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Labour behind the Label (LBL) has published its annual ‘Let’s Clean up Fashion’ report on the labour standards of high street fashion retailers. Like previous reports it makes fascinating reading.

This year’s report focuses on retailers’ efforts on Living Wages. This is a crucial area for ethical trade and labour standards, particularly in the era of the credit crunch, rising oil prices and high rates of inflation. As the report states: “As economic storm clouds gather … those same storm clouds bring with them major food price inflation for garment workers, who deserve better from the retailers whose profits they sustain.” Retailers’ efforts on living wages are indicative of the sophistication of retailer’s broader approach to ethical trade.

The report is challenging and sets the bar high. LBL and their partners have been calling for urgent increases in wages. They note: “In 2008, companies seem to be hearing the argument, and have begun to experiment with projects that aim to increase wages, rather than getting hung up on definitions.”

LBL identify four pillars of an effective living wage project. These are:

• A collaborative multi-stakeholder approach
• The involvement of worker organising particularly through trade unions
• Examining commercial factors throughout the whole supply chain
• A clear route map for implementing living wages for all workers

The report notes that only the ETI’s Living Wage project fulfils all of these criteria, but progress has been slow, and the project is yet to get off the ground.  Other projects have focused on improving productivity to increase wages.  However, LBL thinks that these projects are not enough, for the following reasons:

• Productivity improvements put workers who work long hours in high pressure environments under even more pressure.
• There is no guarantee that the benefits of productivity improvements will be passed on to workers in the form of higher wages
• Increased productivity may well lead to fewer jobs, or to different jobs
• Productivity improvements set the bar too low and mean that retailers take the eye off the ball of living wages.

We at Impactt don’t entirely agree with Labour behind the Label about this, as we have commented before.

However, it is clear from the report that not enough is being done to make a positive difference to the wages in workers’ pockets.  In LBL’s view, the vast majority of high street retailers have not achieved much progress in working towards a living wage for workers in their supply chains.  LBL says ‘one cheer’ for Sainsbury’s,  Asda, Primark, Arcadia and Tesco, and ‘two cheers’ for M&S, Gap, Monsoon Accessorize, New Look and Next.  But no retailer gets the full complement of ‘three cheers’.

Reading through the report it is hard not to conclude that even those retailers that have been singled out for praise by LBL are finding it hard to deliver real pay increases in workers’ pockets.  The exception is New Look who, in the words of the report, is the furthest advanced in work to increase wages, with a project that appears to have genuinely improved wages and working conditions, involved worker organising, and encompassed a (limited) examination of purchasing practices, all along with a genuine plan to roll this learning out across its supply base.”  We say, three cheers for New Look.