Calling Time on Poverty Pay: A Proposal for New EU Legislation on a Living Wage

In a ground-breaking proposal, The Circle, the global NGO founded by Annie Lennox, calls for new EU legislation to ensure garment workers in global supply chains are paid a living wage.

This week, The Circle launched its latest report: Fashion Focus – A Proposal for New EU Legislation on a Living Wage, calling for the first ever proposal for EU regulation specifically aimed at achieving a living wage. The report looks to suggest tangible change that can be implemented by both governments and factories to end the injustice of poverty wages suffered by millions within the global garment industry.

This morning, The Circle gathered together with some of the industry’s leading voices to detail the contents of the report. Opened by Livia Firth, the webinar put forward the central tenets of the proposal and included discussions between prominent speakers from the garment sector, international law and business and human rights discuss the proposal within the context of changes occurring within EU regulation.

The Circle have long been in search of a breakthrough around poverty wages and labour rights injustice in the global garment industry. The report follows the 2019 publication of Fashion Focus: Towards a Legal Framework for a Living Wage, in which existing EU regulations were examined as to how creating a precedent for a new living wage regulation. Now, as the fashion industry emerges from the global pandemic, Jessica Simor QC, author of the report, argues the need for a concrete legal solution in a ready-to-debate draft regulation. This comes off the back of the EU announcement for mandatory human rights due diligence legislation in 2021.

Earning some of the lowest wages in the world, the garment industry’s race to the bottom business structure comes as a result of a highly competitive market, with aggressive price negotiations consequently driving down workers’ wages. With the legal minimum wage in many of the world’s largest garment producing countries often falling as low as 50% less than that of its recommended living wage, many garment workers are left without the means for a basic decent life. In a report from The Clean Clothes Campaign in 2019, it was revealed that despite 85% of the top 20 clothing brands had committed to ensuring a living wage, not one could show that such had been put in place for garment producing countries.

As reiterated in this morning’s webinar, “we need the law to change the relationship between brands and consumers to ensure everyone in global supply chains are paid a living wage.” The industry’s currently weak regulatory environment has allowed for the evading of concrete action from some of the globe’s largest clothing producers. Though labour laws may be in place, many regulations remain unenforced and easy to avoid.

This lack of regulation makes it difficult for even the most ethical of companies to ensure the payment of living wage. For Jessica Simor QC, the report’s proposed legislation offers a solution to this. “Legislation is needed to address structural deficiencies in the market, which cannot be met merely by due diligence statements or voluntary agreements. If we are serious about protecting human rights and promoting sustainable development, then workers cannot be paid wages that do nothing more than sustain poverty.”

It is here that the report begins: proposing for the EU to build fairness into contracts and improve the lives of millions of garment workers around the world. Outlining the importance of a minimum wage sufficient enough to sustain a living wage, the report suggests the application of a formula to assess the “at risk wage point” – the point at which wages are too low to sustain a basic decent life. Following this, the country in agreement will be given a three-year transition period to allow for the gradual increase in statutory minimum wages. In the interim, however, The Circle aims to encourage factories to change their practices and pay their workers in accordance with the living wage. Accountability is key here, with real change on the ground as impactful as longer-term legislative change. Over time, the aim of such legislation will incentivise companies to produce garments in countries paying above the statutory minimum wage, consequently instigating a race to the top – rather than the bottom.

For Kalpona Akter, labour activist and founder of Bangladesh Center for Workers Solidarity, the turbulence felt throughout the garment industry resulting from the global pandemic cannot go ignored either. In her opening address at this morning’s webinar, Akter alluded to the payment of a living wage as a “shield for hard times”, evidencing the cancellation of large contracts as a result of the coronavirus outbreak. For millions of garment workers, the lack of employment protection left them without work and with no savings to fall back on. With almost 80% of the world’s garment workers being women, such actions have left them vulnerable, with little to support themselves and their families.

“Stories of this enormous toll have made headlines and what is starting to emerge more and more is the even larger system of greed and exploitation,” says Livia Firth, co-founder of The Circle and Eco-Age. The pandemic’s effects on global awareness are an optimism echoed by Raakhi Shah, CEO of The Circle: “The global pandemic has seen an increased appetite for change, and we are heartened to see the initiatives currently progressing at the EU that indicate considerable political will to regulate for both environmental and social abuses in global supply chains.”

The actions proposed in Fashion Focus – A Proposal for New EU Legislation on a Living Wage are a direct response to such injustices, intended to influence the EU’s post-pandemic recovery and the development of its due diligence proposals. “We hope that this proposal will influence the approach, and lead to a universal commitment to reverse the current race to the bottom regarding wages in the garment industry’s global supply chains,” comments Shah.

Read Fashion Focus – A Proposal for New EU Legislation on a Living Wage online here.