is to pay Living Wage. So they may advertise this code. But there’s no mechanism to distinguish between what they agree to do and what they can do.~
Singular Industry Focus
A real challenge with Living Wage is the singular focus on one industry in the country. For example, if Chinese consumers demanded that NZ dairy farmers were to pay all their staff the Living Wage, how would New Zealanders respond who work in the Tourism sector that weren’t receiving Living Wage?
Advocates for The Living Wage, will often focus on the Garment Sector but there is a need to advocate for the entire country, across all industries. Particularly, industries that don’t have a western-consumer lens because it begs the question, who will ever advocate for them? Unfortunately, there are lower paying jobs and more dangerous jobs in Bangladesh, for example; ship breaking. And if the wages were to significantly increase for the Garment Sector, men who in more dangerous industries like Ship Breaking, would see working in the factories as more desirable.
One of the most recent impacts from both Covid and wage hikes in the garment sector in Bangladesh, is seeing the influx of men. For years, 80% of garment workers in Bangladesh have been female. In recent years, this has reportedly dropped to 60% as automation and wage hikes have come in. It’s deeply concerning for women in Bangladesh to be losing their livelihoods and to be given less opportunities for safe work.
Benefits Beyond Wages
Lastly, while we cannot see Living Wage being able to be implemented in the foreseeable future, we advocate for benefits beyond wages.
We celebrate when brands focus on investing in issues that bring worker issues front and centre. Such as health, and in our case, menstrual health, food and nutrition, financial literacy and other investments that support the wider family. One of the reasons we are such strong advocates for menstrual health support is because it is a commonly asked for item by workers. Many trade unions ask factories to supply disposable pads for their period, as it’s an ongoing cost and a simple intervention to empower workers for their day to day lives.
We know that the realities are complex, deeply nuanced and we are waiting eagerly to celebrate people everywhere receiving the Living Wage for their work. In the meantime we see considered and practical solutions, such as genuinely investing in workers can contribute to a solution that bypasses government and industry-wide obstacles.