The Circle Sets Out the First Steps Towards a Legal Solution to End Poverty Wages in the Fashion Industry

Today at our Living Wage Symposium in London we launched our second report – Fashion Focus: Towards a Legal Framework For a Living Wage – with the purpose of providing a basis for a new proposal on living wage regulation.

Based on legal research conducted by members of The Lawyers Circle and Milbank, we draw on 11 diverse areas of existing EU regulation with extra-territorial effect to evidence potential parallels and precedents for EU Living Wage Legislation – and to provide arguments for the EU to look beyond its own borders in its regulation.

These existing regulations demonstrate key principles that underpin EU legislative action:

a) that the EU should not cause harm
b) that the EU should be protected from anti-competitive behaviour cause by lower standards outside the EU
c) that the EU acts to address abuses of power
d) that the EU support the sustainable development goals
e) that the EU seeks to ensure compliance with international law

All of these provisions are met within the arena of wages:

a) Low (some say poverty) wages in the production countries that the fashion industry often sources from cause significant harm in the way that they limit workers’ life choices and their ability to provide for themselves and their families.
b) Global labour arbitrage has a significant effect on the internal labour market of the EU – many find it impossible to compete with the cheap labour market abroad.
c) The current system involves a power imbalance whereby production country Governments cannot raise wages to fair levels for fear of losing business that is core to their GDP (read more about this dynamic in our first report).
d) SDGs 1 (No Poverty), 5 (Gender Equality), 8 (Decent Work and Economic Growth) and 12 (Responsible Consumption and Production) can be seen to speak to this issue (alongside others)
e) As demonstrated in our first report a living wage is an internationally recognised fundamental human right.

Our research leads us to consider that the EU may have reached a stage where it is willing to consider approaches to correct this issue. Further evidence from the European Parliament suggests that they would welcome a legislative proposal that combines wage level obligations and due diligence standards.

Working within the boundaries set by WTO rules, we therefore propose a regulatory system that will actively encourage importers to the EU – through the mechanisms of mandatory due diligence, reporting and sanctions – to ensure their garments are only made by workers paid a living wage.

At this point we are fully aware that this is the BEGINNING of a legal solution. Every significant change has to start somewhere – we are placing our proposal on the table to start discussion; in the expectation that it will be pulled apart – so that we can engage in a robust solution focussed debate. It is widely recognised that current wage dynamics within the industry are a hugely complex problem – but equally that we need a resolution. We hope that stakeholders from within the industry, and without, will join us in seeking a resolution that truly works for the benefit of garment workers globally.

Download the full report here: Fashion Focus: Towards a Legal Framework For a Living Wage

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You can read more about our living wage work, and donate to support this project, at our Living Wage Project hub.