Made inpoverty

The trueprice offashion© Oxfam Australia, February 2019
Oxfam Australia 130­–138 Leicester Street, Carlton Victoria 3053 Australia
Tel + 61 3 9289 9444 | Fax +61 3 9347 1983
enquire@oxfam.org.au
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Cover image: Dhaka, Bangladesh: Garment worker Shima photographed on her home sewing machine in Dhaka. Photo: Fabeha Monir/ OxfamAUS.
Back cover image: Dhaka, Bangladesh: Garment worker, Chameli and her daughter Lucky pictured at their home in Dhaka. Photo: Fabeha Monir/ OxfamAUS.

Acknowledgements: Many colleagues helped to develop
this report including Saiful Alam (Oxfam in Bangladesh),
Van Thi Thu Ha (Oxfam in Vietnam), Amanda Banks and Mika
Tran (Oxfam Australia). In addition, helpful suggestions were
provided by Md. Manirul Islam (Bangladesh Institute of Labour
Studies) and Pham Thu Lan (Institute for Workers and Trade
Unions). Oxfam also thanks the Bangladesh Institute ofLabour Studies (BILS) and the Institute for Workers and Trade
Unions (IWTU) for conducting the research in Bangladesh andVietnam respectively.
Authors: S Nayeem Emran, Joy Kyriacou and Sarah Rogan(Oxfam Australia)
Editor: Melissa SpurginPublished by Oxfam Australia, Melbourne, February 2019
Designer: Stina Johansson
Printer: Finsbury Green
Printed with vegetable-based inks on Cyclus Matt/ecostar,an unbleached coated paper made from 100% recycled
post-consumer waste.
OXFAM RESEARCH REPORTS
Oxfam research reports are written to share research
results, contribute to public debate and invite feedback
on development and humanitarian policy and practice.
This is the third report in a recent series on living wages
in the garment industry, following the handbook ‘A Sewing
Kit for Living Wages’ (2017) and report ‘What She Makes:
Power and Poverty in the Fashion Industry’ (2017).
Disclaimer: The views of this publication are those of theauthors and do not necessarily represent those of Oxfam
or any funding agency.
Statement of copyright: This publication is copyright,
but the text may be used free of charge for advocacy,
campaigning, education and research, provided thatthe source is acknowledged in full. The copyright holder
requests that all such use be registered with Oxfam for
impact assessment purposes. For copying in any othercircumstances, for re-use in other publications, or fortranslation or adaptation, permission must be secured
and a fee may be charged. Email enquire@oxfam.org.au.
The information in this publication is correct at the timeof going to press.

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MADE IN POVERTY — THE TRUE PRICE OF FASHIONABOUT OXFAMAt Oxfam, we believe all lives are equal and no-one
should live in poverty. We join forces with people whoshare this belief, to empower communities to build better
lives for themselves. That’s why we are there on the ground,
not only to save lives in times of crisis, but also to develop
lasting solutions. Our work spans wide because there aremany causes of poverty. That’s why we’re also in front ofdecision-makers, governments and corporations,and speak out on the big issues.
ABOUT THE INSTITUTE FOR WORKERS AND TRADE UNIONSThe Institute for Workers and Trade Unions (IWTU) wasestablished in 1995 by the Vietnam General Confederationof Labour (VGCL). The main function of the IWTU is to doresearch on workers and trade unionism and conductcapacity-building activities for enhancement and promotionof workers’ rights and trade union rights through mass media,
public campaigns on law and policy-making, law enforcement
and in order to advise the VGCL to claim workers’ rights tothe level of international labour standards. As a research
institute, the IWTU does research on different areas related
to human rights for awareness campaigns so as to protect,promote and enforce human rights in the country.
ABOUT THE BANGLADESH INSTITUTE OF LABOUR STUDIES
Established in 1995, Bangladesh Institute of Labour Studies(BILS) is the only labour institute in Bangladesh. As an apex
organisation, BILS endeavours to uphold the causes ofworking people and trade unions of Bangladesh. There are 12
major National Trade Union Federations associated with BILS.
With the view of building up a just and democratic society andenabling the workers’ organisations to play their appropriaterole as a major force, BILS emphasises the capacity buildingof the trade unions through training, research and information
sharing. Protecting workers rights is the main objectiveof BILS and it strives to promote just and worker-friendly
policies and laws in Bangladesh. It also plays a catalyst rolein bridging trade unions, civil society and the government on
labour market issues.

Contents
FOREWORD

5

1. EXECUTIVE SUMMARY		

6

2. THE HUMAN COST OF POVERTY WAGES

8

Mind the gap

9Food and nutrition		

14

Health and impacts of overtime

18

Housing and living conditions

24

Education and family		28

3. ADDING FUEL TO THE FIRE: WAGE THEFT, JOB INSECURITY, ABUSE AND INABILITY TO ORGANISE

32

Wage theft

33

Job insecurity

34

Verbal, physical and sexual abuse

35

Ability to organise		

36

4. THE ROLE OF BRANDS

40

How the purchasing practices of brands play a role41

Price negotiation

42

How Australian garment supply chains work

43

Lead times and fast fashion

44

Lack of long-term commitments

44

Mismatch

45

Changing the way brands work is possible

46

5. RECOMMENDATIONS

48

For brands

48

For governments

49

6. ANNEX		

50

Industry overview

50

Methodology

51

Analysis plan

54

Limitations

54

List of leading brands/ companies operating in Australia sourcing from Bangladesh and/or Vietnam

55

Further information about living wage benchmarks

56

MADE IN POVERTY - THE TRUE PRICE OF FASHION|3

DEFINITIONS
Australian companies/Australian brands: Companies selling
clothing in Australia under their brand name.
Brand: Unique design, sign, symbol, words, or a combinationof these, employed in creating an image that identifies a
product and differentiates it from its competitors.
Buyer: The name given to global fashion brands (including
Australian brands) when they place orders and ‘buy’ clothingfrom garment factories around the world. In this situation,
brands are the ‘buyers’ and garment factories are the‘suppliers’.
Code of conduct: Principles, values, standards, or rules of
behaviour that guide the decisions, procedures and systemsof an organisation in a way that (a) contributes to the welfareof its key stakeholders, and (b) respects the rights of all
constituents affected by its operations.
Collective bargaining agreement: Written, legally enforceable
contract for a specified period between the managementof an organisation and its employees represented by anindependent trade union.It sets down and defines conditionsof employment (wages, working hours and conditions,overtime payments, holidays, vacations, benefits, etc.)
and procedures for dispute resolution.
Cycle of poverty: Endless continuation of poverty, where
no matter what a person does, it is extremely difficult to moveout of poverty. Normally, this is because the structural factors
outside a person’s control like laws, the way businesses
operate and local context mean working to earn enough tomove out of poverty or escaping poverty by other means ismade near-impossible. Once a person or community falls
below a certain level of resources, a chain of events starts
to occur that tends to perpetuate the situation: progressively
lower levels of education and training leading to lack of
employment opportunities, leading to shattered health,often early death, and a similar situation of ongoing poverty
for the next generation.
Focus group: A group of people assembled to participate
in a discussion to provide feedback.

Freedom of Association: The right to participate in and joina union or any other form of association and to participate
peacefully in all activities of that union or association,
including peaceful protest. This is a fundamental human right.1
Garment factory/Manufacturer: A factory where garments are
made. On an industrial scale this involves sewing, cutting,making, processing, repairing, finishing, assembling, orotherwise preparing any garment.
Human rights: Rights inherent to all human beings, regardlessof race, sex, nationality, ethnicity, language, religion, or any
other status. Human rights include the right to life and liberty,
freedom from slavery and torture, freedom of opinion andexpression, the right to work and education, and many more.
Everyone is entitled to these rights, without discrimination.2
Inflation: Sustained increase in the general price level inan economy. Inflation means an increase in the cost of living
as the price of goods and services rise.
Lead time: Number of days between when companies(in Australia, for example) place an order and the clothingis delivered.
NGO: Non-Governmental Organisation. A non-governmentalorganisation is any non-profit, voluntary citizens’ groupwhich is organised on a local, national or international
level. Task-oriented and driven by people with a common
interest, NGOs perform a variety of service and humanitarianfunctions, bring citizen concerns to Governments, advocate
and monitor policies and encourage political participation
through provision of information. Some are organised around
specific issues, such as human rights, environment or health.
They provide analysis and expertise, serve as early warning
mechanisms and help monitor and implement international
agreements.
Poverty wages: Low wages, where workers are unable tomeet basic needs no matter how hard they work.
Sourcing countries: The countries from which Australianbrands source clothing.

1. See more information at: https://www.humanrights.gov.au/freedom-association.
2. See the Universal Declaration of Human Rights: http://www.un.org/en/universal-declaration-human-rights.

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MADE IN POVERTY — THE TRUE PRICE OF FASHION

Foreword
Chameli3, her husband and their three daughters live ina stuffy and cramped single room measuring less than nine
square metres. Two of the girls must sleep on the floor.
Chameli works in a factory in Bangladesh that supplies
clothing to Australian household name department
store, Big W. Despite working in the industry for six years,
Chameli takes home as little as $128 a month. Even when
she works overtime — as late as 3:00am at least once aweek during busy shipment times — the most she earns
is $165 a month. Her average rate of pay is about 51centsan hour.4,5

The report also examines the pressures placed on factory
operators and owners by Australian-based brands to keep
costs low — and in turn, keep wages at levels that denyworkers and their families’ decent lives.
Australian brands are an integral part of the system thatkeeps these women trapped in poverty. They have the power
and must take steps that will enable these workers to lift
themselves out of poverty. This can be done through ensuring
the payment of living wages that allow workers to buy enoughnutritious food, live in decent housing, send their children
to school and get healthcare when they are sick.

The family has often been saddled with debt, forced to borrowmoney after Chameli’s four-year-old son tragically drowned
and her husband had a heart attack.

The first step is for iconic Australian brands to commit toa clear strategy and timeline that will help guarantee thepayment of living wages to the workers making their clothes.

Battling to afford the basics, the family cannot afford anyof their daughters — aged 5, 12 and 14 ­— to attend school.

Women like Chameli have a right to be able to afford food,beds and education for their children. She cannot afford
to wait any longer.

Recently, Chameli and her husband were forced to makea painful decision to ensure the family could better meettheir needs. They sent their teenage daughter to follow
the path of her mother and work in a garment factory.

Dr Helen Szoke, Chief Executive, Oxfam Australia

This Oxfam report reveals a harsh and heartbreaking
reality — Chameli is not alone.
Based on hundreds of interviews with workers in Bangladesh
and Vietnam, this research lays bare the fact that thewidespread payment of pittance wages in the garment sector
is trapping workers and their families in a cycle of poverty.
The first in-depth investigation of its kind into the supply
chains of big Australian brands, this report exposes thehardships of everyday life for the workers, mainly women,
who are an essential part of a lucrative industry — and yet
who struggle every day to put enough food on the table.
Photo: Abir Abdullah/OxfamAUS

3. None of the workers or their family members in this report are identified by their real name for their wellbeing and the protection of their employment.
4. All monetary figures are expressed in Australian dollars unless otherwise stated throughout this report.
The exchange rate used is 1 BDT = $0.016 AUD in August 2018.
5. Calculated by taking average earnings as reported by Chameli and 286 working hours a month. Take home wage varies depending on hours of overtime
worked. Wage adjusted to reflect the new minimum wage in Bangladesh. Hourly rate described here is less than the minimum wage in Bangladesh due
to deductions that are made from her wages for mistakes and not being able to meet targets.

MADE IN POVERTY — THE TRUE PRICE OF FASHION|51. Executive summary
The Australian fashion industry was worth almost $23.5 billion in 2018 — a staggering
amount. But a system of entrenched exploitation and the widespread payment of poverty
wages is denying the workers making our clothes the opportunity for decent lives.6,7
Groundbreaking research conducted by Oxfam has exposed
the undeniable truth behind the clothes being sold in shops
across Australia: workers are trapped in a cycle of poverty,
no matter how hard they work.
This research — the first in-depth investigation of its kind
into the lives of the workers in the supply chains of Australianbrands — has revealed not only harrowing personal stories
of individuals, but a systemic failure to ensure payment ofwages that are enough for people to afford even the basics
of a decent life.
Oxfam, together with the Bangladesh Institute for Labour
Studies and the Institute for Workers and Trade Unions in
Vietnam, has interviewed more than 470 workers acrossBangladesh and Vietnam for this study. All of them were partof Australian clothing supply chains at the time of interview,
employed in garment factories that supply at least one iconic
Australian clothing brand.8
The investigation also included more than 130 interviews
with factory owners, managers, union leaders and focus
groups to present a clear picture of the way the fashionindustry works in Australian garment supply chains. 9
The result is the first full picture of the lives of the people
who work to bring fashion to Australian shelves, from two
key sourcing countries: Bangladesh and Vietnam. And theevidence is disturbing.
Not only are almost all the workers we interviewed being
paid well below a living wage; they are also struggling tofeed themselves and their families, sometimes going hungry.
They fall into spiraling debt, live in poor conditions andcannot afford the healthcare or education they and theirfamilies need. Workers in Bangladesh told stories of having
to leave school early or pulling their children out of school inorder to send them to work in the garment sector to bring in
more money — just to cover the necessities. In Vietnam,
the comparatively higher wages mean that the situationis relatively less extreme.
This investigation reveals that the problems created bypoverty wages in the garment industry are not isolated
incidents. They cannot be fixed by action in just one factoryor by addressing the hardships of just one worker. Only astrong, system-wide commitment from Australian brands
with the power to change their practices will turn this around.

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MADE IN POVERTY — THE TRUE PRICE OF FASHION

Among the many disturbing results, the research
has revealed:• ine out of ten workers interviewed in BangladeshNcannot afford enough food for themselves and theirfamilies, forcing them to regularly skip meals and eat
inadequately, or go into debt.

•

 2% of workers interviewed in Bangladesh factories
7
supplying to major brands in Australia, and 53% in
Vietnam, cannot afford medical treatment when they
get sick or injured.

• 6% of workers interviewed in Bangladesh factories
7
supplying to major brands in Australia have no runningwater inside their home, and more than 40% in Vietnam
reported worrying about having to use well or rain water.

•In Bangladesh, one in three workers interviewed
are separated from their children, with nearly 80%of those cases due to a lack of adequate income.

Behind each of these shocking statistics, there are countless
individual stories. These are the women who make our clothes.
Tania, who told us her story in Bangladesh, works up to 12hours a day in a factory supplying clothes to brands including
Kmart. At most, she takes home $169 a month; on average
earning about 55 cents an hour.10
The 21-year-old single mother’s only option to make ends
meet was to take a job at a garment factory in Dhaka. She wasstill breastfeeding when she moved from her village for thejob and tried in vain to make it work, but Tania was eventually
forced to send her baby home to be cared for by her parents.
She now sees her daughter just twice a year and told us she
often sits alone in her 1.8metre by 1.5metre rented room andcries in desperation.
Tania is among the one in three workers interviewed in
Bangladesh who reported being separated from their children
because of inadequate income and a lack of available care.
At the same time, while women like Tania face unjust andintolerable struggles, the Australian fashion industry isgetting bigger. Since 2015, returns to the shareholders of thefive major clothing companies in Australia have increasedby 81% per year on an average.11 The industry is expected
to grow at an annual rate of 1.9% over the next five years.

