The challenges and complexity of a living wage
In line with the Ethical Trading Initiative Base Code, David Jones’ Supplier Code of Conduct outlines our expectation that our suppliers must ensure factory workers are paid a living wage with “some discretionary income” over and above the legal minimum or industry benchmark in each country.
“Wages and benefits paid for a standard working week must meet, national legal standards or industry benchmarks, whichever is higher. In any event wages should be enough to meet basic needs and to provide some discretionary income.”
Like many other retailers, we still have work to do to determine whether these expectations are being met. In practice, there are a number of challenges that we need to work through with our suppliers, our peers and our NGO partners to understand the status-quo in relation to living wages in each country and then implement measures to improve wages, over time.
To help us better understand some of these challenges, we have included a living wage pilot project as part of our four-year Ethical Sourcing Strategy.
A pilot project is an important first step in ensuring the payment of living wages because of the complexities and challenges involved, some of which include:
- There is currently no clear calculation as to what constitutes a living wage in each of the different countries and regions we source from. The development of the Anker Living Wage methodology is encouraging but the research conducted to date has limited coverage in the regions where our suppliers’ factories are located. As more localised data is collected, we will get a better sense of living wages in the countries and regions relevant to David Jones.
- We need to find the right partner. The nature of the global supply chain means that a retailer paying higher prices does not necessarily translate to the payment of a living wage: we would be reliant on our suppliers passing on those benefits to their suppliers and, in turn, to their workers.
- While most of our suppliers’ factories are still in China, promoting higher wages through collective bargaining and freedom of association (also enshrined in our Code) remains challenging given the macro environment in that country. On the other hand, in other countries where the discussion around living wages is more progressed (like India and Bangladesh) David Jones’ potential impact would be diminished because less of our suppliers source out of these markets. So, we need time to find the right partner in the right region.
All that said, David Jones is committed to collaborating with industry peers and non-government organisations to support the movement towards the payment of living wages, and we will provide our stakeholders with regular updates on its progress in improving pay and conditions for people working along our supply chain.