A living wage is a human right, and Continental Clothing, for one, wants its workers to get their deserved share. Together with BSD Consulting and Switzerland’s Fair Fashion Network, the London-based apparel manufacturer and wholesaler is launching “Fair Share,” a line of certified-organic T-shirts and hoodies with a built-in price premium. Much like a fair trade premium benefits farmers, this ring-fenced sum will go directly to garment workers in India. Mariusz Stochaj, head of product and sustainability at Continental Clothing, explained it thus: “The price premium of 10p (16 cents) per T-shirt and 54p (79 cents) per hoody is passed along the value chain, from the factory through to the retailer without being marked up, ensuring that the small additional cost at the point of sale is returned to the workers in its entirety,” he wrote in a post on LinkedIn.
The “Fair Share” committee said it worked with workers’ representatives and local stakeholders to determine the financial requirements of a family of four living in India’s Tirupur area.
Contrary to the government-mandated minimum wage of 285 rupees ($4.24) per eight-hour shift, the project found that the lowest-paid workers should receive at least 466 rupees ($6.93) per shift to sustain themselves in terms of basic needs, such as food, housing, clothing, education, and transport.
The new benchmark allowed Continental Clothing to calculate how much more a garment had to cost to make up for the shortfall.
Still, because only a fraction of the factory’s workers are currently involved in making “Fair Share,” not everyone will receive the premium—at least, not yet.
“The project so far only takes around 10 percent of the factory’s production capacity, so for now everyone receives extra 650 rupees,” Stochaj said. “This is not a living wage yet, but if the project is received well in the marketplace and extended as planned, every worker will get at least the living wage.”
But Continental Clothing also decided that its entire workforce, and not only those actively involved in the “Fair Share” line, deserved a raise. In January, the company increased all wages by up to 50 percent. Unlike the premium, this wasn’t a bonus perk.
“The initial orders in the first year would not generate sufficient funds to reach the target living wage level in full, and therefore it was agreed that the available funds should be shared equally amongst all the workers through the pay grades, even if some top earners were already above that level,” Stochaj said. “Giving every worker the same net increase was acceptable to all parties, and it was deemed as an equitable way of distributing the funds. In effect, it means the lowest earners would receive the highest increase in percentage terms.”
Plus, Continental Clothing said it will maintain its additional monthly wage payment—regardless of the volume of future orders—for as long as it has a business relationship with the factory.
“The longer-term aim of this project is to reach the full living wage for all workers by covering 100 percent of the factory’s production within the scheme,” Stochaj said, before noting that the project is subject to regular audits from the third-party Fair Wear Foundation. “This objective, however, will depend on the response from the market and the willingness of the retailers and consumers to pay the additional premium.”
Time will tell if this is a model other brands should emulate. But it’s a start and a hopeful one at that.