Dhaka, Bangladesh: Garment workers seen on their way to work on the streets of Dhaka. Photo: Fabeha Monir/ OxfamAUS.

Brands like Kmart and Cotton On have increased their annual
revenue intake by more than $1 billion each since 2014. These
companies have the power and the resources to help change
this unfair system.
Our research also reveals the strategies and practices used
by Australian companies that drive wages down. Interviews
with factory owners and managers showed that, despite clear
commitments on important fundamental rights at work intheir Codes of Conduct, Australian companies place pressure
on garment factories in many ways. They undertake fierce
price negotiation, often jump between contracts insteadof working with factories over the long term, squeeze leadtimes for orders and operate with a separation between theirethical and standards staff and their buying teams, who
negotiate directly with factories. One factory owner evenreported the extensive measures a company had taken to
keep their clothing safe in case of a fire, but a lack of interest
from the very same company in fire safety measures for theworkspaces where people sew their clothes.

It is time for Australian brands to face up to this reality,
and turn their practices around and ensure a living wage
for the women who make our clothes. In late 2017, Oxfam
released a report showing that the cost of the average
piece of clothing sold in Australia would increase by just
1% to ensure that workers in Australian garment supply
chains earned a living wage.12 This new investigation now
comprehensively details the reality of poverty wages for the
women who make clothes bound for Australia — and the ways
in which Australian brands both profit from this poverty andactively operate in ways that keep wages low.
Oxfam is calling for companies to take real action to
implement living wages in their supply chains, thus allowing
the workers making our clothes a chance at decent lives.
This starts with a credible commitment to living wages, anda timeframe for implementing key milestones along the way.

6. IBISWorld, “Clothing retailing in Australia: industry report”, IBISWorld, Melbourne, August 2018, viewed September 2018, https://www.ibisworld.com.au/
industry/clothing-retailing.html; IBISWorld, “Clothing wholesaling in Australia: industry report”, IBISWorld, Melbourne, August 2018, viewed September 2018,https://www.ibisworld.com.au/industry-trends/market-research-reports/wholesale-trade/other-goods-wholesaling/clothing-wholesaling.htmland
IBISWorld, “Fast Fashion in Australia: industry report”, IBISWorld, Melbourne, April 2018, viewed August 2018, https://www.ibisworld.com.au/industry-trends/
specialised-market-research-reports/consumer-goods-services/fast-fashion.html.
7. Our 2017 report noted that the industry was worth $27 billion. The industry has grown in size since 2017, rather than shrunk – but the data source haschanged reflecting a change in the given number. The revenue number changes in the latest IBIS World report are due to the change of source usedwithin the Australian Bureau of Statistics (ABS) by the analysts of IBISWorld to provide more up-to-date data.
8. Garment companies can regularly change their factory suppliers. We interviewed workers who were all part of Australian supply chains up to mid-2018.
In particular, some of the women interviewed worked for factories that supplied Specialty Fashion Group up to mid-2018. However, this company sold anumber brands to Noni B Group in mid-2018. These factories may still be supplying Australian brand Noni B Group, however some may also have changed.
Specialty Fashion Group has now changed their name to City Chic Collective and only sources from factories in China.
9. A detailed methodology for this research can be found in the annex at the end of this report.
10. Calculated by taking average earning and 286 working hours a month.Take home wage varies depending on hours of overtime worked. Wage adjusted toreflect the new minimum wage in Bangladesh. Hourly rate described here is less than the minimum wage in Bangladesh due to deductions that are madefrom her wages for mistakes and not being able to meet targets.
11. Calculated last four years (2015 to 2018) compound annual growth rate of ‘Return on Shareholders’ Funds’ of five companies, Wesfarmers (Kmart, Target andothers), Woolworths Group Ltd. (Big W and others), Premier Investments Limited (The Just Group), Noni B, and Woolworths International (Australia) Pty Ltd.
(Country Road and others). IBISWorld, viewed February 2019, https://www.ibisworld.com.au.
12. Emran & Kyriacou, 2017, “What She Makes: Power and Poverty in the Fashion Industry”, Oxfam Australia, available at http://whatshemakes.oxfam.org.au/
wp-content/uploads/2017/10/Living-Wage-Media-Report_WEB.pdf.

MADE IN POVERTY — THE TRUE PRICE OF FASHION|7

2. The human costof poverty wages
For the first time, this report looks comprehensively at the lives of the womenand men who make clothes bound for the Australian market in two key sourcing
countries — Bangladesh and Vietnam.
These countries made up almost 10% of the clothingimported into Australia in 2017, and their share of themarket is growing.
What we found is undeniable: the people making ourclothes are trapped in poverty through the wages they
are paid. They are unable to escape. This is not a one-off
story of hardship, but a systemic exploitation of people—
mostly women—who are simply trying to make ends meet.
The living wage is a simple concept. It is the idea that thelowest wage paid to a full-time worker needs to cover the
essential basics — enough nutritious food, decent housing,healthcare, clothing, transportation, utilities, childcare,education, and other essential needs, as well as somesavings for the future and unexpected events. A living wage
is not a luxury. It is a minimum that all working people shouldbe paid if they are to escape poverty. A living wage should be
earned in a standard work week (no more than 48 hours) by aworker and be sufficient to afford a decent standard of living
for the worker and her or his family.
There are various ways to estimate living wage levels,
but the two key benchmarks are the Asia Floor Wage and
the Global Living Wage Coalition (also known as the ‘Anker
methodology’).13 Both methods of calculating a living wage
are credible. However, the Asia Floor Wage is usually higher
due to differences in detail, approach and calculation.
Companies should work towards at least these levels of pay –and might see a living wage calculated using the Global Living
Wage Coalition/Anker Method as an achievable first step.14
Whichever method brands use to calculate a living wage
benchmark, it is important that workers are involved at every
stage in the decision-making process.
Ensuring collective bargaining throughindependent trade unions at the factory
level is the best way for continuous
improvement in wages – moving towardliving wages for all workers.15
It is also important to ensure that nocorners are cut so the people making
our clothes are able to eat enoughnutritious food, as well as afford adecent standard of living.
But right now, the wages paid to many
garment workers in factories supplying
to major brands in Australia mean thesebasics are far out of reach.
We spoke to 472 workers in Bangladesh
and Vietnam, who all worked infactories supplying clothing to theAustralian market.
The following statistics represent
the workers we surveyed. Here iswhat we found.

13. M ore information about the Anker methodology of calculating living wages and the Asia Floor Wage can be found in Oxfam’s publication “A Sewing Kit
for Living Wages”, 2017, available at: http://whatshemakes.oxfam.org.au/wp-content/uploads/2017/10/A-Sewing-Kit-for-Living-Wage.pdf. The
various benchmarks available for the Global Living Wage Coalition/Anker methodology of calculating living wages are also available at: https://www.
globallivingwage.org/.
14. Details of the Asia Floor wage and Anker benchmarks in annex.
15. S
 ome Australian brands, including Kmart, Target and Cotton On, have joined an initiative called ACT on Living Wages. This is a positive move. The initiative
brings companies and the IndustriALL Global Union together and aims to move towards living wages through industry-wide collective bargaining on acountry level, starting in Cambodia and Turkey. More information about ACT can be found at: https://actonlivingwages.com/.

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MADE IN POVERTY — THE TRUE PRICE OF FASHIONMIND THE GAP: WORKER’SWAGES AND DEBT LEVELSBANGLADESH

100%
 f garment workers earn belowothe living wage comparedagainst Asia Floor Wage, andGlobal Living Wage Coalition.

85%

9 OUT OF 10
felt that their income is not
sufficient or partially sufficient
to meet their needs.

87% of workers
take loans and
56% purchase on
credit from thelocal shop to fillin the income
expenditure gap.

reported that they regularly run out of money at the end ofeach month.

VIETNAM99%
of garment workers earn the
below living wage comparedagainst Asia Floor Wage16, and

7 OUT OF 10
felt that their income is not
sufficient or partially sufficient
to meet their needs.

74%
earn below living wage compared against
Global Living Wage Coalition.16

28%

37%

27% experienced
no change inwage and 5%
experienced
that their wage
reduced in thepast year.

workers have to borrow from friends,
relatives or neighbours to fill in theincome expenditure gap.

reported that their wage is not sufficient to sustain their family for the whole month.

16. S
 urvey results compared against the average Global Living Wage Coalition benchmark for region 1 (Ho Chi Minh City) and region 4(Soc Trang and Thai Binh provinces) Vietnam.

MADE IN POVERTY — THE TRUE PRICE OF FASHION|9Dhaka, Bangladesh: Garment workers seen on their way to work on the streets of Dhaka. Photo: Fabeha Monir/ .OxfamAUS

The wages the women who make our clothes are paid deny them the ability to meet theirbasic needs. 100% of surveyed workers in Bangladesh and 74% workers in Vietnam arepaid below living wages. Even if overtime income is considered, over 98% workers in
Bangladesh and 52% workers in Vietnam earn below a living wage compared against Global
Living Wage Coalition benchmarks.17 Compared against Asia Floor Wage, almost all thesurveyed workers in Bangladesh and Vietnam are earning below living wage even withovertime. On top of this, it is common that management incorrectly calculate wages
and overtime hours, and deduct salary for not meeting production targets.
In Vietnam, garment workers are usually paid at a “piecerate”. This means workers are paid a base salary, and thenan additional sum based on the number of products (such as
T-shirts) they make. The factory decides the rate workers get
per piece they produce, based on orders from buyers. Even
though minimum wages increase annually, workers explained
to us that companies often reduce the piece rate while atthe same time increase daily production targets. As a result,national minimum wage increases only affect the basic wage,
while the total income (based on the number of pieces madeby each worker) does not increase. In Vietnam, 17% of theworkers we interviewed did not have any increase in theirwages over the past five years.
The national average minimum wage in Vietnam is around$19718 per month, which is 64% of the living wage comparedagainst Global Living Wage Coalition19 and 37% comparedagainst Asia Floor Wage. Garment workers like Na in Vietnam
can only increase their wage by producing more - but toproduce more, she has to work lots of overtime. Her wage
has not increased because the piece rate has not increased
for many years. Na explained to us that, eight years ago, she
sewed belts for clothing at 2.3 cents per piece. Today, theprice is just 2.4 cents per piece. Over all of this time, Na
has been unable to support a basic standard of living.

10 |MADE IN POVERTY — THE TRUE PRICE OF FASHIONIn Bangladesh the current minimum wage for garment workers
is $12820 per month effective from December 2018, which
is 49% of a living wage.21 The minimum wage calculationin Bangladesh includes $65.60 basic salary, $32.80 for
housing expenses; $9.60 for medical expenses; $5.60 fortransportation; and $14.40 as food subsidy.22 Sadia, 28,
spelled out to us exactly what this means for her:“I didn’t save. I cannot
save. I cannot even
eat for living.”
The flow-on effect of these poverty wages is everywhere.
Workers’ rent remains unpaid or half paid regularly. Even whenseriously ill, they cannot afford to rest and loans are needed
to cover treatment expenses. They walk to work to keep travel
costs to a minimum. They buy and wear very cheap and poor
quality clothes. There is no spare money to cover a family
crisis or an emergency. Workers universally reported thatthey don’t go for outings or spend anything on recreation.
They are forced to miss out on visiting family or any relatives
because of the costs associated with travel.

Taking credit or loans from relatives, cooperatives or NGOs
is common. This is usually to cover medical treatment,
marriage costs, and education costs. Though amounts vary,
in Bangladesh there is hardly any worker who has not taken
a loan. Borrowing from relatives, friends, neighbours andco-workers is also a routine practice to afford day-to-day
living. There is a practice of purchasing in credit for almost
half the month, particularly to afford food. In Bangladesh,
87% of workers reported taking loans and 56% purchase on
credit for essential items from their local shops when they run
out of money. In Vietnam, 37% of workers reported borrowing
from friends, relatives or neighbours to fill their income andexpenditure gap.
In other words, our research shows that workers making
clothes for Australian brands experience a perpetual debt
burden. Workers often need to use their pay from the current
month to cover debts incurred in the previous month. Tension
with shopkeepers, borrowers and grocers is common as
workers are pursued to pay their debts. All this results inworkers feeling the need to work excessive overtime andnight duty to add more to their wages. The cycle of poverty
thus grinds on — with an impact on workers’ health andwellbeing, as well as a material impact on the functioning
and productivity of factories on which Australian garment
companies depend.

“SHARING MONEY” IN VIETNAM —CHŎIHŲI
Vietnamese workers take part in a “sharing
money”group to overcome their economic hardship.
ChσiHųi is a loan or money-pooling club. ChσiHųimembers contribute monthly to a common pool,which is given on a rotating basis to every memberof the club. There are two types of ChσiHųi. The firstis a group of workers who donate and take a lucky
draw to choose who takes this money first in turn.
The second type is that a group of workers donate
money to the group. Anyone who has a need for themoney most will get the money first. For subsequent
donations, those who received the money in theprevious round are required to pay a low interest rate
for the previous amount they borrowed.

Northern Vietnam: Textile worker *Mai pictured at her home in Northern
Vietnam. Photo: Do Manh Cuong/OxfamAUS.

17. Compared against wage of the surveyed workers in Bangladesh and Vietnam as a percentage of Global Living Wage Coalition benchmark for Dhaka,Bangladesh and average Global Living Wage Coalition benchmark for region 1 (Ho Chi Minh City) and region 4 (Soc Trang and Thai Binh provinces) Vietnam.
Workers earning in Bangladesh adjusted for 2018 minimum wage revision.
18. Vietnam has four minimum wage regions to reflect the cost of living in each region. Average minimum wage in Vietnam calculated by adding minimum
wages of four regions and divided by four. All monetary figures are expressed in Australian dollars unless otherwise stated throughout this report.
Exchange rate used is 1 VND = $0.000059 AUD, August 2018. Vietnam Briefing, viewed September 2018, http://www.vietnam-briefing.com/news/
vietnam-minimum-wages-on-the-rise-in-2018.html.
19. Compared average of Global Living Wage Coalition benchmark for Ho Chi Minh City (region 1) and region 4, Vietnam with national average minimum wage.
In addition to the wage, law allows for allowances, such as seniority, responsibility allowance, training allowances, toxic allowances, travel, housing,attendance, productivity bonus, periodic support, etc. In different companies, types of allowance and allowance levels are different. Workers in formal
garment companies in Vietnam have their basic wage specified in the labour contract. The basic wage must be at least the minimum wage (additional
5% and 7% can be added as training and hazardous working condition increments.) Average base wage in Vietnam is $221, which is 42% of Asia Floor
wage and 72% of Global Living Wage Coalition. Average base wage calculated by adding base wage of four regions and divided by four.
20. Minimum wage without overtime is BDT 8,000 per month.
21. Compared against the Global Living Wage Coalition benchmark.
22. The Daily Star, TK 8000 a month’, Dhaka 14 September 2018, viewed September 2018n https://www.thedailystar.net/business/news/
bangladesh-rmg-garment-workers-minimum-salary-8000-taka-announced-1633342.

