Wages should cover basic needs and expenditure and allow for reasonable savings. We do not determine what our suppliers pay their workers, but we acknowledge that we can influence fair wages, not least through the prices we pay for manufactured goods....
Wages should cover basic needs and expenditure and allow for reasonable savings. We do not determine what our suppliers pay their workers, but we acknowledge that we can influence fair wages, not least through the prices we pay for manufactured goods.
However, price is not the only factor in our sourcing decisions. As well as quality and timeliness, we also insist on adherence to our Workplace Standards. These make it clear that wages must at least equal or exceed the legal minimum wage or the prevailing industry wage whichever is higher. Benefits and overtime rates must be paid too.
In 2003 we commissioned an NGO to carry out a pilot project on fair wages in Indonesia, the results of which were presented at workshops attended by NGOs and others in Indonesia and the USA. We continue to have an ongoing dialogue with NGOs about fair wages and since 2011 have been piloting Fair Wage assessments in our suppliers’ factories.
We also talk to our suppliers regularly about wages and benefits. Beyond meeting legal requirements, we encourage them to consider cost of living data, to set wage levels in discussion with workers and to reward workers for productivity gains.
As wages increase, there are commercial pressures to seek cheaper sources of supply in countries with lower wage levels. However, we also consider the benefits of maintaining long-term relationships, so we avoid continually shifting our supply base.