How can we regulate the living wage in the UK garment sector?

By Johanna Ramaer

The Brexit transition period officially began on Friday at 11pm, with a mixture of joy or sadness depending on which side of the 48:52 divide you sit. Negotiations on trade deals will be the theme of the coming months to determine the future of the UK-EU relationship and our new identity on the global stage. The fashion industry is one of many industries that will be vastly affected by this new relationship. International supply chains predicate that its international agreements shape how this industry is regulated. Regulation is crucial considering the industry’s fierce competition that pushes labour conditions down to their very minimum. 

According to a 2019 report by the University of Sheffield, low pay continues to be the status-quo in the garment sector. Such worrying findings ask for a strong international regulation that legally obliges companies to guarantee a living wage across their supply chain. However, what such a regulation will look like for the UK, is likely to change now that they are leaving the EU. Much of the debate about how to regulate the fashion industry effectively is happening at the EU level. In October 2016, for example, the European Parliament adopted the Report on corporate liability for serious human rights abuses in third countries. It calls on the EU and Member States to lay down binding and enforceable rules setting out that companies must respect human rights throughout their operations by establishing mandatory human rights due diligence.

The UK, however, has also shown leadership with regards to human rights and business. They were the first state to implement the United Nations Guiding Principles on Business and Human Rights by publishing a National Action Plan. Unfortunately, a report by the Joint Committee on Human Rights demonstrates the plan’s modest scope and lack of new commitments. But it does indicate that the UK can show leadership when it comes to regulating human rights within the fashion industry. Leaving the EU should not be an excuse to not continue with regulating human rights abuses. Regulation is especially necessary to effectively guarantee a Living Wage within the fashion industry. The UK living wage is currently £9,30 per hour, a calculation that is based on the essential goods and services that are needed to give a family a basic but acceptable standard of living in the UK. Living wages vary per country as it depends on the local prices of goods and services. Global Living Wage Coalition has designed a methodology to calculate a living wage for every country.

The problem with guaranteeing a Living Wage is twofold. Firstly, there is an absence of a universal definition of a living wage. And secondly, there is no legal obligation to guarantee a Living Wage. The Tailored Wages report has demonstrated that corporate social responsibility initiatives have very little or no impact on the improvement of living wages because of their non-binding nature. Nonetheless, there has been one law, the French corporate duty of vigilance law, that has been effective in setting a legal mandate for corporate responsibility. This law, however, still has the other problem of not setting a universal definition of a Living Wage; it only refers to human rights in general. Thus, in order for a law like the French Corporate Duty of Vigilance law to effectively guarantee the right to a living wage it should include explicit referral of the right to a living wage and what that exactly entails. Nonetheless, the French Corporate Duty of Vigilance law is a good example of a EU member state laying down binding and enforceable rules setting out that companies must respect human rights throughout their supply chains without needing the EU.

Now that the UK is set to leave the EU and will no longer be part of the developments happening at the EU level, it has the opportunity to show leadership and set an example for other countries. This could be done through enforcing a law similar to the French law in order to guarantee a living wage within the fashion industry. Such a regulation is very important because it has the potential to decrease the number of people in work poverty. This could, in turn, boost the world economy as low paid workers cannot save very much and/or afford many goods.

Fashion Roundtable members can read the full policy update here