MADE IN POVERTY — THE TRUE PRICE OF FASHION| 11

CHAMELI’S STORY“If I had enough today, my daughter would nothave to work … inside my mind I feel the pain,that today this daughter should have studied
and played and this daughter of mine is working.”

12 |MADE IN POVERTY - THE TRUE PRICE OF FASHION

Dhaka, Bangladesh: Garment worker, Chameli* and her daughter Lucky* pictured at their home in Dhaka. Photos: Fabeha Monir/ OxfamAUS.

A 30-year-old mother of three, Chameli earns about 51 cents an hour for her work as ahelper in a factory in Bangladesh that supplies clothes to big brands including Big W.23
Chameli left school, aged 11, to work. For the past six years,
she has worked in the garment sector. The thing Chameli
wants most for her three daughters – aged 5, 12 and 14 - iseducation, but her family’s story is one of a cycle of poverty
trapping one generation to the next.
Unable to make ends meet on her poverty wages, Chameli
recently allowed her 14-year-old daughter to leave school
to start work in a clothing factory, while her younger two
daughters no longer attend school.
Despite working an 11-hour day and regularly finishingas late as 3:00am during busy shipment times, Chameli
is paid as little as $128 a month. Even with overtime,the most Chameli takes home is $165 a month.
Chameli describes feeling sad about her daughter’s path into
the garment sector at such a young age – but says the family
couldn’t otherwise afford enough food or clothing, and she
had been living in misery by being constantly forced into debt.
The tragic death of Chameli’s only son, who was four years
old when he drowned in an open gutter on a building site,
and a heart attack suffered by her husband in the wake of thetragedy, began a spiral into debt. It took two years for Chameli

to pay back an initial loan and while the family are now debt
free, this is only because her daughter has started to work.
The family of five live in a crowded compound on the outskirtsof Dhaka in a 3.6m by 2.4m room, where the two youngest girls
sleep on the floor. They share two stoves and one bathroom
with five other families living in similarly cramped anduncomfortable conditions.
The family’s diet consists mainly of mashed potato andspinach, with fish once or twice a week and meat justonce a month.
Despite Chameli’s husband and daughter now working
and contributing to the household’s income, the family
is barely scraping by.
“The thing that motivates me the most … I just think if I don’twork, my children won’t get any food, then I give the strength
to myself.”
But if paid a living wage, Chameli envisages there would bemany changes – her daughters would go to school and there
would be enough food to put on the table.

“There would be a lot of changes. I would
feel peaceful then. I would be able to eat
and manage my children’s education.”
23. C
 alculated by taking average earning as reported by Chameli and 286 working hours a month. Wage adjusted to reflect the new minimum wage in
Bangladesh .Hourly rate described here is less than the minimum wage in Bangladesh due to deductions that are made from her wages for mistakes
and not being able to meet the target.

MADE IN POVERTY — THE TRUE PRICE OF FASHION| 13

FOOD AND NUTRITIONBANGLADESH

VIETNAM91%
 f garment workers cannot afford enoughofood for themselves and their family.

Over

20%
of garment workers cannot afford enoughfood for themselves and their family.

Poverty wages mean many of the women who make our clothes, and their families,
do not have enough to eat.
In Bangladesh, 91% of garment workers told us that theirincome is simply not enough to feed themselves and theirfamily for the entire month. This means surviving only on
pulses, rice and potatoes — and sometimes eating a sickly
mix of old, fermented rice with chili in order to feel fuller
throughout the day. Called “watery rice”, the fermentationin this mix also makes it mildly alcoholic, and women use it
to numb some of the pain of sitting for hours a day at theirsewing workstations.

For some women, even affording a limited, insufficient
diet can be a stretch. Around 33% of garment workers weinterviewed in Bangladesh told us that they miss meals or
eat inadequate meals regularly, while a further 10% told us
this happens from time to time. Many women spoke of having
to purchase simple items on credit every single month. Thismeans they and their families are pushed further into a cycleof poverty and debt.

Many women told the researchers of their want to have more
healthy diets for themselves and their families. But their pay
only allows them to buy items like fish once a month. Chicken,
beef and other types of nutritious meat are seen as a luxury.
Shima, a 26-year-old garment worker in Dhaka, told us thatwhen her salary is paid, they buy small, cheap fish for a few
days, but “I cannot remember if I ate beef at all in the lastyear. It is too costly.”

This extreme situation of malnutrition and lack of funds topurchase basic food items is punctuated even further for
women with children, and for older women. Many older womenmust keep working simply to feed themselves, as they haveno savings. And women with young children face a range ofother stresses. Tania, 21, has a four-year-old child. She told
us of the hardship of trying to feed both her daughter andherself, saying that

“If I am to look [after] my baby, thenI cannot feed my stomach … [but] if
I am to take care of my stomach,then I cannot feed my baby”.
14 |MADE IN POVERTY — THE TRUE PRICE OF FASHION

Dhaka, Bangladesh: Garment worker, Chameli* and her daughters Bipasha* (L), Lucky* (R), Rupa* (C)eat lunch at their home in Dhaka. Photo: Fabeha Monir/ OxfamAUS.

Tania made the heartbreaking decision to send her child over
250km away, to live with her parents in their village. Thisway, Tania is able to send as much money as possible to herdaughter and does not have to worry about her while she isat work in the factory. But this is very hard — she only gets tosee her daughter two times a year at most. And after fallingill herself, Tania has been advised by a doctor to improve her
own diet by eating eggs and milk every day. But Tania cannot
do this — she needs this money to send to her daughter.
In Vietnam, the comparatively higher wages mean that thesituation is less extreme, but a sizeable 28% of garment
workers still reported that their wage was just not enough tosustain them and their family for the entire month. Of these,

50% reported that they handle this by borrowing money for
food, which increased their family debts, and 6% reported
that at the end of the month, they eat only rice.
The long hours of work for many garment workers in Vietnam
also causes nutrition problems, as workers struggle to makeas many pieces as possible to meet their targets and increase
their pay. Hau, a 27-year-old garment worker in Vietnam,
reported that she spends more on food for her children thanherself, and spends little on her own food, in order to help pay
off the family’s debt. When she brings food into the factory tofeed herself during the day, Hau’s allowance is cut. But Hau
takes the risk, otherwise she would go hungry.

MADE IN POVERTY - THE TRUE PRICE OF FASHION| 15

RITA’S STORY“What will I eat and how will I make my son get
an education?”

16 |MADE IN POVERTY - THE TRUE PRICE OF FASHION

Dhaka, Bangladesh: Garment worker Rita* stokes the fire that she prepares her meals on at her home in Dhaka. Photos: Fabeha Monir/ OxfamAUS.

Rita is a helper in a factory near Dhaka, making clothes for Big W and other brands.
Even when working seven days per week, Rita constantly grapples with how she canafford the basics.
Rita has worked in the garment sector for 14 years, forced
to raise her three children as a single parent after her
husband left the family and remarried. Reflecting on raising
her children, Rita recalls times when they were all barely able
to eat, buying leftover cooked rice to feed her family.“I used tofeel very bad inside my mind, my children wanted to eat, but
without money how will I feed them,” Rita remembers.
Her two daughters are now married, living with their husbands
and children. A desperate lack of food for herself and her son
for an entire month prompted her reluctant decision to send
him to his father and step-mother when he was aged 13.
Rita now sends about a third of her monthly wage – whichranges from just $43 to $56 a month24 – to contribute to theliving and education expenses of her son, who she only getsto see on national holidays. Rita’s biggest priority remains
her son’s continued education, even though her expenses
outstrip her wages each month.
Now living alone, Rita’s battle to have enough money to pay
for food continues. With less than $3 a day available to spend
on food 25, Rita’s staples are rice, eggplant and potatoes –she will buy chicken on the odd occasions she can afford iteach month and is only able to eat beef once a year during
a religious festival when her landlord sacrifices a cow andgives her a small portion.
Rita’s poverty wage means many other hardships – she lives
in a 2.5 by 2.5 metre room, big enough for only a bed andsmall shelf. The room is located next to a communal cooking
area and not far from an area where rubbish is dumped in theopen, forcing her to shut the window to her stuffy, tiny room
to avoid the stench and smoke.
Rita also suffers many health issues, but taking time off work
is not an option. She tells of a time in 2009 when she was sickand malnourished and told to take time off to recover. Whenshe returned to work, she discovered she had been dismissed
and had to re-apply for her job – stripping her of years
towards her long service leave.
Though worried she is being pressured to leave her job so
she can be replaced with a younger worker on a cheaper
wage, Rita is resigned to working in the garment sector
until her son’s education is completed.

“I work hard for my son, if I can do thisupbringing well, at the end of my life,
when I will grow old and I won’t be able
to work, then my son will be able tofeed me a little.”
24. Adjusted to reflect the new minimum wage in Bangladesh. Take home wage varies depending on hours of overtime worked.
25. Multiplied by 1.51 of what Rita reported on her food expenditure to be in line with the new minimum wage in Bangladesh.

MADE IN POVERTY — THE TRUE PRICE OF FASHION| 17

HEALTH AND IMPACTS OF OVERTIMEBANGLADESHHEALTHOVERTIME

99%

of garment
workers regularly
work overtime.

72%

55%

work more than 3 hoursof overtime regularly.

77%

84%

feel that they cannot say
no to overtime or night duty.

66%

of garment workers
cannot afford
proper treatment
when they get sick.

do not take sick leave as needed.

reported that pregnant womenare subject to discrimination,with cases of extra hours having
to be worked to offset maternity
leave, as well as extra pressure.

VIETNAMHEALTHOVERTIME

65%

of garment
workers regularly
work overtime.

52%

are not aware of the laws about
overtime hours and payments.

18 |MADE IN POVERTY — THE TRUE PRICE OF FASHION

53%
94%

 f garment workersocannot afford
proper treatment
when they get sick.

do not take sickleave as needed.

Falling into soaring debt, getting little or no treatment for serious medical problems,and being penalised for taking any time off — this is common when it comes to healthand sickness for the women who make our clothes. Add to this long working hours of
up to 18 hours a day,26 with little or no breaks, and the health problems for garment
workers compound.
In Bangladesh, 72% of garment workers told us they cannot
afford proper treatment when they get sick, and in Vietnam
this figure was 53%. They simply do not earn enough to pay
for healthcare.27
Chameli, a garment worker in a family of five in Bangladesh,
told us of the hardship she has faced since her husband
became ill, and her son passed away. Chameli took out aloan she could not possibly pay back to cover the costs forher son’s funeral and husband’s medical treatment. To makematters worse, her mother-in-law also became ill, adding
more pressure to the already precarious situation. This
problem of falling into a cycle of debt and the inability to pay
for desperately needed health care is common. In yet anothercase, Shima (also from Bangladesh) has been unable to pay
for essential treatment for a condition that has eaten heraway at her leg and foot. Today, she has lost her entire rightfoot. Shima skips meals or only eats a tiny amount of rice andpotatoes in order to pay for her treatment, which is still notenough to cure the disease affecting her limbs. Despite her
condition, Shima tries never to miss a day at the factory as
her attendance allowance will be cut.
The long working hours affect many garment workers. They
reported to us stories of fainting, feeling dizzy and worrying
about not being able to leave their workstations to drink
water throughout the day. Even many of the toilets in thefactories are not usable, Selim working as a supervisor in
Bangladesh told us “There are 10-15 toilets but only three
toilets has light. Here toilet condition is so bad that it iseven not possible to clean. Doors are broken, no bulb.”28

Dhaka, Bangladesh: Garment worker Rita* holds a handful of medicine at her home in Dhaka. Photo: Fabeha Monir/ OxfamAUS.

26. The research found that the excessive overtime is more profound in Bangladesh than in Vietnam.
27. Some workers in Vietnam are covered by health insurance.
28. None of the supervisors, managers, owners in the report are identified by their real name for their wellbeing and the protection of their employment.

MADE IN POVERTY — THE TRUE PRICE OF FASHION| 19

Dhaka, Bangladesh: Garment workers seen on their way to work on the streets of Dhaka. Photo: Fabeha Monir/ OxfamAUS.

In Vietnam, depending on the factory, workers get 5, 10 or
15-minute breaks in the morning and afternoon. In reality, as
wage is based on piece rates and targets, workers often do
not take these breaks and they work through. If they want to
go to the toilet, they are also quick to return to work so as
to not affect the output of the line and of themselves. One
Vietnamese worker, Nhan, explained that her factory has aregulation for workers to take a break of 10 minutes in themorning and 10 minutes in the afternoon, but she and otherworkers often do not take the break and keep working to earna little more by stitching a few more garments. She explainedthat “every worker is keen on doing this because they can getsome more money rather than 10 minutes break, which seems
to be meaningless”.

To keep their heads above water,99% of
garment workers in Bangladesh and 65%
in Vietnam reported that they regularly
work overtime. Added to this, many — 84%
in Bangladesh — feel that they cannot say
no to extra hours of work.
Workers often have no option but to accept and do overtime
regularly. The law says working overtime is voluntary, but
in reality,they have no choice. Sewing line supervisor,
Farook from Bangladesh said during an interview, “No, we
never asked permission from the worker in connection withovertime. If they can’t complete task in due time they musthave to do overtime.” Barsha, 21, who works as a helper,
sleeps on the factory floor when work pressure is high. She
told us; “When there is a night duty, I cannot say no. Day shift

20 |MADE IN POVERTY — THE TRUE PRICE OF FASHION

ends at 8pm, then [there is] two hours break. I need to resume
work by 10pm. Night duty usually continues till 2–3am at latenight. Women colleagues, who are from very nearby place,
go to home. I do stay in the factory. Eight to 10 of us sleep
on a plain cloth in the factory floor underneath the table.”
The long hours of overtime without breaks takes its toll on
workers’ bodies. Most garment workers need to be able totake sick leave, but the reality is that many feel they cannot
take it. As many as 94% of workers interviewed in Vietnam felt
they could not take sick leave when they needed to29 ; 77% ofworkers in Bangladesh also felt this way. It is not surprising,when many factories operate all hours. One supervisor in
Bangladesh told us: “[There is] no overtime payment. Workers
get fixed salary. Even on Friday they need to work for 12 hours.
They work all 30 days a month. There is no holiday.”
The toll on workers’ health is further compounded by often
being unable to access other forms of leave. Among workers
in one factory in Vietnam, it was reported that there is aconcept of “selling annual leave”.This means that when ateam fails to complete their weekly or monthly production
target, the team leader asks the workers to work overtime and“sells” workers’ annual leave to the company, meaning thatworkers are “voluntarily” not taking their owed leave. Tania,
a worker in Bangladesh, during her interview divulged herdisappointment at not being granted any form of leave saying:“You will only get leave when someone near to you is dead.
Otherwise, if anyone even says someone special to him/heris seriously ill [and] has got hospitalised, they will ask you,
‘Where it is? What is the name of the hospital?’ Even they will
ask for his/her cell number. But they will not allow you leave.”
Sometimes, workers also chose to work extra hours and forgo
leave to get extra money — despite the impact on their health.

