Better Brands, Better Production?
Ever since the tragedy of Rana Plaza, poor working conditions have increased in visibility. But do the huge labels really keep their fair production promises?
In some parts of Europe, garment workers earn less than their Asian counterparts – even if they work for big brands.
The 2013 Rana Plaza disaster near Dhaka in Bangladesh, where the collapse of a building containing several garment factories killed 1,129 people, was the worst tragedy in the history of the garment industry. In addition to horrific tragedies like these, there are widespread stories of workers – most of them women in Asian countries – labouring in slave-like conditions, earning appallingly little, and living in poverty despite working to the point of exhaustion for some of the biggest and most profitable Western fashion brands.
But stories of labour rights abuses in the garment industry are not confined to Asian countries. An innovative 2014 study by the Clean Clothes Campaign assessed the situation of garment workers right next-door, in 13 post-socialist European countries and Turkey. The report showed that making clothes in Europe – indeed, even inside the European Union – does not necessarily translate into better working conditions. Workers are paid poverty wages, which usually means the minimum legal wage, or even less. Overtime work is the norm, including work on Saturdays and on public holidays, and trade unions are weak and too often fail to demand or negotiate better conditions for workers.
EU member Romania has a monthly minimum legal wage of 1,250 Ron or 276 EUR pre-tax (that is less than in some parts of China, where the minimum wage is about 300 EUR). After taxes and social contributions, workers take home a monthly pay cheque of 800 RON or about 178 EUR. With overtime, they might earn around 1,000 RON or 222 EUR.
What they are earning now is only 19% of the living wage.
Before diving into the actual situation on the ground in Romania, it is worth taking a moment to examine the concept of a living wage. The CCC defines a living wage as enough to cover monthly expenses for three consumption units, where one consumption unit equals one adult or two children. So the consumption unit calculation is really an estimate for an average family, which can mean different things in different cases. Sometimes it might cover two adults and two children, sometimes two adults, one child and a sick dependant relative, or, quite frequently, a single mother and her family. A living wage should be enough to cover housing, transportation, education expenses, food, and also be enough so workers can save up to 10% of their wages for situations like family emergencies, times of unemployment, and so on. An estimated living wage for Romanian workers, for instance, would be around 700 EUR. What they are earning now is only 19% of that.
As a Clean Clothes Campaign researcher for Romania, my job is to interview workers in the garment and shoe industries and record their stories in our reports. I usually wait for workers at the factory entrance at the end of the workday, introduce myself, and initiate conversations. I sometimes travel to the villages where they live, knock their doors, and ask for an interview. But Romania’s weak trade unions and lack of worker protection also means that most people are terrified to speak to an outsider like me for fear of losing their jobs. They are not happy with their wages, but, as many explain, would be much less happy without any income at all. Only the most courageous and usually most frustrated workers open up and describe their situations. Even then, they prefer to remain anonymous.
Those who live in the countryside raise animals and grow their own vegetables.
One of these, Mariana (not her real name), had recently been released from the hospital after suffering symptoms of poisoning at her job in a shoe factory. She blames her medical problems on the glue she inhales every day at work. Mariana had to pay her own medical expenses from her already very small wage, since her health insurance didn’t cover her problem. But the most important issue, for her and many others, is that average wages are too low to cover basic expenses – even on months without additional medical costs. Most workers have one or two children and other family members to care for. They have to make hard choices between equally vital expenses, such as paying a utility bill or buying food for their family. They often borrow money from friends or relatives just to get by. One worker explained that when she runs out of money at the end of the month, the shop assistant sometimes agrees to give her a loaf or two of bread on credit with the promise of repayment on payday. Those who live in the countryside raise animals and grow their own vegetables, so they can cut food costs. Even so, many have a family member who takes on seasonal work in Germany, Poland or Italy – often illegally – to earn extra income from construction work or agriculture. This is seen by many as the only way out of the vicious cycle of poverty they feel trapped in. Similarly, workers give up their free time and take on overtime work at the factory to top up their incomes. When managers offer overtime work, few can refuse even if they wanted to, as this might damage their relationship to the managers. In two cases, I saw advertisements outside the factory exit encouraging workers to apply for emergency loans. These targeted ads clearly illustrate the widespread need for such emergency loans among workers. In fact, a majority have loans from banks and feel stuck in their jobs as they work just to repay what they owe.
H&M is now moving part of its production to Ethiopia.
These stories are all the more depressing because they are happening in our own backyard. Should we then collectively boycott all fashion brands until the situation improves? Probably not, as consumer boycotts would likely translate into lost jobs for workers. What workers want is to keep their jobs but get paid a fair wage. But there is no simple roadmap for achieving this.
Brands, governments, trade unions, factories, workers, and consumers all play a role.
Brands want to produce as cheaply as possible, but they are also interested in maintaining a good reputation. Their strength lies in their ability to relocate their production to somewhere cheaper at any time. For instance, H&M is now moving part of its production to Ethiopia, where the entry-level monthly salary in the textile industry is 32 to 37 EUR. Brands are not only the most mobile of all actors, and the ultimate beneficiaries of this status quo. They are also increasingly recognised as responsible for the entirety of their supply chain as, for instance, stated in the UN Guidelines for Business and Human Rights. We are already seeing some promising signs from a number of fashion brands that are moving in the right direction, but progress can and should be faster.
Contrary to common wisdom, governments are not always that powerful, certainly not in Eastern Europe. They struggle to attract and keep investors, and worry about raising their minimum wages for fear that companies might flee to cheaper countries. They are also limited in their ability to raise minimum wages by conditions set by international financial institutions. To illustrate this point, consider that in 2010, Romania cut the wages of civil servants by 25% while increasing VAT by 5% after obtaining a USD 20 billion rescue loan from the IMF a year earlier.
Like the government, factories struggle to attract Western brands. To do so, they need to offer low prices and fast work.
…transition from passive buyers to critical consumers
Workers, therefore, carry the burden of the entire system. The trade unions, who should in theory be their advocates and push for better working conditions, rarely demand higher wages, much less a living wage. In Romania, the power of trade unions was further diminished when a new social dialogue law came into force in 2013, making it far more difficult for workers to organise.
The media also play a role, and their actions – exposing working conditions in the global supply chain, for instance – can increase public pressure on brands.
On an individual level, our power as consumers may lie in transitioning from passive buyers to critical consumers. A critical consumer is someone who asks the shop assistant in a major brand store about the conditions under which their clothes are produced. A critical consumer uses his or her voice on social media to raise awareness of these topics. A critical consumer signs petitions, supports organisations in their work and, when possible, donates to such causes.
We must create the kind of pressure that makes it impossible for brands to take advantage of workers anywhere in the world, whether in Asia or in Europe, and force them to ensure their workforces can live decent lives.