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Sector Risks
Wages and Social Security
About the sector risk

According to the World Bank, almost 700 million people worldwide live below the poverty line. Even work does not always protect against poverty: especially in textile production, low wages and excessive overtime are a frequent problem and workers often cannot live on their wages. A wage is considered a living wage if it covers the living costs of workers and their dependent family members and allows for adequate reserves for emergency situations. According to the ILO, this wage must be achieved in a standard working week of no more than 48 hours.

Although statutory minimum wages exist in many countries, they are usually too low to meet the above criteria. Low wages, overtime and the risk of child labour are interrelated and constitute a structural problem in the textile sector. Therefore, improvements towards living wages require joint action by different actors and approaches at different levels. Possible solutions include the right to Freedom of Association and Collective Bargaining, training of suppliers in production countries to isolate labour costs in cost calculations, and responsible purchasing practices by buying companies.

Social benefits are designed to provide financial protection for workers in certain circumstances. These include, for example, illness, accidents at work or pregnancy. Although there are respective legal regulations in some production countries, these are often circumvented in order to save costs.

The COVID-19 pandemic has once again shown that the living conditions of workers in the textile industry are precarious and that there is a lack of social protection. For this reason, the Textiles Partnership, together with other organisations, has issued a joint statement calling on the governments of producing countries to strengthen social security systems in their countries in the long term.

The Partnership’s social goals and standards

The Textiles Partnership has formulated social goals that all members recognize by joining the Partnership. These goals are based on international social standards, in particular the ILO Conventions, the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises. With regard to health and safety at work, the goal is as follows:

Integration into all fields of work of the Textiles Partnership
Individual Responsibility

Wages and social benefits are among the eleven sector risks that the Partnership companies focus on in the review process. Based on the results of their risk analysis, they define targets and measures on how to improve the wage situation.

Collective Engagement

Because individual actors can achieve little on this issue, the Textiles Partnership has launched a Bündnisinitiative zu existenzsichernden Löhnen on living wages. The members work together to develop effective solutions to address the wage issue.

Mutual Support

A peer learning group is working on purchasing practices. In addition, there are various support materials on the topic, for example the Guideline on living wages (DE and EN). It gives an introduction to the topic, shows practical starting points and assistance and provides support in developing one's own strategy for implementing living wages in the supply chain.

Strategic cooperation

Since 2017, the Textiles Partnership has been cooperating with ACT (Action, Collaboration, Transformation). The initiative campaigns for living wages and promotes collective bargaining and collective agreements. In addition, the Partnership has also been cooperating with the Fair Wear Foundation on wages since 2017.

Partnership Initiative on Living Wages

Twelve Partnership companies joined together in 2019 in a Peer Learning Group (PLG) to analyse their purchasing practices using the Purchasing Practices Self-Assessment Tool (PPSA). The PLG companies are now developing action plans to improve their purchasing practices.

In the second module of the Partnership Initiative, joint supplier trainings are offered with the Fair Wear Foundation and the Dutch Agreement on Sustainable Garments and Textile (AGT). The aim of the trainings is to educate suppliers on basic social standards. They also learn about tools and methods to support them in raising wages for workers.

The Cambodia country module supports the ACT initiative in its efforts to promote collective agreements in Cambodia. In view of the EU Commission's decision to suspend tariff preferences for Cambodia and the impact of COVID-19, it is still unclear how the negotiations initiated by ACT will continue on the ground.

With responsible purchasing practices to higher wages

Purchasing practices are the principles and processes by which brands and retailers interact and do business with the manufacturers and suppliers of their products. Responsible purchasing practices enable all partners in the supply network to plan their production and working hours effectively and to pay workers fairly. At the same time, they can invest in the overall improvement of working conditions and thus strengthen resilience in the value chain. Making it the Annual Topic of 2021, the Textiles Partnership puts a special focus on responsible purchasing practices. 

The COVID-19 pandemic has shown that working in partnership with suppliers and other business partners in production countries is crucial to protect workers' rights. To mitigate the short-term negative impacts of the COVID-19 pandemic, the Textiles Partnership published guidelinesin April 2020, which contain recommendations for dealing with orders as well as health risks and the risk of infection in production facilities. Some members used the document to make a public commitment to act responsibly.

Together with other multi-stakeholder initiatives, the Textiles Partnership is working on a common framework on purchasing practices. Among others, the Ethical Trading Initiative, ACT and Fair Wear Foundation are involved.

With the help of the Basic Training companies in the Textiles Partnership learn how their purchasing practices affect working conditions in the supply chain and how they can improve them. The 30-minute video introduces to the topic for all employees of departments involved in purchasing practices: CSR, purchase, design, HR, quality management, accounting. The video is available in German and English and was produced by the Partnership Secretariat with the support of Partnership member ALDI Süd.

Further information and tools:

ACT: Action, Collaboration, Transformation (ACT)

ASN Bank: Living Wage in the garment sector: Results of the 2019 reviews (2019).

Partnership for Sustainable Textiles: Responding responsibly to the COVID-19 crisis (2020).

Clean Clothes Campaign: Living Wage.

Fair Wear Foundation: Pushing for Living Wages.

German Institute for Human Rights: Bringing Human Rights into Fashion Chapter 3.5: Social protection and work safety are inadequate.

GLWC: Global Living Wage Coalition

WageIndicator Foundation: Wage Indicator.