In Vietnam, 75% of workers said that they do not takeannual leave so that they can earn extra money.
Pregnant garment workers and new mothers face particular
health concerns. A lack of a culture of taking leave whenneeded — particularly in Bangladesh — meant that 66%
of workers reported some form of discrimination towards
pregnant workers. And 14% of workers also reported that
pregnant women needed to offset maternity leave byworking at weekends, festival times and extra hours.
According to Masum, a supervisor of sewing lines:“If the management comes to know that a worker ispregnant, she is fired immediately.”

All of this adds up to a workforce that isoverworked, tired, malnourished, stressed,
sick, unable to afford treatment and afraid
to take time off — for fear of losing theiralready poor salaries.

In Vietnam, there were also concerns with the long working
hours resulting in new mothers experiencing pain and having
no space to express milk. One new Vietnamese mother told
us of running home at lunchtime to feed her baby, and thenworking extra hours at night to try to make up for the wage
loss. Another new mother from Vietnam shared a distressing
story of overtime taking its toll on her, explaining that
although she needed to go home to feed her baby, no-one
would listen to her and she had to stay late at work. She said,“I feel tired, but I still have to stay,
go home late; no-one listens to us.
I have to feed my baby.”
29. This include when they suffer from fever, flu or headache.

MADE IN POVERTY — THE TRUE PRICE OF FASHION| 21

SHIMA’S STORY“I took the loans because after spending
on food for my family, there was nothing left.
When visiting the doctor, there is no treatment
if there is no money.”

22 |MADE IN POVERTY - THE TRUE PRICE OF FASHION

Dhaka, Bangladesh: Garment worker Shima*, who lost her foot to an infection, pictured at her home in Dhaka. Photos: Fabeha Monir/ OxfamAUS.

Shima works as an operator making T-shirts for a factory that supplies to global brands,
including Big W. The 26-year-old works six days a week – at busy shipment times several
months a year, her 16-hour day finishes at midnight.
Yet the most Shima is paid each month is just $16930 - leaving
her and her family continually in debt as they struggle tocover expenses, which are constantly stretched by Shima’s
serious health issues.
Growing up in a village in Bangladesh, where her father wasa farmer and there was no work for women, Shima was aged
just seven when an infection started to eat away at oneof her feet.
Her family were unable to afford treatment and by thetime Shima was 10, she had lost her entire foot. Without
any money for a prosthetic, Shima walked on her wounded
limb for many years.
Knowing that she would need ongoing medical treatment andagainst the pleas of her family that they stay together, Shimaleft home to look for a job in the clothing factories in Dhaka.
Shima’s disability proved a barrier to employment for
many years, but she was determined – she developed her
seamstress skills on a machine in her home and used thelittle money she had to pay for lessons before finallygetting a job two years ago.

Shima could still not afford to cover her living and medical
expenses on her own, so her mother, father and three of her
siblings eventually relocated to Dhaka so they could get jobs
– her younger brother and two younger siblings also now
work in garment factories.
Recently, Shima’s co-workers collected enough money toallow her to see a doctor. With the help of a substantial loan
and after years of living in pain, Shima was finally able to pay
for an artificial foot.
Shima’s elderly father has since moved back to their village,
but she, her mother and three younger siblings continue tostruggle. The five family members live in a cramped, small
concrete room, where the women sleep on a mat on the floor.
During the rainy season, the roof leaks and the family haveto mop up during the night.
Shima recalls her family surviving on one meal a day forseveral months when they first reunited in Dhaka - and she
still often goes to work without food because she cannot wait
to use the overcrowded shared kitchen in their compound.
If Shima were paid a living wage, she sees an end to the loansthat are keeping her family in debt.

30. Adjusted to reflect the new minimum wage in Bangladesh. Take home wage varies depending on hours of overtime worked.

MADE IN POVERTY — THE TRUE PRICE OF FASHION| 23

HOUSING AND LIVING CONDITIONSBANGLADESH

LIVING CONDITIONSOVERCROWDING
Average number ofworkers living in one room:

(3)

96%

3.2m

While 96% of workers reported
an increase in rent the past year,
only 64% reported any increasein wages during the same time.

2.6m

Average room size:

Compared to the average home sizein Australia31:

189.8M276%

of people live in
rented housing.33

58%

of housing leaks when it rains.

have no running water inside their home.

Average number of people who share one water source (tap or tube well):(16)

VIETNAM

24 |

23%

44%

67%

of workers live insemi-permanent or
temporary housing.

reported that they are notsure if the water they areusing is safe.32

of workers own
their own home.

MADE IN POVERTY — THE TRUE PRICE OF FASHION

Oxfam’s research shows that most of the women who make our clothes simply cannot
afford a decent standard of living.
In Bangladesh, overcrowding is stark, with many workers
sharing one single tiny room – and often sleeping on thefloor. Access to water sources and cooking facilities islimited, shared and often outside, with lines to use thetoilet and often also to cook. In the heat of Bangladesh,
this overcrowding and lack of facilities can also resultin the spread of diseases.
Barsha, a worker in Bangladesh, explained that she shares
one room with five of her cousins, including one married
couple. The room is just 3.5 metres by 3 meters in size — thesize of an average bedroom in Australia — but this is all the
space the five adults, young men and women, have to rest.
The other 27 rooms in their living quarters are shared by 80
people. There are only 10 gas burners for cooking and five
toilets for all 80 people to share. Barsha is 21 and she wishes
she could move somewhere with more space. She dreams of
being able to purchase simple items such as a freezer to store
food. “It is because of money problem I am to stay in a very
adverse situation with the cousin’s family. It is too hot, [andmy] cousin and cousin’s wife stay in the same room; there

is no privacy,” Barsha told us. “I often dream to buy a TV,
a freezer. I cannot.”In Vietnam, the majority of interviewed workers (71%) werelocal – they had not moved to a city or new place to work in
the garment industry, unlike in Bangladesh. We found that
67% of workers interviewed in Vietnam owned their own small
homes. However, a sizeable 23% of workers lived in semipermanent or temporary houses, and 44% reported having to
use water from a well or harvest rain water, without knowing
if it is safe to use. Low wages also mean that for garment
workers to make improvements to their living conditions,they have to sacrifice other essential items or go into debt.
Hau explained to researchers that the roof of her small houseoften leaked when it rained. She and her husband share thesmall home with their three young children. They had to takeout a sizeable debt of 500 million dong (AUD $29,500), frombank as well as from family, to rebuild the house. Her monthly
average wage is 5.5 million dong (AUD $324.50), meaning she
can’t save anything from her income after covering the basics
and repaying the loan installments.

Dhaka, Bangladesh: Garment worker Shima* prepares a meal at the communcal kitchen where she lives. Photo: Fabeha Monir/ OxfamAUS.

31. https://www.businessinsider.com.au/the-apartment-boom-has-driven-average-australian-home-sizes-to-a-20-year-low-2017-11
32. They use mostly well water and are unsure if it is safe.
33. Migrant workers come from rural areas to urban areas to work in garment factories. They often stay in dormitories (boarding houses)
or rented houses.

MADE IN POVERTY — THE TRUE PRICE OF FASHION| 25

MINH’S STORY“We can borrow some money to build a toilet but
how to repay it is a big problem. I do not dare toborrow money to build a toilet because I have myson’s school fees to pay.”

26 |MADE IN POVERTY - THE TRUE PRICE OF FASHION

Northern Vietnam: Garment worker Minh* at her home with her son Tuan Anh*, husband Chuong* and her mother-in-law Quyen*.
Photos: Do Manh Cuong/OxfamAUS.

Minh lives in a rural area in Vietnam. She sewed sleeves onto jackets for Australianclothing brand Specialty Fashion Group and other brands.34 Minh is the sole income earnerfor the family, supporting her husband,35 son and mother-in-law, so she is particularly
aware that she can “make money when I’m healthy, but my family will have no one to rely
on when I’m sick.”
Their home is very modest. They collect rainwater in a tankthrough a pipe connected to the gutter on the roof, using thiswater for cooking and bathing. For washing clothes and otherpurposes they collect water from a well. Minh tells us “there
haven’t been any incidents but I do have concerns about thequality of the water we use.” She isn’t paid enough to afford
running water, despite knowing “everyone wants clean water
for their daily lives.” Minh would like to repair her kitchen, buteven simple modifications are out of reach financially.
The family have no toilet and use a makeshift outhouse. Theyuse ash to cover the waste and when it accumulates, collectit in a bucket and dump it in a nearby field. Minh knows this is
not sanitary but she feels she has no choice. Minh notes “wecan borrow some money to build a toilet but how to repay it isa big problem. I do not dare to borrow money to build a toilet
because I have my son’s school fees to pay.”
If Minh was paid a living wage, she would first build herfamily a toilet. But her main focus is her son’s future, saying
if she was paid more money, “I would invest more in myson’s education. I would send him to extra classes.”Like allmothers, the ongoing expenses for her child is her biggest
matter of concern.

34. While Minh’s factory supplied Specialty Fashion Group at the time of this research and interview, the company sold many of their brands, including Rivers,Katie’s and Millers, to Noni B Group in 2018. Specialty Fashion Group no longer source from Vietnam for its remaining brand. Minh’s factory may now be a partof the Noni B Group supply chain. Specialty Fashion Group is now called City Chic Collective, and only sources from factories in China.
35. Minh’s husband passed away one month after the interview.

MADE IN POVERTY — THE TRUE PRICE OF FASHION| 27

EDUCATION AND FAMILYBANGLADESHEDUCATION FOR WORKERS’ CHILDRENGARMENT WORKERS EDUCATION

85%
of garment workers reported leaving
school early, as their family could
not afford it.

40%

reported that they started
working in the garment industry
before 18 years of age.

44%

reported they could not get a
promotion because of lack of
education and skills.

60%

expressed interest to learn new
skills but of these almost all (95%)
reported that they cannot afford it.

89%
of garment workers reported theirwages are not enough to covereducation costs for their children.

17%

reported their children have had tostop school early due to low wages.

33%
do not live with their children, withthe vast majority (93%) of these livingin the home village of the parents.
REASONSzero
respondents reported theywanted their children to workin the garment industry.

78%

because of a lackof sufficient income.

20%

because there is no one to lookafter their children while working.

Respondents in Bangladesh and Vietnam each present a different picture on their ability
to cover the costs of education for children.
In Bangladesh, 89% of workers said their wages are notenough to support education of their children, and 20% said
the same in Vietnam. For Vietnam, even though primary andsecondary schooling is provided free by the state, a sizeable
20% is struggling to afford other basic costs associated witheducation. We also found that, after basic food and shelter,

28 |MADE IN POVERTY — THE TRUE PRICE OF FASHION

the biggest concern for the women who make our clothes
was safety and education for their children in both countries.
Tellingly, not a single parent reported that they wanted
their children to work in the garment sector in Bangladesh,and 43% felt the same in Vietnam. This signals the need forchange in the sector, across the board.

VIETNAMGARMENT WORKERS EDUCATION

90%

of garment workers havecompleted secondary
school education.

43%

reported they could not geta promotion because of lackof education and skills.

EDUCATION FOR WORKERS’ CHILDREN

20%

of garment workers reported
that their wages are notenough to cover education
costs for their children.

42%
do not want their children
to work in the garment industry.

In Bangladesh, children dropping out of school to shoulder
the family burden is very prevalent. Chameli ’s experience
shows this clearly. She explained with sadness that none ofher daughters — aged 5, 12 and 14 — attend school. While
primary school is free in Bangladesh, lack of access to closeby schools, travel costs and other expenses such as uniforms
are often prohibitive. Illness in Chameli’s family, the prospectof again falling into debt and her very low wages meant thefamily needed more income to survive. Her teenage daughter
has now started work in a nearby garment factory.

Poverty wages force children, particularly
girls, out of school and in to work.
Chameli told us that she simply could not bear her daughters’
education costs amid all her other expenses. So the cycle of
low wages, poverty and barely scraping by continues.
Many of the women we interviewed in Bangladesh started
working in the garment industry as children themselves – astaggering 40%. For most, this was again because their own
parents realised the education costs would be impossible.
Barsha, for example, explained she came to Dhaka first at
the age of 13 to work in a garment factory for a six-month
stint. She then returned to the city again for work once she
was over 18 and began in the factory she works in today.
Of course, while many young people below the age of 18 dowork in many countries, including in Australia36, this should
never be because they are forced to through financial
hardship and despite wanting to continue education.
Under Article 28 (b) of the United Nations Convention on
the Rights of the Child, countries must: “Encourage thedevelopment of different forms of secondary education,
including general and vocational education, make themavailable and accessible to every child”. In the UN Convention,
child refers to all people under the age of 18 years.

Women in both Bangladesh and Vietnam also struggle withthe cost of up-skilling and further education for themselves.
Many women in each country told us that they struggle to get
promotions due to a lack of education, and in Bangladesh
60% of women reported that they would like to learn new
skills; however, of these, almost all (95%) reported that they
simply could not afford it. Rita, one Bangladeshi garment
worker, told us of how she has worked in the same job for 10
years with no promotion, and that she feels this is because
she can only write her name. She is unable to read contracts
or negotiate for herself. Hauin Vietnam told a similar story,
having worked in the same factory since 2010. With no extra
skills or post-secondary educational degree, Hau explainedthat she is unable to get a higher position.
It’s clear that an overwhelming majority of garment workers
in Bangladesh, and a significant number in Vietnam, struggle
with this basic need to be able to cover costs of education
due to their low salaries.Ensuing payment of the current legal
minimum wages to workers in the fashion supply chain is notgood enough.
Australian brands need to ask themselves if they want tobe associated with generations of children losing out on
education — in part because they are failing to ensure thatthose children’s parents are being paid living wages.
Turning this around means taking concrete steps, now,
to commit to living wages and to start on the road to
implementation.

36. In most states in Australia, young people can start part-time work before the age of 15 years; however, there are a range of restrictions on types of workand hours that are allowed to be undertaken. A special permit is generally required for any work that is to occur during normal school hours and full-timework is generally not allowed. After 15 years of age, permission is also often required for young people to be able to leave school and work full time.

MADE IN POVERTY — THE TRUE PRICE OF FASHION| 29

TANIA’S STORY“I feel so miserable being
a mother, I can’t meet mychild, my daughter cries
without me.”30 |MADE IN POVERTY - THE TRUE PRICE OF FASHION

Dhaka, Bangladesh: Garment worker Tania* holds a small photograph of her daughter who lives with her parents outside of Dhaka.
Photos: Fabeha Monir/ OxfamAUS.

