How Verifiable Data Can Enable Fairer Pay In The Fashion Industry

Shameek Ghosh is CEO and cofounder of TrusTrace, a leading platform for supply chain traceability within fashion and retail.

Despite years of commitments and initiatives, many of the workers who make our clothes still don’t earn enough to even purchase those same goods. Hidden deep in the fashion industry’s complex, opaque and multinational supply chain is a litany of garment workers making below what’s defined as a living wage. And consumers are starting to notice.

According to a survey from Vogue Business, “consumer expectations for the fashion industry to treat workers fairly and be transparent on wages and labor rights are as high as expectations for environmental issues.” Some results even show that consumers are willing to pay more for ethically produced clothing.

Hurdles To Fairer Pay

In response, brands are rolling out fresh new commitments to workers’ rights, but I see few yielding tangible results. That’s because similar to sustainability efforts, committing to paying workers a living wage and actually knowing—or proving—that living wages are being paid can be a tricky proposition. It needs to be a shared commitment and, most importantly, one that’s traceable.

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Often used as a template of a company with more transparency, Patagonia regularly details its efforts to ensure living wages in its supply chain. In 2016, working with the Fair Labor Association, it began piloting tools to collect wage data in its factories, and in 2020 the company disclosed that 39% of its factories were paying a living wage. This is hard-won, data-enabled progress.

Lacking the proper data and information, it’s virtually impossible for brands to identify problem areas and make real improvements. Some form of supply chain traceability is necessary to map every tier of even the most complex supply chains and deliver the granular data needed to effect change.

Promises to pay living wages, ethical wages or even minimum wages are, of course, welcome. But insufficient data is the most common issue in execution. Across fashion’s vast supply chain, simply knowing where each individual material comes from is a massive undertaking. Information on worker pay is even harder to come by as brands dig through layers of supplier spreadsheets and documents.

Traceability Playbook

That’s why it’s important to create ongoing visibility into wages throughout the supply chain; the same way, it’s important to have visibility into products, materials, emissions, waste and more. Outlined below are some ways to establish this baseline visibility from a traceability playbook that my company put together with a couple of our business partners.

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First, it’s not enough for brands to disclose their approach to achieving living wages for workers. Brands need to publish concrete progress toward accomplishing their goals. Verifiable supply chain data is required to identify problem areas and tell the complete story when you make a true leap forward.

The vast majority of the people who make our clothes are directly employed and paid by suppliers, not brands. The largest fashion brands have thousands of suppliers, so it can be admittedly difficult to know what every worker is being paid at every factory. Traceability platforms can alleviate this hurdle by mapping every supplier and providing not only wage data but various sustainability metrics as well.

Overall, it requires onboarding supply chain partners, helping them understand the importance of living wages and collaborating on strategies to boost wages while meeting business targets. Most importantly, suppliers need the tools for inputting wage data into a traceability system to chart progress. Brands can then identify factories that come up short and remedy sub-living wages.

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A Growing Need

Getting supply chain partners on the same page and working together on living wages is becoming even more critical as legislation could soon make a level playing field for companies a reality. Several EU organizations and citizens are behind a new campaign called Good Clothes, Fair Pay that calls for EU legislation that requires all fashion brands in the region to conduct due diligence on living wages throughout their supply chains.

A traceability system that includes living-wage data not only helps a brand comply with whatever regulations might come their way but also helps tell a brand’s story of promoting workers’ rights—convincingly—to consumers who are increasingly interested in buying from responsible companies. And let’s not forget what’s most important: Paying workers what they deserve makes the world a better place. Whether a brand is just starting to address the wage issue or seeking to share its progress with consumers, data must always be its starting point.

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