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Fair Wear Foundation Outlines “Dos and Don’ts” of Paying Living Wages

Chasing cheap labor has been the way of the apparel manufacturing industry, and the wages some workers are paid aren’t even enough to sustain a simple living.

Now organizations are bandying about the notion of a living wage, which generally means the worker gets paid enough to sustain a “decent” living—a definition very much open to debate.

Some organizations, like Fair Wear Foundation, which works with companies and factories to improve labor conditions for garment workers, are working to outline a way forward for brands to pay that fair living wage.

“Calls for collaboration between brands on increasing prices at their suppliers often set off alarm bells with garment brands´ legal teams,” Fair Wear said in a statement. So to help eliminate this obstacle, the organization enlisted the expertise of competition specialists at Arnold & Porter law firm.

Essentially, brands that source from the same factory would need to collaborate in order to raise wages, Fair Wear explained. And “serious concerns about potential violations of competition law have served as a roadblock to such collaboration. Wages are a cost of production, and brands are well aware that discussing production costs could be perceived as colluding the price.”

If a living wage project includes any talk of financial details, even if the total price each brand paid to the factory is never mentioned, brands aren’t likely to participate, Fair Wear director Erica van Doorn said. “They cite competition law risks as a major impediment. We hope to turn this around by clearly guiding them in what they can and can´t mention while discussing production costs,” she said.

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Competition law concerns are among the nine obstacles inhibiting real progress on wages, according to the organization.

In its Do’s and Don’ts guidance, Fair Wear outlines things that are safe for brands to discuss with factories, like calculation of the labor minute price and other labor conditions in the factory, as well as things that aren’t safe for brands to talk about with factories, like wage levels or other employment rights and factory overheads or other production employment costs.

Fair Wear Foundation also launched its Living Wage Portal in April, a platform designed to help brands and retailers overcome the obstacles that prevent garment workers from earning a living wage and share their progress and lessons on how to pay them more in a sustainable way.

Anne Lally, Fair Wear’s advisor on living wages said, “This legal guidance represents a huge step forward for all of us working on living wages for garment workers.” She added, “It ensures that we now know the rules of the game. And what’s clear is that there is a lot of space to maneuver.”