Regulating the ‘Wage Effort Bargain’ in Outsourced Apparel Production: Towards a Model

Abstract

In recent years efforts to address the vexed issue of wages in global apparel supply chains have been characterized by some interesting conceptual shifts and realizations. In acknowledging that on wages ‘the needle has not moved very much’ (FLA 2010: 4), the Board of the Fair Labor Association (FLA) recently endorsed an amendment to the compensation standard in their Code bringing their member companies (some of which also participate in the Better Work programme) nearer to committing to the notion of a ‘living wage’ as found in other multi-stakeholder initiatives, notably the Ethical Trading Initiative and Social Accountability International.² Significantly, this has been accompanied by the endorsement of a redefinition of the overall ‘wages issue’ into a more dynamic, multi-dimensional ‘fair wages’ concept in which questions of disparity, equality and broader social protection must also be considered (Vaughan-Whitehead 2010; Chapter 3 in this volume). This more sophisticated understanding and concomitant auditing methodology which the notion of ‘fair wages’ brings to our understanding, and its potential for the regulation of wages in the apparel supply chain have to be welcomed. However, from what we know about the reality of outsourced apparel manufacture, three dimensions of wages continue to remain axiomatic in the context of the current crisis: the failure to pay prevailing wages on time and in full; the absence in many countries of a basic wage sufficient to meet basic needs and allow for discretionary expenditure; and the persistence of unrealistic production targets revealed in non-compliances in relation to excessive and often unpaid overtime and verbal and physical abuse of workers (Vaughan-Whitehead 2010; Bobo 2008; Bernhardt et al.

The author wishes to thank ActionAid UK for providing financial assistance to undertake the preliminary research for the original (unpublished) discussion paper. I am grateful to GSD Corporate Ltd., in particular the managing director Paul Timson and operations manager John Dutton, for their assistance and data on SMVs on particular garments, which were invaluable in developing the model. Thanks are also due to Mike Flanagan of Clothesource who provided data on import prices and trends into the European Union (EU) on selected garment categories, and provided critical comments on the draft. The author would also like to thank the following individuals for their assistance: David Birnbaum, Jean Jenkins, Sean Chiles, Razaul Karim Bhuiyan, Auret van Heerden, Andre Kriel, Steve Grinter, Hans Wettengl, Ken Loo, Derek Boyden, Derek Cattell, Edgar Romney and those company representatives who provided information on their costing practices.