FAIR SHARE project to pay living wages to garment workers
Continental Clothing Co. – in collaboration with BSD Consulting and the Fair Fashion Network – has implemented a scheme that aims to deliver a LIVING WAGE for the garment workers in its supply chain. The costs for doing this are only 0.14 Euro per T-Shirt. From 1.1.2016 the monthly salary will be increased by 650 INR per month for every worker in the factory. Continental Clothing hopes to be able to soon up-scale the project.
In its pilot phase, working closely with the workers’ representatives and local stakeholders, the FAIR SHARE project determined the monthly financial requirements of a family of four living in Tirupur/India. The project calculated that instead of the government minimum wage of 285 INR (gross) per 8 hours shift, the lowest paid workers should receive 466 INR (net) for a shift in order to earn a living wage. The FAIR SHARE project therefore increased the lowest wages in the factory by around 50% and the higher wages with the same absolute amount from 1.1.2016.
The project shows that labour costs of producing a basic T-Shirt are only 0.14 Euro. In order to pay the workers a FAIR SHARE premium that will eventually pay them a living wage, Continental Clothing now pays 0.14 Cents more for every FAIR SHARE T-Shirt, and the wholesale prices of the FAIR SHARE T-Shirts will only increase by the same amount. Continental Clothing will encourage retailers to keep the cost increase at the same amount and avoid marking it up. The project will now examine how consumers will react to this idea of paying a FAIR SHARE and how it could be scaled up.
The broad and positive media coverage after the communication of FIAR SHARE shows the importance of this topic. All articles can be find here.
If you are also confronted with the question of how a living wage could be put into practice, please contact Mark Starmanns for a non-binding exchange of views on the available options.