Tania is a 21 year old Sewing Operator in Central Bangladesh. She makes clothes for Kmartand other international brands.
Tania lives alone in a tiny rented room, separated from her
husband who left her when she was two months pregnant.
In need of work to support her family after the death of her
brother, Tania and her baby moved to Dhaka for a job at a
garment factory. Initially, her parents joined her to look after
the child but rent for a room large enough to fit the wholefamily was out of reach. She explains: “Here, there is no-one
to look after my baby. I am to buy everything here. If I keep
my baby here, I will need to bring my parents together. Then,
I will need to hire a large room. My expense will increase
then. I cannot even afford my current status of living withmy income.” There was no choice for Tania’s parents but
to return to their home village 250 km away, taking Tania’sdaughter with them.
Tania only sees her now four-year-old daughter twice per
year. She’s only allowed leave from work for the two Eid
festivals, and even if she wanted to visit her more often,
it’s an expensive 48-hour return journey by boat. She says,“I feel so miserable being a mother, I can’t meet my child,

my daughter cries without me.” Tania longs to spend time withher daughter, and is very lonely without her, particularly on
her one day off each week.
Tania sends most of her meagre salary home to her parents topay for her daughter’s basic needs. Her entire life centres onproviding a good life for her child. She’s worried she doesn’t
provide enough money each month for her daughter to eat
nutritious food, or to study in a good school. “I want her life
to go nicely and smoothly… I will get my child into a goodschool, I will make her study properly.” She dreams of building
a house for her parents, and buying two cows to support their
future. Her daughter is always in her thoughts. She doesn’twant her daughter to have the same life as her – “the world of
garment[s] is full of hardships… you get abused with words alot, you have to work hard, that is why I do not want my childto work in garments.” For Tania, a living wage would mean her
parents and daughter could visit each month, or she could
travel to see her daughter more often.

MADE IN POVERTY — THE TRUE PRICE OF FASHION| 31

3. Adding fuelto the fire:

WAGE THEFT, JOB INSECURITY,ABUSE AND INABILITY TO ORGANISE
Workers trapped in debt and earning poverty wages also face a number of otherunfair practices — and their low wages make them more susceptible to exploitation
and accepting abuse as part of what they must “put up with” to keep their jobs.
This section explores some of these unfair practices and what we found.
Given the effort that Australian brands put in to having strong
Codes of Conduct, and the auditing systems they use, it ishard to believe that big brands and buyers are not aware of
the gravity and range of issues that flow from the poverty
wages paid to workers in their own supply chains. Companies
like Kmart, Big W and Cotton On – and many others – havestrong Codes of Conduct that require upholding fundamental
rights and principles at work in the factories from which

they source. This includes ensuring that legal wages are paid,
violence and abuse are not acceptable in the workplace, andthere is no excessive overtime. However, our research showedthat the system of using Codes of Conduct and auditing inorder to address human rights abuses in Australian garment
supply chains is categorically failing.37 Brands need to examine
their practices, and how they can modify their actions to lower
the instances of these abuses in their supply chains.

IMPACT OF LOW WAGESPERSISTENT
LOW WAGE

32 |Leading to

EXCESSIVE WORKAND OVERTIME

Leading to

TRAPPED INTO POVERTYAND POOR WELL-BEING

LIFE AND LIVELIHOODS

AT WORKPLACE

Insufficient rest

Job insecurity

No time for recreation

No time or choice

No time for Children

Restricted Freedom of Association

Inappropriate housing

Poor health

Inadequate food

Poor safety and security

Poor health

Poor wage and wage cuts

Lack of or no education and skills

Unforeseen loss accidents/injuries

No savings

Absenteeism

No/less capacity
to absorb shocks

Low productivity

MADE IN POVERTY — THE TRUE PRICE OF FASHIONHigh turnover

WAGE THEFTBANGLADESH

56%

of workers reported that theyexperience wage cuts regularly.

43%

reported inaccurate
calculation of working hours.

VIETNAM

14%

of workers are unsure whether
overtime is always paid when
they work after hours.

It is tragic when wages are deducted unfairly for workers already paid so little. These
unfair deductions often mean workers are paid even less than the legal minimum wage.
In Vietnam, factories predominately use performance andproductivity-based wage payment (piece rate) to stimulate
workers to produce more. Among all the interviewed workers,
no-one knew how to calculate their piece rate. They have no
option but to accept whatever piece rate and targets are set
by the management, however low and unfair. According to
the union officers we interviewed, the common complaints
and issues raised by workers are about low piece rate. “If wehave any complaints, we speak directly with the supervisor
or manager, but only within a limit …. in general, we have toaccept [it],” commented a sewing operator when we asked
about low piece rate and target.
In Vietnam, 14% of workers reported that they are not evensure whether they are paid any overtime to make up for the
unrealistic production targets. Hau explained that she isrequired to work extra hours without any extra pay if shecannot meet her set production target. She has smallchildren and finds managing this overtime very difficult.
In Bangladesh, 56% of workers reported that theyexperienced wage cuts regularly; another 43% foundinaccurate calculation of their working hours. Not meetingtargets, absence (whether or not this is for a good reason
such as illness), late attendance, poor quality, productmistakes and refusing to do overtime or night duty werereported as the main reasons for these wage cuts. Wage cuts
such as this are not legal in Bangladesh; however, we foundthat they occurred for more than half the workers interviewed.
Sadia works in a knit factory in Bangladesh from 9am to 8pm
and said, “No overtime is calculated. Two extra hours of work

is built-in. When need to work more extra time, they will callin the names who need to stay.” Chameli, working as a helperin the sewing section, reported: “Employer allows maternity
leave in our factory, but they do not pay for that. They play atrick on the worker. Workers need to sign on a white paperand go for leave.” After coming back, she finds that she
resigned before taking leave and she needs to join thefactory again. Such unfair practices deny women fromtheir maternity benefits.

WAGE TACTICS AND TRICKS IN VIETNAMIn Vietnam, almost all the companies we surveyed
apply fingerprint attendance checks. Some workers
told us that when they scan their fingerprints,
sometimes it does not appear in the system. Even
though they work a full day and get it confirmed bytheir supervisors, only half a working day is counted.
According to the law, employers need to pay a social
insurance premium based on each worker’s wage andallowances.38 But in reality, when unions and workers
representatives look at pay slips from workers,
it’s clear that many workers only have their social
insurance premiums paid based on the minimum wage
and seniority allowance, ignoring all other allowancesand supplements. This is a common trick to keep thesocial insurance premium low, denying workers thisimportant safety net.

37. G
 arment companies in Australia source garments from developing nations. At the same time, there are widespread global stakeholder concerns about
the use of child labour, inadequate health and safety standards and poor working conditions at many of these production locations. Social audit is atool used by companies to monitor working conditions and to ensure that manufacturing takes place in a humane working environment.
38. A
 ccording to the law in Vietnam, manufacturers are to pay social insurance premiums for employees so that workers are entitled to benefits suchas retirement, medical care, unemployment, maternity benefits, and other benefits.

MADE IN POVERTY — THE TRUE PRICE OF FASHION| 33

JOB INSECURITY
Job security and stability is a dream for many of the women who make our clothes.
The women interviewed for this study live in constant fear of losing their livelihoods.
More than 82% of the workers and 100% of the supervisors interviewed in Bangladesh
told us that management can terminate any worker at any time. In Vietnam, more than
one in four workers are in constant fear of losing their job.

BANGLADESH

VIETNAM

More thanMore than

8/10

workers reported that they
constantly fear losing their job.

Because these workers cannot afford to lose theiremployment, they keep their heads down and pushtheir bodies and minds to the limit day after day.
One supervisor from Bangladesh told us that:“Workers are
fired anytime from the factory without any benefits, if they
do any simple mistakes. It does not matter even if the worker
has worked for five years or more in the factory. The victim
becomes helpless. If any workers can’t fulfil the target he/
she has to stay in office until complete his/her tasks. If theworker doesn’t want to do the work, they are threatened
and told not to come next day”.
Another supervisor told us that if any worker is absent,
the next day the assistant production manager will keep

1 /4

workers reported that they
constantly fear losing their job.

them standing for one hour, then either allows them to join
work or sacks them on the spot.
Their appointment letters or employment contracts offer little
protection to them. In Vietnam, most of the workers (about90%) are not aware of the job grade, set working hours andthe annual leave provisions in their appointment letters. In
Bangladesh, more than half of the workers interviewed
did not know what was in their appointment letter at all,because they either never received it or did not understandit. Clearly a lack of understanding of rights for these workers
is an advantage for a system that works through the threatof termination of employment at will. Brands sourcing fromthese factories often turn a blind eye to this as they indirectly
benefit from this system.

Dhaka, Bangladesh: Garment worker
Shima* photographed on her homesewing machine in Dhaka. Photo: Fabeha
Monir/ OxfamAUS.

34 |MADE IN POVERTY - THE TRUE PRICE OF FASHIONVERBAL, PHYSICALAND SEXUAL ABUSE
Any exploitative system will include elements of abuse, and this is no different for the
global supply chains of Australian garment companies. Poverty wages and spiralling debt
play a large part in making workers feel that they must accept abuse in their workplace,or the risk of losing even their meagre salary.

BANGLADESH

VIETNAM88%

of workers reported
regular verbal abuse.

35%

of workers have experienced
physical abuse such as
being hit or pushed.

28%

of workers reported
experiencing sexual abuse,including requests forsexual favours.

Talking with workers, we found that line managers andsupervisors regularly shout, yell, curse, and threaten physicalviolence, including pounding their fists onto workstations.
This is especially used as an aggressive tactic to try to speed
up the flow of work and meet deadlines and production
targets set by garment companies. With ever-reducing
prices and shortening delivery times in the world of fast
fashion39, such aggressiveness is very common — especiallyin Bangladesh where 88% of workers reported verbal abuse.
Slang and vulgar language are often used for workers when
they cannot meet targets, make mistakes, talk with otherworkers, or participate in trade union activities, and often
when they ask for leave or to simply use the toilet. As one
worker in Vietnam put it: “Yelling is a common practice inthe company. The management slap on the table, on thechair, use bad words... It happens every hour, every day,every minute.”
When we asked the supervisors about verbal abuse – they
admitted that they do use abusive language to get the work
done. One senior supervisor in Bangladesh told us: “Shouting
is common in the morning when workers start their duty.
Production targets cannot be earned without any shouting

23%
of workers reported
regular verbal abuse.

with workers and using rude words. I have to maintain favourand cruelty simultaneously [to meet the production target].”Another supervisor added: “When there is work pressure,management give us steep production targets[and] thenwe get desperate and we also scold the operators, even
we are allowed to beat or physically abuse the workers
if needed. When the target is not met we face the rageof the production manager.”It’s important to note that all kinds of abuse — verbal,
physical and sexual — are regularly underreported due tothe social taboo of not discussing these issues with others.
The actual incidence of physical and sexual abuse thatworkers face is therefore possibly be even higher in reality
than what has been reported to us. In Bangladesh, a high 35%
of respondents experienced physical abuse and 28% reported
experiencing sexual abuse in their workplace. Of those whoreported on sexual abuse, half reported that this was afrequent occurrence by male supervisors, gatekeepers,line men, and men in charge of the floor in their workplaces;and 10% reported involvement of senior management,
including their employers. Alarmingly, 8% reported sexual
harassment or requests for sex in exchange for benefits
from management, and 2% told us that they would lose
their job if they did not comply with illicit proposals.
Australian brands have Codes of Conduct that explicitly
outline how these kinds of abuses will not be tolerated
in their supplier factories. But every worker and supervisor
we spoke to for this survey was part of an Australianfashion supply chain. Brands need to go beyond Codesof Conduct and address the root cause of poverty tostop such abusive practices.

39. F ast fashion is low-cost clothing collections that mimic current fashion trends. These trends change incredibly quickly, often causing new styles andtrends to become obsolete in a matter of weeks. Fast fashion garments are cheap and usually made from lower-quality materials. L Oijala, What Is Fast
Fashion?” viewed September 2018, https://www.leaf.tv/articles/what-is-fast-fashion.
MADE IN POVERTY — THE TRUE PRICE OF FASHION| 35

ABILITY TO ORGANISE
The most effective way to ensure that workers are not exploited, and that they are able toraise their voices to call for higher wages, is to ensure that workers are able to organise
together and are represented by strong, independent unions.
BANGLADESH

VIETNAM53%
of workers said their factory has
a Participatory Committee forworkers, but of these more than90%
felt the Committee was
not effective or partiallyeffective; and45%
said the Committee
was compromisedby management .

In Australian workplaces, it is common for unions to negotiatecollective bargaining agreements in consultation with elected
delegates from a workplace and then have all members of theworkforce vote on whether they accept the final agreement.
Properly developed collective bargaining agreements are
key to ensuring workers’ rights in any workplace. The ability
to organise, bargain collectively as a workforce, and speakout in this way are human rights for all workers and arerecognised by almost every Australian clothing brand’s Codeof Conduct. But our research showed clear limitations forworkers in this area as well.
In Bangladesh, the presence of factory-level trade unions
is very limited, with just 16% of workers reporting an active
trade union in their factory. This is high compared to recent
findings of the Centre for Policy Dialogue (CPD) survey, whichfound that only 2.5% of the factories have trade unions
and workers’ organisations continue to remain weak andnon-functional in garment factories.40 It is more common
in Bangladesh for factories to establish a worker andmanagement committee than to establish open dialogue
between union members and factory management. These
more common committees are known as Participation
Committees and are required by law in Bangladesh. However,the vast majority (more than 90% of workers surveyed) told

36 |MADE IN POVERTY — THE TRUE PRICE OF FASHION

Almost75%of the workers we surveyed
do not know about or
understand whether they
have collective bargaining
agreements.

us that the Participation Committees in their factories aremostly ineffective, as the workers’ representatives are often
selected by the management and they do not have themandate to negotiate on key issues like wage levels.
Factory management in Bangladesh also expressed strong
negative perceptions of trade unions. One manager told
us they only plan to hire female workers as they see maleworkers as trouble-makers who encourage others to jointrade unions. The manager commented that they felt women
workers are more obedient. A factory owner reported to us
that no trade union is allowed in his factory, despite the rightto organise being part of their Australian buyers’ Codes ofConduct. He told us: “There is no committee or trade union in
my factory. If any issues [are] raised inside of the factory, I try
to solve it [by] direct intervention. I do not support and allow
trade union in my factory.”
In Vietnam, factory level trade unions can only play the roleof ensuring that companies increase their wages for workers
directly after national minimum wage increases, rather thanbeing allowed to negotiate to increase wages based on otherfactors, such as the business situation of the company. Shop
stewards told us that companies decided the piece rate, andtrade unions have no role in determining wages, production
targets or piece rates of products. Our research indicatesthat the union representatives understand the principle ofwage calculation, but lack detailed and specific knowledge
about the calculation of piece rates paid to workers. Factorylevel unions are generally weak and union leaders often lackthe knowledge to deal with problems, which are unclear or
ambiguous in the law.
Unlike in Bangladesh, collective bargaining agreements are
not very rare in factories in Vietnam. These are agreements

that are supposed to be negotiated and agreed between theworkforce and the managers, covering pay and conditions
for workers. But due to weak union leadership at the factory
level, most workers know absolutely nothing about theircollective bargaining agreements, and seem to have neverbeen involved in negotiating the agreements or any updates
to them. Nearly 75% of the workers we surveyed did not knowwhat collective bargaining was and what collective bargaining
agreements were. It seems that collective bargaining has
no role in these workers lives and does not affect them.
The reality in Vietnam is that workers do not have the rightto participate in wage setting and improving working
conditions. Many of the collective bargaining agreements
in factories are there in name only, simply to show that thefactories are complying with the law.
Laws governing the right to strike in Vietnam involve difficultand lengthy formal procedures. All strike incidents in Vietnam
appear to be spontaneous and unorganised. Strikes inVietnam have been, and will always be unlawful if there is no
institutional change.41

Our research also found that almost three quarters of workers
in Vietnam are not aware of the law on strikes. We found thatworkers who had led strikes or protests over conditions in thepast had lost their jobs. One worker, Dung, explained that in
his factory, the company management controlled the unionand made all of the decisions. He felt that the union only
existed in his factory to show that the factory was complying
by allowing a union. Dung told us, “There were strikes at thecompany. Those who were identified as leading the strikes
were laid off after one to two years. No one dare to stand andlead a strike, even the union president. A union organiser ofa production line used to speak for workers and lost her job.
The company does not dismiss workers right away but will
create pressure until you feel tired and you quit.”
Ensuring that workers are free to work together to collectively
raise their voices and bargain for higher wages, including
through becoming members of strong, independent tradeunions, is a key step forward. The evidence from this researchshows that in this area there remains a very long way to go.

