Building the movement for a living wage

03 Jan 2016 - Commentary

The annual Asia Floor Wage Alliance meeting held on December 17-20th at the Sri Lanka Foundation was a critical opportunity to bring activists together from across the region to discuss the pressing needs of garment workers. Participants arrived from over nine countries to highlight issues in an industry that provides clothing for much of the world, including for famous brands such as Gap, H&M, Marks and Spencer, Next, Inditex, and Adidas. While many of these brands are under increasing pressure to ensure that workers are treated with dignity as part of a global supply chain, the reality is that millions still work under difficult and often injurious conditions. The most extreme example is the collapse of the Rana Plaza in Bangladesh in 2013, resulting in over a thousand fatalities.

While not all workers in the region face such immediately deadly circumstances, they are often paid very low wages and encounter pressure from employers when they attempt to organise collectively. In order to address this situation, the organizers of the Asia Floor Wage Alliance proposed that a “living wage” is a workers’ basic right in the garment industry and beyond. In addition to covering the theoretical and technical aspects of wages, the conference also enabled participants to discuss practical issues facing labour organizers. There was much discussion about which brands to target, and how to formulate a strategy that can eventually shape the bargaining power of workers throughout the industry.

In terms of concrete steps, participants decided to use the Organisation for Economic Cooperation and Development’s Complaints Commission in order to ensure that Western brands and their suppliers comply with legal regulations in Asian countries. They also considered the ramifications of building a regional alliance for solidarity to promote the living wage, which can prevent a “race to the bottom.” Finally, in addition to the immediate decisions taken, there were many fruitful and stimulating conversations.These discussions raised important questions about the state of organizing in the garment industry in Asia despite persistent attempts by some managers and employers to harass workers and their unions.

Implementing the living wage

Participants grappled with mechanisms for establishing a living wage. Conference organisers suggested that the concept of Purchasing Power Parity is an important way for standardising measurement across countries, given differences in average per capita income and the varying cost of the basket of goods that a family needs to sustain itself. Activists also supported the idea of establishing a living wage by obtaining two to three per cent of the Free on Board price, which is paid by buyers in order to ship goods. This percentage could be contributed to a fund that would cover wage increases for workers, with minimal effect on mark up for the final consumer product. In addition, such a mechanism would ensure that brands are made responsible for workers’ conditions throughout the supply chain.

Stephanie Luce, a professor of Labour Studies at the City University of New York, offered a comprehensive assessment of different ways of measuring wages. She noted that in the US, for example, service workers are often paid so little by large employers that they rely on over US$7 billion of government subsidies because they are unable to sustain their families on a “poverty wage.” In the Asian context, there is also the question of how the living wage intersects with other proposals such as a national minimum wage.Currently in Sri Lanka the proposal is to establish a minimum wage of Rs. 10,000 ($71) a month. According to the Sri Lanka country presentation by Buddhima Padmasiri, the basic salary in the garment industry is Rs. 12,330 ($88) under the existing Wages Board and with the Budgetary Relief Allowance.

The living wage then must be seen as part of a larger workers’ struggle to achieve better living conditions in the garment industry and beyond.Workshop participants discussed the fact that there is a necessarily political component involving struggle between workers and employers in achieving a living wage. Activists discussed harassment and intimidation in factories when workers attempt to establish independent unions. While the International Labour Organisation core conventions guarantee the right to freedom of association, attempts to suppress independent workers organisations persist. Activists from all of the countries relayed case after case.

One participant from Bangladesh noted that over 20 workers were recently sacked in factories that supply to a major brand, in which the employer also happens to be the leader of the local factory owners’ association. In Sri Lanka, this past November in the Katunayake Free Trade Zone, management at a factory interdicted at least six workers and fired several for attempting to form a union. There is a pervasive culture of harassment of union organisers throughout the region, but evidence is often hard to collect. The creation of a database documenting incidents is greatly needed. Activists at the Asia Floor Wage Alliance discussed the need for more labour inspections and effective legal machinery that will implement laws already on the books.

Finally, conference participants addressed the changing conditions of work in the era of globalisation. They raised the twin issues of the fragmentation of the working class and the decline of representation in labour movements. With regard to fragmentation, participants noted increasingly predominant trends such as subcontracting and making use of informal employment outside Free Trade Zones which supply factories. The garment industry in Asia is itself a product of outsourcing and the fact that corporations have often taken advantage of degrading labour conditions.Moreover major brands and corporations disguise their effective power by relying on subsidiaries and outside suppliers while maintaining effective financial controlThe participants also discussed related trends in the decline of the labour movement and the changing representation of workers.

It is crucial to address women’s concerns in a context of persistent harassment and discrimination, which also affects their ability to participate in union activities. Participants critiqued the persistent assumption that women are homemakers and men industrial workers. Activists from countries such as India and Indonesia also noted the effects of rural to urban migration and the lack of spaces to interact outside the confines of the workplace and hostels. Finally, the labour movement must be seen in the context of the decline of Left parties, and the loss of an accompanying political vision for the working class.

A transnational campaign?

The question is, how effective were conference organisers in formulating the living wage as a human right? While activists and scholars brought significant research and experience to bear on this question, there are still issues with such a framing. How will the living wage be implemented as a transnational campaign? Unfortunately due to time constraints, there was less discussion about the relevance of different political traditions, or the limits and possibilities of various forms of collective organization. It is clear, however, that unions must be a key part of any wage campaign and will have to lead the fight, since they are, as one participant noted, the historical embodiment of workers’ collective agency.

There is also an issue with the technical framing of the living wage demand in terms of increasing aggregate demand. While there have been many critiques of the “Fordist” model in Western countries, it is still believed by many that the best way for Asia to advance is by increasing mass consumption and building a strong middle class. The problem though is that, as several of the speakers noted, inequality on a global scale is in fact dramatically increasing. French economist Thomas Piketty, for example, has argued that with the exception of the 1940s to 1970s, global inequality is zooming upwards. This again raises questions about the feasibility of the living wage in combating what is essentially a structural problem.

The concept of a living wage stimulated participants to think about the practical context of organising in their countries. This is part of a bigger conversation about the most effective way to empower workers. It is clear, however, that any such strategy cannot be pursued based only on wage increases, or even the creation of a wage fixing mechanism. Rather, it requires democratic control over the process of production. The issues that were described, regarding poor working conditions and low wages in the garment industry, are an effect of the basic fact that workers have little say over the goals of production. Thus, the ever-increasing, punishing production targets, and the more general political pressure workers face in their attempts to organise independently.

Nevertheless, the Asian Floor Wage Alliance meeting was a success in bringing activists together to conceptualise a living wage. The conference demonstrated the power of solidarity, fighting back against corporate attempts to exploit gaps in living standards and which encourage employers in Asian countries to compete against each other to pay the lowest wage, often times in the context of a captive labour market. It is hoped that the conversations that occurred on the margins, including comparisons between activists’ experiences, will further encourage the sustained probing of the causes behind exploitation in the garment industry.

This piece was published in the Sunday Times on 03 Jan 2016.