Human rights and trade | Opinion

When is a living wage a living wage?

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Supply chain issues into the mainstream

The furore around wages paid to workers making Beyoncé’s Ivy Park branded products highlights the big challenges around comparing pay and its relative value

Celebrity journalism is a fickle business. Build-em-up, knock-em-down is the strategy of choice for many tabloid editors, not least in the UK.

There are famous people that will always be the subject of press interest. Take Sir Philip Green, the multimillionaire retail magnate, former owner of troubled high street chain BHS. Then there are global sensations such as Beyoncé, a singer at the top of her game who can’t seem to put a foot wrong in the eyes of adoring fans and worldwide media alike.

£4.30 a day …

Put these two unlikely public figures together and what do you have? One juicy Sun on Sunday newspaper exposé that alleges Beyoncé’s new sportswear range for Topshop (a chain owned by Green) is being made using “sweat shop” labourers earning just £4.30 a day – or 930 Sri Lankan rupees.

Beyoncé’s aspiration for her Ivy Park gym gear to inspire women and the retailer’s claims to empower women through fashion are at odds with the image of a poor seamstress working long hours at the supplier MAS Holdings’ factory in Sri Lanka. The singer’s range of leggings start at £100, more than a month’s wages for the workers.

Beyond the headlines though, the story does raise some interesting questions for the sustainable supply chain agenda as well.

While 930 rupees a day wage seems insufficient in the context of the Beyoncé/Green narrative, it works out as significantly above the Sri Lankan legal minimum wage of 13,500 rupees a month. And despite tabloid accusations, there is no evidence to suggest MAS is treating staff badly or breaking any laws.

… or a £100m yacht

This does highlight how hard it is to make useful comparisons between developing economy levels of pay and millionaire lifestyles, and indeed between fair pay levels across any economy.

It is a dramatic headline grabbing contrast between Sri Lankan workers’ wages and Beyoncé. Combined with her rapper husband Jay Z, the pair are worth a combined £760m. And Green has apparently just bought himself a £100m yacht.

So scrutinising the working conditions and pay of those along this particular supply chain – even when there is little evidence of wrongdoing – is inevitable. Such largesse also pales against the spending power of almost everyone living in western Europe, for example, and not just those working in developing world factories.

The definitions debate

While campaign groups agree that moving from a minimum to a “living wage” on which a worker can provide for a family beyond a subsistence lifestyle is essential, there are divergent views on what that is. The waters are muddied further as different methodologies quote annual, monthly or daily amounts, making direct comparison tricky.

Labour Behind the Label
, for example, suggested that in Sri Lanka around 334,000 rupees a year is a living wage in 2012, amounting to about 27,800 a month. In a 2014 report, the Clean Clothes Campaign goes for a monthly wage of €260, some 42,600 rupees. On the basis of a 45 hour working week, £4.30/930 rupees a day amounts to under 20,000 rupees a month, depending on how many days worked. There are carefully thought-through methodologies behind each of these, but who’s right?

An often missed aspect of the fair pay debate is that even at the sort of wage levels being paid to the MAS workers in Sri Lanka, they can still be much more than income levels from other employment, especially in rural areas with economies based around agriculture.

Development expert Dr Peter Davis, author of a recent UK government report on middle income countries and business, argues that factory wages inflated in the light of comparison with developed world standards can in fact cause an in-balance in local economies. “If wages in factories are many multiples of what workers can get elsewhere – whatever the poor conditions in which they have to work – then other local businesses can find themselves unable to recruit.” Worse, of course, if the factories close then a local sub-economy based around the inflated wages will disappear.

Mainstream interest?

However, the fact this apparently rather niche supply chain story was picked up and splashed across the UK’s best-read Sunday newspaper could well be indicative of a general increase in awareness of supply chain issues among the general public.

But there remains the danger of exaggerating for impact. The campaigning group Anti-Slavery International, for example was quoted by the Sun as stating the situation was “a form of sweat shop slavery”.

On the group’s website, though, Anti-Slavery International’s Jakub Sobik argues out that the Ivy Park brand and Topshop were actually unlucky to be singled out. He also makes the wider point that the focus should really be on solving the worker exploitation issues that such stories bring to light.

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