Dhaka, Bangladesh: Garment workers seen on their way to work on the streets of Dhaka. Photo: Fabeha Monir/ OxfamAUS.

40. N
 ew Age, “No trade unions in 97.5pc Bangladesh RMG factories: CPD”, Dhaka August 30 2018, viewed August 2018, http://www.newagebd.net/
article/49447/no-trade-unions-in-975pc-bangladesh-rmg-factories-cpd.
41. Lan Thi Thu Pham, Why always wildcat strikes in Vietnam? Global Labour Column, October 2017, viewed August 2018, http://column.global-labour-university.
org/2017/10/why-always-wildcat-strikes-in-vietnam.html and Vy Si Tran and Coleman Brady, On strike: Vietnamese law on labour disputes, Vietnam Law andLegal Forum, 27 April 2010, viewed September 2018, http://vietnamlawmagazine.vn/on-strike-vietnamese-law-on-labor-disputes-3208.html.

MADE IN POVERTY — THE TRUE PRICE OF FASHION| 37

BINDU’S STORY“They have fired me from the job. Till now,
I am still part of the union committee. Till now,
I did not move. I did not stop. I took a stand.”38 |MADE IN POVERTY - THE TRUE PRICE OF FASHION

Dhaka, Bangladesh: Garment worker Bindu* and her daughter Takhi* at their home in Dhaka. Photos: Fabeha Monir/ OxfamAUS.

Bindu was a linking operator before being unfairly dismissed in March 2018 for trade union
activity. She made sweaters for Australian brand Big W.
In a garment factory ten years ago, a supervisor slapped
Bindu across the face. This injustice sparked her resolve
to ensure that she and her colleagues were treated fairly
and paid their proper wages, benefits and allowances.
She says: “That’s what drives me till now - that I got beaten,
in future no one else should get beaten.”More recently, Bindu and eight male co-workers formed aunion, organising discreetly outside of working hours. They
managed to sign up nearly half of the 600 workers. A small
union win on receiving back-pay for illegally withheld wages
soon soured, with 150 workers losing their jobs due to theautomation of the knitting section. This included the otherunion leaders, leaving Bindu exposed to the direct attentionof the General Manger.
Bindu faced sustained intimidation and harassment for her
union actions and management hired local thugs to bully her.
In March 2018, Bindu was called into the General Manager’s
office and issued a ‘show cause notice’ claiming she wasdisobedient, disruptive and disrespectful. Management tried

to coerce her into signing, but she held her nerve. Eventually,
the police were called to exert more pressure and all otherworkers were sent home for the day.
She managed to stand her ground in the office for overan hour, but with 15 or 16 men intimidating her, shebegan to fear for her safety. Reluctantly, she signed thenotice. Management gave her a payout of $702 and she
was dismissed.
When she left the factory, she was met immediately by her
co-workers, who had refused to go home. They had waited
outside until she was released. She broke down, realising
she was not alone. “At that time, I felt very brave while I wasin the office room, if I knew that all the workers were in factright there, then I wouldn’t have signed on that paper even if
I had to wait up the entire night. I signed because over there,
I was just one woman among so many men. I thought what if
they harmed me?”Bindu is still committed to advocating for a better workplace
for herself and her co-workers.

MADE IN POVERTY — THE TRUE PRICE OF FASHION| 39

4. The role of brands
There’s no doubt that big brands are propping up this system of poverty wages andexploitation in the garment industry in order to make a profit. But it’s not just by making
money from this exploitation that demonstrates how brands are a part of this problem.
The practices of big brands actively keep wages low, and force tough choices onto
workers and factory management.
For this report, Oxfam and our research partners conducted
in-depth interviews with 59 factory owners, employers,
managers and supervisors across Bangladesh and Vietnam.
All of these managers, supervisors and owners were a part ofAustralian fashion supply chains through their businesses.
These interviews revealed a number of practices that directly
result in wages staying low for the workers who make ourclothes. Buying practices of Australian brands, including shortlead times for orders and pressure to keep prices low, are areal part of this problem. At the same time, many big fashion
brands in Australia continue to bring in large revenues.
As one factory owner put it:

It is time for Australian brands to change their sourcing
practices, make credible commitments and plans to act
on living wages, and help turn this tide around. Conventionalpurchasing practices, including aggressive price negotiation,
inaccurate forecasting, late orders, short lead times andlast-minute changes put manufacturers under intensepressure and lead directly to poor working conditions
and low pay for workers.

“[The] local market is losing, workers are losing,but the buyer is the ultimate gainer”.

Melbourne, Australia: Oxfam Australia activists participate in an action targetting Myer in Bourke St Mall, as part of the What She Makes Campaign.
Photo: Geoff Bartlett/OxfamAUS.

40 |MADE IN POVERTY — THE TRUE PRICE OF FASHIONHOW THE PURCHASING PRACTICESOF BRANDS PLAY A ROLE:
PURCHASING PRACTICES•Power imbalance in buyer and supplier relationship•

Poor internal communication•Inaccurate product specifications
and forecasting• omination and management of material/inputN
suppliers•Frequent changes to specifications for garments•

Lack of ethical criteria in contractual terms•

Lack of support to meet ethical standards•

Aggressive price negotiotiation•

Late orders to factories

Leading to pressure on time and cost

IMPACT ON WORKERSIMPACT ON SUPPLIERS• ompromised bargaining position and pressure toCdeliver at any cost•

Difficulty to plan and manage production•

Increased sampling costs•

No reward for improvements•

 nable to secure a price that covers cost ofU
production•

Inability to meet deadlines•

Late deliveries•L ack of resources to invest in improvements
to meet customers’ ethical requirements

Leading to pressure on capacity,
working hours and labour costs•

Surpressed wages•

Poor health and safety measures•

Irregular working hours and excessive overtime•

Unrealistic performance targets•

Lack of breaks•

Poor employment conditions•

Lack of regular or permanent work•

High worker turnover•Harassment and abuse from management•

Unauthorised subcontracting•

Lack of investment in training and equipment•

Reduced productivity•

 nresolved industrial disputes and lack of grievanceUmechanisms•

Low wages•

In-work poverty•

Child labour•

Forced labour

Leading to ETI Base Code breaches and potential
breaches of labour law, labour standards andthe customers ethical requirements

IMPACT ON LABOUR MARKET

IMPACT ON BRAND AND RETAILERS•

Damage to reputation•

Risk of disruption to supply•

Risk of inconsistency in quality of products•

Risk of being downgraded by ETI and other standards

Leading to loss of consumer confidence,loss of market share and possible
reduction in share price and profits.

Leading to continued exploitation ofvulnerable workers and weak labour market

Source: The Joint Ethical Trading Initiative’s Guide to buying responsibly.

MADE IN POVERTY — THE TRUE PRICE OF FASHION| 41

PRICE NEGOTIATION

Dhaka, Bangladesh: Garment workers seen on their way to work on the streets of Dhaka. Photo: Fabeha Monir/ OxfamAUS.

Aggressive price negotiation by brands has an impact on manufacturers’ ability
to pay wages to their workers. Intense competition for business pushes the owners
and managers of garment factories in developing countries to engage in a “race tothe bottom” on prices.
The buyers, such as Australian brands, often apply a practicecalled “underground bidding” to find the cheapest garment
manufacturer. This involves buyers using the quoted pricesof one factory to get another factory to lower their price.
Buyers from Australia and other global garment companies
will then choose the factory that commits to the fastest
turnaround and the lowest price. This pushes down wages
and working conditions.
Meanwhile, decreasing retail prices combined withrising production costs puts substantial pressure on
manufacturers’ margins. Accepting low order prices from
Australian and other international buyers exacerbates thesituation in garment factories, making the factories less able
to invest in improving labour conditions or increasing workers’
pay. As one managing director of a factory told us, “There areseveral vendors, for example 10 vendors, of a single buyer.
Who offers lowest price gets the order. End of every month,
there are huge costs to be managed. So, in many cases wetake the order at a lower price, to keep the factory running.”
One of the supervisors echoed the same:

The trend for factories to accept low prices leads to an
ongoing power imbalance: buyers or their agents typicallydominate, deriving the most value from the product, while
the factories are continuously under pressure to maintainhigh quality and productivity levels with low financial
resources. Similarly, accepting lower prices directly affects
workers’ pay and working conditions, as manufacturers areless able to invest in health and safety measures, or pay
workers fairly.42 One factory owner employing more than 6,000
workers supplying to an Australian brands said, “We have nopower to fix the price. They only think [of] their profit. If they
can get more benefit from other countries, they can shift
their business to those countries”.
Another factory owner supplying to a growing brand inAustralia explained that he had experienced price decreases
continuously over last three years. To remain in business,owners are at times compelled to accept orders that are
below the cost of production. In this current environment,
he felt that “Increasing price [paid by brands to factories]
is the ultimate way to increase workers wage. Owners
have reached down to thebottom price...I support the
campaign to establish buyers’
contribution to increase
workers’ wage. Otherwise,day-by-day profit is shrinking.
That’s why owners are taking
order, even incurring loss. So
these types of campaigns aregood for this industry.”“At times, buyers offer less thanthe production cost, the ownertakes the order to run the factory,[so] how will the owner give moreto the workers?”

42. “Guide to buying responsibly”, viewed August 2018, https://www.ethicaltrade.org/sites/default/files/shared_resources/guide_to_buying_responsibly.pdf.

42 |MADE IN POVERTY — THE TRUE PRICE OF FASHIONHOW AUSTRALIAN GARMENT
SUPPLY CHAINS WORKGROWING, GINNING, TRADING

1a. Ginners receive cotton from multiple

1b. Synthetic fibres, such as nylon

growers and separate the seeds andhulls from the cotton fibre. Ginners
sell cotton fibres to the global market
through traders.

and polyester, are produced
from chemicals.

SPINNING, KNITTING/ WEAVING, DYEING

2. Spinners use cotton or synthetic fibres

from a variety of origins and sources to
produce yarn; fabric mills produce fabricand dyers add colour to the fabric.

BRAND ORDERS ITS APPARELCUTTING, SEWING, TRIMMINGEMBROIDERY, PRINTING, WASHING

3a. Garment factories cut and3b. Garment factories that lacksew fabric and add trim to
make garments.

WAREHOUSING, SHIPPING

4. Garment

factories ship
garments tothe brands
that place
the order.

in-house capacity for someprocesses subcontract themto other facilities.

RETAIL5a. Brands

distribute
garments
to retail andonline stores.

5b. Consumers

purchase thegarments
from store
or online.

MADE IN POVERTY — THE TRUE PRICE OF FASHION| 43

LEAD TIMES AND FAST FASHION
Beside price negotiation, there are different tactics buyers apply to reduce the prices they
have to pay or to impose fines. Reducing delivery time at one end and imposing fines atthe other end for not meeting the delivery time is the most common.
The tendency towards increased consumption by people inwealthy countries like Australia, driven by fast fashion, hasplaced a significant strain on garment factories and theirworkers. This has forced irregular working hours or excessive
overtime, use of temporary workers, and to a lesser extent,
sub-contracting.
Factory managers in Vietnam and owners in Bangladesh
repeatedly told us that they are accepting small orders at alow price with the hope of receiving high volume orders laterfrom the same brands and buyers. One supervisor in Vietnam

told us that due to the change and diversity requirements
of fast fashion, their delivery time for orders over the last
five years has reduced by 10–20% and the urgent orders are
more frequent. Urgent orders create pressure for workers tocomplete the order, especially in the peak season. Owners in
Bangladesh are experiencing the same. One owner told us,“Lead time always changes[s]. Last time, the buyers order todeliver it before 15 days of lead time. It is a pressure for us.
But if we mitigate the lead time, then we will get more orderfrom them. Lead time is sometime shortened. It is 3–4 times ayear that we deliver the order before the deadline on request.”

Photo: rawpixel on Unsplash

LACK OF LONG-TERM COMMITMENTS
Surfing for the lowest price also leads to unstable relationships between the buyers(brands) and their suppliers (the factories).
While it’s clear that some Australian brands have built
long-term relationships with some factories, many buyers
are not committed to building stable buying relationships
with factories over time. Small orders and unstable orders
are among the reasons why factories do not want invest in
their workforce or recruit more workers and so push overtime
on existing workers instead. The factory owners feel that
if they hire more workers, they will have to pay wages forworkers when they do not have orders. When asked about thechallenges they face, a number of managers said that

44 |MADE IN POVERTY — THE TRUE PRICE OF FASHIONa lack of long-term commitments was a big problem. One told
us that “Buyers usually don’t go for long-time commitment.
They make the commitment for maximum six months to one
year long.”
Conversely, if Australian brands are committed to ensuring
they build long-term buying relationships over time with key
manufacturers, they will build trust and leverage with thosefactories. This will make them more able to negotiate andensure the requirements in their Codes of Conduct are met.

MISMATCH
Another key factor that causes wages to stay low is the mismatch between brands’commitments and their allocated staff and focus when they deal with garment factories.
Often multiple teams from one company deal with
one garment manufacturer, and they regularly do notcommunicate effectively between one another. Moreover,there can be a mismatch between what brands say in theirethical sourcing promises and Codes of Conduct and theiractions and focus when they deal with their suppliers — thegarment factories.
Our interviews with the directors and deputy directors ofgarment factories showed that while most buyers makestrong commitments to the safety and rights of workers intheir ethical standards, the story can be different when they
deal with factories. In addition to strict quality control, buyers
were reported to require the installation of air conditioners
for rooms where their finished clothing was being stored,
without ever mentioning installation of air conditioning on
the factory floor, where the workers work many long hours.
The factory floor is much hotter due to a large volume ofmachines and number of people. Some Vietnamese managers
reported that buyers required the installation of automatic
fire extinguishers for the rooms where finished clothing
was stored, but do not require the same installation of fire
extinguishers for the sewing floors, where workers work day
in and day out. It’s true that large volumes of clothing can be
flammable, so it makes sense to require fire extinguishers
for these rooms. But hot machines can also be flammable,
so extinguishers should also be required on the factory floor.
There is a clear mismatch here between the value placed on
peoples’ lives and the value placed on products, despite theclaims made by some companies. This needs to change.
As one deputy director of a garment factory told us: “Theyneed not know and not care about the working conditionsof the workers”.

