THIS IS OUR STATEMENT.
IF WE DON'T LIKE SOMETHING, WE CHANGE IT
- IF WE LOVE SOMETHING, WE FIX IT.
On Rana Plaza, Living Wages, a Broken Industry – and How to Fix It
Almost four years ago, a building collapsed - and we are still in shock. More, we (!) still have a bad conscience (which we try to suspend while shopping). And we do what we always do in such a situation: we find culprits.
We blamed companies who sourced from Rana Plaza.
Yet, the building also hosted a bank, offices, and shops - it looked safe. On April 23, it showed cracks and was evacuated. On the next day, two inspectors declared it as safe (bribed by Mr. Sohel Rana, the owner of the building), but only the garment workers went back, while the rest remained closed. They were threatened to lose a month’s salary. Instead, they lost their lives, loved ones, or the ability to work again and earn their livelihood.
We should blame the low wages which leave no room for choice.
On that subject, we have already blamed the fast fashion brands which offer cheap fashion for their alleged greed, who in turn blamed their own customers and their - equally alleged - unwillingness to pay more. Yet, all surveys and statistics demonstrate that most consumers would in fact be willing to pay an adequate markup for fair production conditions – we are talking about a few cents per piece, after all.
But while it may be easy to choose FairTrade sugar over conventional one (it is only slightly more expensive, can be found in the same stores and tastes at least as sweet) – fashion is a bit more complex. Here, consumers have but a few options all of which would bring about limitations in convenience, choice, style, and/or budget.
So they may be ready to pay more for fair production, but not willing (or able!) to pay the quite substantial price difference charged by current FairTrade brands (which is not solely due to the treatment of workers but mainly to their lacking of the fast fashion brands’ economies of scale and efficiency). In addition, all options would reduce the total amount of garments sold, which would inarguably worsen the situation for the garment workers.
THE SYSTEM IS BROKEN
So, even though the ones who would in the end bear the additional costs of higher wages (the consumers) would be willing to do so, the market cannot regulate itself to create this mutually desired outcome. And where market cannot regulate itself, the underlying system is dysfunctional – the fashion industry is broken.
The weakness lies in the length of the supply chain and its lack of transparency.
The companies cannot simply raise the garment workers’ wages – because usually they don’t know them. Trying to change that in recent times, most now know their first- and second-tier suppliers (and some have disclosed them in some countries), but there are so many subcontractors involved with whom orders are handled mainly via purchasing intermediaries, that they are not in direct contact with the majority.
This system is called Indirect Sourcing. It provides the flexibility necessary for fast fashion production. However, it also leads to an immense lack of transparency, wrong understanding of priorities, lack of identification and accountability, and enables time pressure to be a driving force. The actual price war takes place between the suppliers (not the retailers!), the actual price sensitivity lies with the purchasing agents (not the consumers!).
It makes no sense to blame the companies for sourcing from one special building (or postulate compensation from them), if the underlying system is the cause for the real problem. Instead every single company which relies on indirect sourcing should contribute to the Rana Plaza fund.
Because in that system, it was mere luck, for which brand products from involved factories were destined. In fact, they should open an emergency fund for fast relief in future industry accidents (agreeing on safety standards is a good start, but not more than that, since these only cover first-tier suppliers, not to mentions other weaknesses). And the amount of contribution should depend on their total revenue. It would be tiny, if every major company would take part. Yet, this wouldn’t fix the main issue, the wages.
HOW TO FIX FASHION
There are two possible solutions: a) Establishing strong, direct, long-term relationships with the suppliers AND the sub-contractors and b) Raising the minimum wage.
Both is needed. The first has already started, but progress can only be slow. More efficient would be to raise the minimum wage. Some companies are trying to convince governments to do so, but they can’t, as long as they have to fear that all the other brands will move on to countries with even lower wages in case they would indeed raise theirs.
What is needed, is that as many brands as possible pledge to pay living wages.
This approach is shared by some of the biggest brands (H&M, Inditex, C&A, Tchibo, Primark, New Look, Next, N Brown Group), who have in a so far unprecedented move conjointly sent a letter to the Cambodian government preceding the upcoming wage negotiations, stating that they are willing to pay higher wages. The minimum wage has then risen about 28%.
They now need to strengthen their pledge by adding credibility. The not even half-filled Rana Plaza Fund continues to symbolize that there is no “charity” money in the fashion industry. So why should anyone believe that these companies are really ready to pay higher prices than they absolutely need?
Therefore, they should put some money into their talk – or into the Rana Plaza Fund. The brands are in the driver’s seat.
So are we, the consumers.
It is a great step to take action like so many did on Fashion Revolution Day. Now we need to put some money into our talks, too – and to ask for a precise action. In order to encourage more brands to follow those pioneer brands, and all of them to enhance their pledges with credibility, we should start to demonstrate that we indeed DO CARE and ARE WILLING to pay a tiny little premium for the workers’ well-being - and put some money into our talk, too.
The FairBuy Foundation is a charitable company dedicated to this goal and provides a free mobile app. All money collected is forwarded directly. It will go to initiatives for the garment workers, such as campaigns to inform them about their rights and contact points they can turn to (anonymously) in case they feel these rights are violated.