The apparel industry’s reliance on the cheapest needle is having a determinantal impact on garment workers around the globe. Even as minimum wages around the world are increasing, employees’ pay is falling further and further behind inflation, widening the gap between minimum wages and living wages. And it’s a conversation that too few in positions of power and influences are having.
Good on You, which rates fashion’s environmental and social impact, reports that 73 percent of large fashion brands don’t disclose anything about living wages.
A living wage, as defined by the International Labor Organization in 2024 is “the wage level that is necessary to afford a decent standard of living for workers and their families, taking into account the country circumstances and calculated for the work performed during the normal hours of work.” Though the ILO notes average wages are trending positively globally, millions of workers are still unable to afford basics like healthy food, decent housing and medical care.
On average, there’s a 41 percent gap between minimum wages and living wages, across 31 key garment producing countries, according to the Industry We Want and the WageIndicator Foundation findings. That represents an 8 percent improvement over 2024.
Average Monthly Apparel Worker Minimum Wages Compared to Living Wages, 2024 (USD$)
*Current living wage data for Turkey not available
Minimum isn’t the minimum
“I would doubt that any garment or textile worker in Pakistan is earning a living wage,” Khalid Mahmood, director, Labour Education Foundation (LEF) in Pakistan.
First, Mahmood said the minimum wage—which is half the living wage, as calculated by LEF—does not reflect reality. Second, the minimum wage lags behind inflation.
In fact, a study conducted by the European Center for Constitutional and Human Rights found that approximately 28 percent of workers in Pakistan did not even nominally receive the legal minimum wage for “unskilled workers.”
Most workers are paid by the piece which Mahmood said makes it impossible to earn 40,000 rupees in an 8-hour day. And for some, things like food and transport are deducted from their earnings.
To earn a living wage, workers would need to earn 80,000 rupees. This would require them to work 12-hour days, comprised of 8 regular hours plus 4 hours of overtime. Despite laws that set overtime at twice their regular rate, workers rarely receive the stipulated double pay, Mahmood said.
This issue is not just confined to Pakistan.
Audits conducted by compliance firm Qima in 2024 revealed that 37% of factories in Bangladesh reported critical violations related to working hours and wages, more than double the rate seen in 2023. In 2016 the ILO reported that India’s rate of non-compliance with the minimum wage was 50.7 percent, Cambodia 25.6 percent and Vietnam 6.6 percent.
Things are equally murky when it comes to benefits. Though production companies often tout perks like child care and upskilling opportunities, those walking the walk in practice are limited. Mahmood said only the big factories can implement these programs. The rest are just paying lip service.
“There are very few factories who are offering these things in real terms. In general, we see that these things are only developed one time, just to show to the brands” Mahmood said, adding these performative practices are just enough to help production facilities pass inspection. “And this social auditing thing is really not bringing up the real situation of the workers in the factories.”
While the apparel supply chain is often characterized as opaque, with partners from one tier to the next in the dark about what’s happening beyond their control, Mahmood said ignorance is not the root cause here.
“The brands are standing on the sides of the employer. They both have same the objective. They want to earn more and more profit, so they both are standing on the same side,” he said. “The brands know the situation. If they want to know, they can know the real situation, but they do not want to know.”
Minimum Wage Increase (YoY)% and Inflation Increase (YoY)%
Brands on the hot seat
The topic of living wages has long been a hot potato, with factories, brands and myriad stakeholders attempting to shift focus and responsibility from one to another.
The overarching brand standpoint is often that they’re meeting their obligations by adhering to the minimum or average wage for the region. From there, they’ve said, it’s the factory’s responsibility to take care of the workers.
On the factory side, the argument is their margins are razor thin, which doesn’t allow them to increase salaries. As for benefits, production companies say the laundry list of expectations they receive from downstream partners aren’t accompanied by financial support.
The World Benchmarking Alliance’s 2023 Corporate Human Rights Benchmark Report bears that out.
It found that only 27 percent of apparel companies disclose evidence of enabling their vendors to meet their human rights and gender equality expectations through responsible purchasing. The WBA sited practices like last minute order changes, short lead times and late payments as ways that brands undermine these efforts. Of those companies that do offer support for either human rights or gender equality, the programs are often fragmented.
“The disparity between high expectations and the lack of a conducive environment to meet them creates a scenario where suppliers struggle to meet both human rights and gender equality standards and commercial demands,” according to the WBA.
Sofia del Valle, engagement lead, social transformation for the WBA, finds an odd dichotomy between the power that brands wield over their vendors and how they characterize themselves.
“At the end of the day, I’d say most apparel companies end up washing their hands and saying, we set these standards on suppliers, and whatever they do with that is beyond us,” del Valle said. “There’s this kind of strange thing about big brands, which I think has to do with them being both super powerful and then sometimes playing like they’re the weakest. They say ‘Oh, we have no leverage at all. We cannot do anything. We’re only one little player in the market.’”
Del Valle sees this as disingenuous, especially because she’s witnessed what upstream players can accomplish when they’re properly motivated. The biggest example, she said, was following the Rana Plaza tragedy, when brands came together to support new health and safety standards in Bangladesh, which have since extended to other countries. Similarly, once brands became involved with the labor disputes in the same country last year, the issue, which had turned bloody, was resolved.
“They’re not so helpless, but it takes them to be put in an uncomfortable position [where] the world is really on fire,” she said.
Ultimately, she said these examples show brands have the ability to address the living wage situation, but they choose not to. The common denominator with Rana Plaza and the labor disputes was that in both cases lives were lost and the news coverage was unrelenting. The conversation around living wages, however, isn’t as immediate, and as a result, hasn’t been met with the same urgency.
A collaborative effort
While del Valle would like to see brands step up, she recognizes that they can’t do it alone. On the one hand, brands argue they can’t disrupt the labor market with wages that dwarf the average rates, and on the other, countries can’t afford to set minimums that undermine their competitiveness with rival apparel producing nations.
“It’s a really systemic process to move towards living wages as a norm,” del Valle said. ”That’s not going to be led by brands, but I think brands have a big role to play in showing that they’re willing to engage with workers and with states in making this happen, and working with suppliers in making this happen, because right now, most of the efforts are pilots.”
From Mahmood’s perspective, there’s plenty of responsibility to go around, including the brands, the governments and the suppliers. But, he said, there’s no question who holds the leverage.
“The suppliers here do not listen to the state. They do not listen to trade unions. They listen to brands,” he said.
And soon the brands may have to listen to the governments.
The EU’s Corporate Sustainability Due Diligence Directive (CSDDD) includes stipulations that purchasing practices must support living wages. Further, the European Sustainability Reporting Standards, which is part of the Corporate Sustainability Reporting Directive, requires disclosures about whether companies’ workforces and their suppliers’ workforces are paid “an adequate wage.”
While Mahmood is skeptical of how well these policies will be implemented and enforced, he does agree with holding the export markets to account. “[These] countries have to understand that their states are also responsible for this global business practices,” he said. “They need to make the brands accountable in their own countries if they are earning profit out of exploitation of the labor in our countries and bringing that profit back to their countries.”
—Additional reporting by Erin Schmidt