There is also inconsistency and mismatch in the way
companies operate internally. While placing orders, up to
three different departments from a big company can becommunicating with the same factory. Often the technicaldepartment will work exclusively with the same factory on thetechnical detail and product quality of the clothing. Then themerchandise department will manage the progress, materials
and delivery, working separately with the factory. Thenthe trade department manages and negotiates the price,sometimes working separately again, with the goal of finding
the lowest possible price. And this is just for the process ofplacing and managing orders. Again operating separately, an
ethical standards or compliance team manage the standards
they expect the factory to meet — in terms of human rights aswell as environmental standards.
The problem is that all of these departments or staff members
often do not work with each other. The trade department,
when working with the manufacturer, is usually concerned
only with the price, regardless of the requirements of thetechnical department and the merchandise department.
Similarly, the technical department and the merchandise
department work with the manufacturer without paying
attention to the price. This flawed order placement practiceleads to inconsistency among price, technical standards
and delivery time, making it difficult for factories. On top ofthis, lack of communication and coordination with the ethicalsourcing manager means that orders and order changes areoften made without consideration of the people who will haveto work in the factory to deliver the order.
This mismatch leads to common problems in factories, suchas having to deal with sudden style changes in an order. One
factory owner in Bangladesh shared his frustration with thisinconsistency, saying“Style change is another trouble. Whensuddenly [the] style changes, overtime
work increases. Workers suffer from[the] extra workload.”

MADE IN POVERTY — THE TRUE PRICE OF FASHION| 45

CHANGING THE WAY BRANDSWORK IS POSSIBLE
Australian brands make big money and theymust act to change the way the system
works. They can help lift women out ofpoverty while still producing affordable,
good quality products.
Brands can change the way they negotiate on prices, adjust
their payments, ensure fair lead times for their orders, and get
staff working to the same outcomes — not opposing ones.

•

 efine living wages, making it clear that the company
Dcommits to working towards real living wages and not justminimum legal wages for the workers in their supply chain.

• ontain milestones that the company will achieveC
within a clear, set timeframe. For example, this could
be a commitment that the company will implement
comprehensive changes to their purchasing practices by
a set date and establish a system to monitor and publicly
report on this, and/or run a living wage pilot by a set dateand publicly report on the outcomes before scaling up.

Most importantly, brands must make credible commitments
and act towards implementing living wages in their supply
chains. The time to eliminate poverty wages is now.

Getting to the final goal of paying living wages in supply
chains is complex; however, taking the first step and making
a credible commitment isn’t.

To be credible, a company’s commitment to living
wages needs to:

To help brands navigate this journey and move forward,
Oxfam created a handbook for companies, which we
published and shared with them in 2017.43•

 e public and endorsed by the highest levels
Bof company management.

rg kit fo
A sewing wages
livin
wages into living
chainsPathways ment supply
garglobalBased on the evidence of how harmful poverty wages
are for workers’ lives, there is now simply no excuse forcompanies not to act today.

To help brands make these commitments and achieve living wages in their supply chains, Oxfam hasdeveloped a handbook, A Sewing Kit for Living Wages ‑ Pathways to Living Wages in Global Supply Chains,that explains company obligations and the steps brands can take to move forward. Further detail isprovided in this handbook on each of the recommendations in this report, as well as tools, examples andlinks for any company wanting to act and stop poverty wages in their supply chain.

WHY DO COMPANIES NEED TO SET TIMEFRAMESFOR ACTION ON LIVING WAGES?
The evidence in this report shows that while companies
have a range of strong commitments in their Codes ofConduct and other compliance documents, breaches ofthese are rife in their supply chains. Words can be empty
and slow to take effect unless they come with clear actionplans for implementation.
Setting a timeframe for actions — even if this is simply for apilot or for the development of a broader company roadmap
to living wages — is necessary to ensure that company
boards and management are held to account for thepromises that have been made. Without a set timeframe

for any sort of concrete action, it is much
more likely that promises by companies will remain justthat – promises that are unfulfilled and goalposts will
be pushed further and further into the distance.
Brands need to set public timeframes for their actions
on living wages, so they will be sure to implement theircommitments.
Brands have the power to make this change.43 The fast
fashion industry in Australia is expected to grow at 6.2%
over the next five years, while the $23.5 billion Australianclothing industry as a whole is expected to grow at anannual rate of 1.9%.44, 45

43. “A Sewing Kit for Living Wages”, Oxfam Australia 2017, available at http://whatshemakes.oxfam.org.au/resources.
44. IBISWorld, “Clothing retailing in Australia: industry report”, IBISWorld, Melbourne, August 2018, viewed September 2018, https://www.ibisworld.com.au/
industry/clothing-retailing.html; IBISWorld, “Clothing wholesaling in Australia: industry report”, IBISWorld, Melbourne, August 2018, viewed September 2018,https://www.ibisworld.com.au/industry-trends/market-research-reports/wholesale-trade/other-goods-wholesaling/clothing-wholesaling.htmland
IBISWorld, “Fast Fashion in Australia: industry report”, IBISWorld, Melbourne, April 2018, viewed August 2018, https://www.ibisworld.com.au/industrytrends/specialised-market-research-reports/consumer-goods-services/fast-fashion.html.
45. Our 2017 report noted that the industry was worth $27 billion. The industry has grown in size since 2017, rather than shrunk – but the data source haschanged reflecting a change in the given number. The revenue number changes in latest IBIS World report are due to the change of source used within
Australian Bureau of Statistics (ABS) by the analysts of IBISWorld to provide more up-to-date data.

46 |MADE IN POVERTY — THE TRUE PRICE OF FASHIONAUSTRALIAN REVENUE OF A RANGE OF
CLOTHING COMPANIES ($BILLION AUD)
0.03
0.12
0.18
0.21
0.24

Jeanswest †

0.17
0.18
0.15
0.15

Uniqlo Australia
Pty Ltd

APG & Co
(Sportscraft,
Saba, Jag)

0.08
0.08
0.08
0.08
0.08

Factory X (Gorman,
Dangerfield, Princess
Hwy, Alannah Hilland others) †

0.13
0.13
0.13
0.13
0.14
0.14
0.18
0.22
0.26
0.28

PAS Group(Designworks, Black
Pepper, Review, White
Runway and others)

0.25
0.23
0.27
0.26
0.26

Group Zara
Australian Pvt. Ltd(ZARA)

Noni B Group (Noni B,
Millers, Rivers, Katies,
Crossroads and others)

0.11
0.11
0.11
0.32
0.37

Country Road Group(Country Road,
Politix, Trenery,
Witchery, Mimco)
1.77
1.88

David Jones
Limited*†
0.67

Cotton On

1.50

0.07
0.16
0.29
0.36

H&M

Fast Future Brands(Temt, Valleygirl
and Mirrou)

0.26
0.27
0.23
0.23
0.22

Forever New

0.29
0.30
0.29
0.27
0.30

Premier Investments
Limited (Just Jeans,
Jay Jays, Peter
Alexander and others)

0.85
0.95
1.0
1.06
1.07

2.19
2.21
2.21

0.91
0.96
1.05
1.10
1.18

2014
2015
2016

1.80

2.15

2017

2.60

2018

Target*Myer*

Big W*

2.94
2.80

3.50
3.44
3.46

* Departmental stores
selling clothing, accessories
and other items

3.10
3.20
3.30
3.20
3.10

† Companies not sourcing
garments from Bangladeshor Vietnam

3.80
3.50
3.60

4.21

Kmart*

While many large and iconic brands in Australia have seen
incremental increases in their revenue, and certainly somehave gone backwards, some brands — such as Cotton On andKmart — have increased their intake by more than $1 billion
each since 2014. And, since 2015, returns to shareholders forfive major clothing companies in Australia have increasedby an average of 81% per year. 46 All this while the women inthese company’s supply chains struggle to make ends meet.
Given this, the call for living wages for the women who makeSource: IBIS world see
www.ibisworld.com.au
and annual reports

4.35
4.10

4.55

5.19

5.56

6.0

our clothes must be heard. Research conducted for Oxfam byfrom Deloitte Access Economics in 2017 has already shown
just how little it would take to do the right thing. It found thatto ensure living wages for women across Asia who are making
our clothes, companies would need to increase the sale costof the average item of clothing sold in Australia by just 1%.
With the new evidence presented in this report of thesystemic poverty faced by the women behind Australianfashion — the time for talk is over.

46. Calculated last four years (2015 to 2018) compound annual growth rate of ‘Return on Shareholders’ Funds’ of five companies, Wesfarmers (Kmart, Target andothers), Woolworths Group Ltd. (Big W and others), Premier Investments Limited (The Just Group), Noni B, and Woolworths International (Australia) Pty Ltd.
(Country Road and others). IBISWorld, viewed February 2019, https://www.ibisworld.com.au.

MADE IN POVERTY — THE TRUE PRICE OF FASHION| 47

5. Recommendations
FOR BRANDS
BRANDS SHOULD:
transparent discussion and negotiation between workers,
unions and management to determine steps to living
wages and agree on plans to achieve them.

1. Get the basics right on human rights.
•

 e transparent — publicly disclose their factory listBand update it regularly.

•

 airly deal with human rights abuses — supportFfactories to establish effective grievance mechanisms.

•

 llow workers to organise — adopt a positive andA
proactive freedom of association policy.

•

 onsult with unions and workers’ representatives
C— ensure that workers are able to have a representative
say in their working conditions in all factories and area meaningful part of all wage negotiations.

••

4. Implement and monitor living wages in the supply chain.
• onduct living wage pilots as appropriate to the supplyC
chain and adjust the living wage roadmap based on
lessons learned. Pilots should be done in collaboration
with other brands wherever possible and support systemicchange to adopt living wages through collaboration,
coordination and dialogue among brands, factories,
employers’ organisations, unions and governments.

•

 learly indicate the commitment to stay in a sourcing
Ccountry when wages increase and actively engage,advocate and support governments, industry associations
and civil society to increase minimum wages to match
living wages.

•

 upply regular public reports on the living wage programs,
Sroadmap to a living wage, and the progress being made(or lack thereof).

 mpower women workers — adopt a positive andEproactive gender policy and gender-sensitive targets.

2. Make a credible commitment to living wages.
Publicly commit to respecting the right to a living wage
and working towards the implementation of living wages in
the company supply chain. This must include a timeframeby which the brand will achieve key milestones, such as
publishing a living wage roadmap or undertaking a living
wage pilot program.
3. Develop and publish a living wage roadmap.
•

 dopt an existing living wage benchmark or calculate aAliving wage using established methodology. Brands should
ensure — and, if necessary, facilitate — meaningful and ecognise that purchasing practices and pricing policies
R
have an impact on wages (and working conditions) andcommit time and resources to calculate the labour costsof merchandise to ensure that prices facilitate paymentof a living wage at the very least. This means that the
Freight on Board (FOB) price should cover a living wage
labour cost.47

47. Clean Clothes Campaign, “Road map to a living wage”, Amsterdam, 2 July 2013, viewed 31 October 2018,https://cleanclothes.org/livingwage/road-map-to-a-living-wage.

48 |MADE IN POVERTY — THE TRUE PRICE OF FASHIONFOR GOVERNMENTS
Recommendations for garment factories, Governments in garment-producing countries
including Bangladesh and Vietnam and trade unions can be found in forthcoming reports
to be published by Oxfam in Bangladesh and Oxfam in Vietnam. These reports will be basedon the same research and data set.
THE AUSTRALIAN GOVERNMENT SHOULD:
1. Develop and implement a national action planon business and human rights.
The Australian Government should develop a strong
national action plan on business and human rights, basedon the United Nations Guiding Principles on Business andHuman Rights.
The United Kingdom, Netherlands, Italy, Denmark,Germany, Norway and a range of other countries havealready developed national action plans. Many othercountries, including Malaysia, Ireland, Greece andThailand, are currently developing theirs.

abuses are uncovered. Penalties should also be put in place
for companies that refuse to report, or do not effectively
remedy any situations of rights abuse in their supply chains.
The Modern Slavery Act passed in 2018 is a good start andOxfam applauds this, however it does not cover the fullbreadth of human rights abuses in supply chains. It also
should be strengthened through the introduction of penalties
for non-compliance and the appointment of a fully resourced,
independent anti-slavery commissioner.
3. Invest in educating companies about humanrights responsibilities.

The national action plan should set an agenda for theAustralian Government to ensure it is protecting against
human rights abuses by Australian companies operating
domestically and overseas (including failure to pay wages
that ensure a decent living), and investing in education andcollaboration with businesses to help them meet humanrights obligations — including paying living wages.

The Australian Government should invest in educatingcompanies about their human rights responsibilities andthe risk that they might be infringing on people’s rights— including by paying and allowing poverty wages — in
their supply chains. The Australian National Contact Point
on Responsible Business Conduct should be adequately
resourced to be able to undertake this important role.

2. Legislate to protect human rights.

4. Invest in global solutions.

Introduce legislation that would require large companies toreport on the way they deal with human rights risks including
the risk that they are not paying living wages — in their supply
chains. This should include companies showing how they
identify human rights risks, and how they act to prevent or
mitigate those risks and provide remedy when human rights

The Australian Government should invest in global solutions
to poverty wages by prioritising discussion on global labour
rights standards in regional and international forums, andby supporting collaborative initiatives that encourage
all stakeholders to address poverty wages in developing
countries through the Australian aid program.

MADE IN POVERTY — THE TRUE PRICE OF FASHION| 49

6. Annex
INDUSTRY OVERVIEW
The$23.5 billion Australian clothing industry revenue is expected to grow at 1.9% over the
next five years. Fast fashion products have increasingly made their way into consumers’
wardrobes and the fast fashion industry’s revenue in Australia is expected to grow as
rapidly as 6.2% over the next five years.
Social media and online shopping has exposed moreconsumers to the latest designer fashions, fuelling their
desire for new styles on-demand and contributing to therise in industry revenue. Fast fashion stores are also risingin popularity due to their ability to offer low prices andconstantly updated product ranges. Fast fashion retailers
take trends straight from catwalks and quickly produce
low-cost apparel for mass consumption. Industry players
have short production times and often release clothingin small batches.48
BANGLADESH GARMENT INDUSTRY
The garment industry of Bangladesh has been the key
export division and a main source of foreign exchange
for the last 25 years. The industry provides employment
to approximately 4 million workers —the majority of whom
are women. In the fiscal year 2017–2018, Bangladesh’s totalexport was $49.86billion, while export of readymade garments(RMG) alone was $41.63billion, which is 83.5% of the totalexport. This shows how important the garment industry is for
Bangladesh – and the need to ensure it is sustainable into
the future as well as offering fair and decent work for women.
In 2017–2018, Australian retailers imported $862.25 million
equivalent RMG products from Bangladesh, which is 2.07%of the total RMG export in the same fiscal year49. Reportedly,
Australian brands/retailers have imported RMG products
from Bangladesh for the past seven years only.50

VIETNAM GARMENT INDUSTRY
Vietnam is an emerging giant in the global textile andapparel industry. Vietnam’s garment sector has seen speedy
development over the last few years, and has played a crucialrole in the country’s economic development. There are around6,000 textile and garment manufacturing firms operating in
Vietnam: 84% privately owned, 15% Foreign Direct Investment(FDI); and 1% state owned. This industry employs around 2.5
million people. The apparel exports account for 11.5% of thecountry’s total exports (2016).51 Under the Comprehensive
and Progressive Agreement for Trans-Pacific Partnership(CPTPP) signed on March 2018, Australia will reduce its importduties to 0%in four years, for almost all products. In 2017,
Australia imported some $12.68 billion worth of textiles andgarment products from various countries. Vietnam’s exports
to Australia reached $235 million, equivalent to 1.9% of its
total textile import turnover.52,53

48. IBISWorld, “Clothing retailing in Australia: industry report”, IBISWorld, Melbourne, August 2018, viewed August 2018, https://www.ibisworld.com.au/industry/
clothing-retailing.html; IBISWorld, “Clothing wholesaling in Australia: industry report”, IBISWorld, Melbourne, August 2018, viewed August 2018, https://www.
ibisworld.com.au/industry-trends/market-research-reports/wholesale-trade/other-goods-wholesaling/clothing-wholesaling.html and IBISWorld, “FastFashion in Australia: industry report”, IBISWorld, Melbourne, April 2018, viewed August 2018, https://www.ibisworld.com.au/industry-trends/specialisedmarket-research-reports/consumer-goods-services/fast-fashion.html.
49. Exchange rate used is $1 USD = $1.36 AUD, August 2018.
50. Bangladesh Garment Manufacturers and Exporters Association, viewed August 2018 http://www.bgmea.com.bd/home/pages/TradeInformation.
51. Stitch diary, viewed August 2018, https://stitchdiary.com/vietnam-garment-industry.
52. Exchange rate used is $1 USD = $1.36 AUD, August 2018.
53. Viêt Nam News, viewed August 2018, https://vietnamnews.vn/economy/427721/cptpp-likely-to-increase-garment-exports-to-australia.
html#SD83g1MRHwSfvYSQ.97.

50 |MADE IN POVERTY — THE TRUE PRICE OF FASHION

METHODOLOGYOBJECTIVE

The objective of this research was to examine the impact of low wages on the conditions
and wellbeing of garment workers and their families working in the factories supplying tomajor brands in Australia. The research was conducted in Bangladesh and Vietnam as theimports from these countries has increased over the years.
A combination of both quantitative and qualitative research
approaches were employed for this study. Surveys, in-depth
interviews, case studies, focus group discussions, key
informant interviews and literature reviews were conducted.
The study has been supported by a variety of tools andtechniques including structured questionnaires, semistructured questionnaires, open ended questionnaires andchecklists and guidelines. The quantitative questionnaire,
in-depth interview guidelines and checklists were tested
and refined before the study. Enumerators, both in Vietnam
and Bangladesh were trained on the research tools. Data andinformation validation processes were put in place to checkthe data and information validity. Oxfam closely coordinatedwith the Bangladesh Institute of Labour Studies (BILS) and theInstitute for Workers and Trade Unions (IWTU) in managing the

research, and used similar tools so that the findings
are comparable. This research represents a base line of
the working conditions of the workers both in Bangladesh
and Vietnam. There is no similar comprehensive reportpublicly available for the Bangladesh garment industry
using recent data. In Vietnam, the Better Work reportprovides an overview of social compliance standards infactories;54 however, it does not cover the impact of poverty
wages on workers’ lives and it does not present case studies
to unearth the story behind the numbers. In that sense,
this is the first such comprehensive report with recent
data on the Vietnamese garment industry as well. Moreover,
it is the first such report that has focused on factories thatare or have recently been a part of Australian garment
supply chains.

Dhaka, Bangladesh: Garment workers seen on their way to work on the streets of Dhaka. Photo: Fabeha Monir/ OxfamAUS.

54. Better Work, ‘Annual report 2017: An industry and compliance review, Vietnam’, 2017,
viewed 31 October 2018 https://betterwork.org/blog/portfolio/better-work-vietnam-annual-report-2017/.

MADE IN POVERTY — THE TRUE PRICE OF FASHION| 51

Dhaka, Bangladesh: Garment factory, not associated or to be linked with any of the women in the garment worker case studies. Photo: GMB Akash/Panos/OxfamAUS.

BANGLADESH
The survey population covers approximately 163,000 to
165,000 RMG workers who work in 160 RMG factories supplying
to brands in Australia along with other European and North
American brands located mainly in and around the greater
Dhaka division. Taking factory locations into account, thegreater Dhaka division was divided first into six main areas/clusters. They are:Gazipur, Savar, Dhaka, Narayangonj,
Manikganj and Mymenshing. At a second stage, 18 sub-areas
were selected from these six main locations. These are again
based on the concentration of the RMG factories in these
sub-areas. Considering 90% confidence level and 10% marginof error, 48 factories were selected scientifically for thesurvey from among the 160 factories. These 48 factories
were taken proportionately from 18 sub-areas prior selected
for the study under six broader locations.
Considering 95% confidence level and 5% margin of error,
384 workers were sampled scientifically from among the
163,000 to 165,000 RMG workers in the survey population.
These 384 workers are then distributed equally into thepreviously selected 48 factories. Finally, eight workers are
surveyed purposively from each of the selected 48 factories.
To ensure representativeness of sampling, among others, atleast one married worker, one unmarried worker, one helperand one operator were interviewed/surveyed from each of thesample factories. Workers were surveyed/interviewed basedon a structured questionnaire. Out of 384 workers surveyed/interviewed, 240 (62.5%) were women and 144 (37.5%) were

52 |MADE IN POVERTY — THE TRUE PRICE OF FASHION

men. All workers were surveyed/interviewed at a location
away from the factory so that there was no influence fromthe management. At the last stage, 48 factories and 384
workers were selected purposively based on prior know-how,accessibility, easy communication, time and cost.
To capture views and opinions from important otherstakeholders and to counter balance with the gaps identified
from analyses of survey data and literature review, 10 factoryowners/employers, 14 factory managers, 16 supervisors,and 10 key informants including civil society organisations’representatives, trade union leaders and sector experts wereinterviewed further, based on a set of developed checklists.
Apart from these, 16 focus group discussions (FGD) wereconducted, of which eight were conducted with workers
and eight with their family members. Moreover, 10 detailed
case studies of workers were collected to demonstrate theimpacts of systemic underpayment of wages. All FGDs andin-depth interviews for case studies were conducted at alocation away from the factory.
Study data was collected during mid- 2018. However, theminimum wage in Bangladesh increased to $128 (AUD) amonth in September 2018. From January 2019, studied
workers received the gross salary specified in the new
pay structure against his/her grade. For the analysis of
this report wage data with and without overtime has beenadjusted to reflect the new pay structure.

VIETNAM
Eleven factories were identified supplying to brands inAustralia. For the research, among the 11 factories, four
factories are located in wage region 1;three factories inwage region 2;two factories in wage region 3; and two
factories in wage region 4.55 The total number of workers
was about 12,064.
Six factories were selected for this research out of 11 factories,
to cover the four wage regions: two factories in region 1(Dong Nai, South and Hai Phong, North); one factory in region
2 (Hai Duong, North);two factories in region 3 (Hai Duong and
NinhBinh, North); andone factory in region 4 (Thanh Hoa, North).
The total labour force in these six factories is 5,882 people,of which 85–90% are female. A total of 88 workers wereinterviewed for the study, of which 13 (15%) were male and75 (85%) were female. All workers were interviewed at alocation away from the factory.

For the qualitative information, six focus group discussions
were conducted with factory workers inside the factory. A
further 67 in-depth interviews were conducted: 14 with factory
supervisors, five with managers, 38 with union officials, sixwith officials from the Department of Labour, War Invalids andSocial Affair, one with theMinistry of Labour, Invalids and Social
Affairs56, two with members of the National Wage Council, andone salary expert. We collected 14 case studies of workers.

55. Vietnamese minimum wage is set up by region. There are four wage regions in Vietnam. Regional minimum wage is applied to employees working inenterprises, cooperatives, farms,households, individuals and institutions and organisations that use employees under labour contracts in accordancewith the provisions of the Labour Code.
56. The Department of Labour, War Invalids and Social Affairs is a specialised agency of the provincial People’s Committee, and the Ministry of Labour, Invalids
and Social Affairs is a government ministry in Vietnam responsible for state administration on labour, employment, occupational safety, social insurancesand vocational training; policies for war invalids, martyrs and people with special contribution to the country; social protection and prevention of social
evils; child care and gender equality. policies for war invalids, martyrs and people with special contribution to the country; social protection and preventionof social evils; child care and gender equality.

MADE IN POVERTY — THE TRUE PRICE OF FASHION| 53

ANALYSIS PLAN
Data was classified into several categories according to
the issues. Quantitative data was analysed using Statistical
Package for Social Sciences (SPSS). With regard to thequalitative study “explanation building” as the analyticaltechnique was applied and “theme-wise” format wasused because of its potential to give a better comparative
understanding of the situation of the workers.

PHASES

Conceptualisation and issue identification

Research and analysis

Presentation and validation

CORE
ACTIVITIES

Finalisation of methodology andresearch tools through pilot surveys
and incorporating feedback from thestakeholders.

Train enumerators on
research tools.
Data collection quantitative:
surveyBrainstorming workshop
with the stakeholders andenumerators on researchtools.

Data collection qualitative:
interview, FGD, case study

Presentation of draft findings
to key stakeholders.

Data analysis
Draft report
preparation
OUTPUT

Brainstorming workshop

Incorporating
feedback
receivedfrom thestakeholders
Final report

Finalise issues, methodology
and Research tools

LIMITATIONSInterviews for this study were undertaken between April andJuly 2018. At the time of the interviews, all workers, factories
and factory owners/managers were a part of Australian brandsupply chains. Since this time, some brands have changed
ownership structure and of course companies do change their
suppliers. This is a snapshot of the reality of some Australian
supply chains at the time the interviews took place.
The Vietnam study has been conducted based on a smaller
sample size. Therefore, we advise those using this research
to be mindful of this fact when referring the data from
Vietnam. The quantitative data collected from the survey
used in this research report in relation to Vietnam havebeen combined with qualitative results, and crosschecked
through validation workshops and literature review toensure accuracy.
Data and information for the study were collected before
the minimum wage revision in Bangladesh. All data had to be
adjusted by the researchers to accommodate and reflect thischange so that the study findings are correct and relevantat the time of publication. This has been validated throughstakeholders in Bangladesh.
Though a majority of the Australian companies examined inthis study publish their factory list, still there are companies
that keep their factory lists in hiding. Researchers had to use

54 |MADE IN POVERTY — THE TRUE PRICE OF FASHION

different sources to identify Australian brands and factories
supplying to Australian companies. However, the factory
list used for this study and list of Australian brands sourcing
form Bangladesh and Vietnam is not exhaustive, as it would
be difficult to name and discover every clothing brand inAustralia that sources from either Bangladesh or Vietnam.
Furthermore, verbal, physical and sexual abuse are often
underreported due to the social taboo of not discussingthese issues with others. The actual incidence of physicaland sexual abuse that workers face is therefore possibly
be even higher in reality than what has been reported
in the study.

LIST OF LEADING BRANDS/ COMPANIESOPERATING IN AUSTRALIA SOURCINGFROM BANGLADESH AND/OR VIETNAM
This list is not exhaustive, but a list of selected brands known to be sourcing from either Bangladesh or Vietnam as indicatedbelow. Note that some brands are still very secretive about their sourcing locations, and so it is not always easy to determine
the countries in which they make their clothes.
BANGLADESH

Owned by Woolworths

Owned by The PAS Group

Owned by Wesfarmers

Owned by Inditex

VIETNAM

Owned by Hanes Brands Australasia

Owned by Wesfarmers

Owned by Woolworths

Owned by Inditex

Oxfam Australia does not endorse or have any affiliation with the featured companies. Oxfam Australia acknowledges that the
copyright in the logos featured is the property of these companies.

MADE IN POVERTY — THE TRUE PRICE OF FASHION| 55

FURTHER INFORMATION ABOUT
LIVING WAGE BENCHMARKS:ASIA FLOOR WAGE
The Asia Floor Wage Alliance (AFWA) is an international
alliance of trade unions and labour rights activists, working
together to demand garment workers are paid a living wage.
The AFWA began in 2005 when trade unions and labour rights
activists from across Asia came together to agree on a
strategy for improving the lives of garment workers.

because it realises that improving wages in a country
makes it vulnerable to capital relocation — the practiceof companies moving to another location if wages or othercosts increase in their country of operation. The purpose of
the Asia Floor Wage is to create a social floor, a level playing
field, by taking wages out of the equation.57

The AFWA has defined its own formula and methodology
to calculate a living wage. It recognises that the way thegarment industry is organised places severe limits on theability of workers to improve wages and working conditions indeveloping countries. In light of these difficulties, the AFWA
campaign calculates a living wage — in terms of purchasing
power parity dollars — for a range of Asian countries. Its
mission is to campaign for a living wage across Asia

ASIA FLOOR WAGE CALCULATIONThe Asia Floor Wage
(AFW) IS CALCULATED BASED ON THE FOLLOWING ASSUMPTIONS:

A worker is supporting themselves

or

or

50%

40%

10%

50% OF MONTHLY SALARY
GOES TOWARDS FOOD,
BASED ON 3,000 CALORIESA DAY PER ADULT

40% GOES TOWARDS HOUSING,
CLOTHING, TRAVEL COSTS,
CHILDREN’S EDUCATION AND
HEALTH COSTS

10% GOES TOWARDSDISCRETIONARY INCOME

57. Asia Floor Wage Alliance, viewed September 2018, http://asia.floorwage.org.

56 |1 x worker
2 x adult dependents or
1 x adult + 2 x children or
4 x children

MADE IN POVERTY — THE TRUE PRICE OF FASHION(some entertainment,savings, pension or if mainearner loses their job)THE GLOBAL LIVING WAGE COALITION AND ANKER METHODThe Global Living Wage Coalition brings together Fair trade
International, Forest Stewardship Council (FSC), Good Weave,
Sustainable Agriculture Network/Rainforest Alliance (SAN/RA) and UTZ Certified, along with Social Accountability
International (SAI), to improve wage levels in supply chains.
The coalition, in partnership with Richard and Martha Anker,
has developed a methodology for calculating a living
wage. Each living wage benchmark commissioned by
the coalition is made public to further this aim and toincrease the opportunity for collaboration towards
payment of a living wage.58

FLOW CHART OF ANKER’S METHODOLOGY FOR ESTIMATING A LIVING WAGE

COST OF NUTRITIOUS
LOW COST DIET

COST OF BASICACCEPTABLE HOUSINGOTHER ESSENTIAL
EXPENSES

Cost of basic quality of life for average person
FAMILY SIZE TO SUPPORTNUMBER OF FULL-TIME
WORKER EQUIVALENTSPER COUPLE

SMALL MARGINS FORUNSEEN EVENTS

Living wage for worker

58. Global Living Wage Coalition, viewed September 2018, https://www.isealalliance.org/our-work/improving-effectiveness/global-living-wage-coalition.

MADE IN POVERTY — THE TRUE PRICE OF FASHION

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58 |

MADE IN POVERTY — THE TRUE PRICE OF FASHIONMADE IN POVERTY — THE TRUE PRICE OF FASHION

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y
is keeping her in povert

whatshemakes.org