The Blog

On Rana Plaza, Living Wages, a Broken Industry - and How to Fix It

For countries that have experienced an industrial revolution, the apparel industry has almost always spearheaded the shift. The possibility to work in garment factories provides independence to women undreamt of before. But at some point, something must have gone wrong...

This blog is part of a month-long focus around sustainable fashion across HuffPost UK Style and Lifestyle. Here we aim to champion some of the emerging names in fashion and shine a light on the truth about the impact our appetite for fast fashion has around the world.

Who REALLY is to blame for Rana Plaza (NO it's not as easy as "greedy consumers and greedier brands"), why boycotting fast fashion is a bad idea, and what CAN be done - by us, the consumers!

This is about the underlying problem of the fashion industry, and how to fix it.

Yes, this IS a complicated topic (that's why most media avoid it).

In this blog post, we start to explain it in 1000 words.

Fashion items (as most lifestyle products) are quite simple products - little skill is required to produce them. This is also where the beauty of the industry lies: in its ability to absorb unskilled labour into formal employment. For countries that have experienced an industrial revolution, the apparel industry has almost always spearheaded the shift. The possibility to work in garment factories provides independence to women undreamt of before. But at some point, something must have gone wrong...

Two and a half years ago, a building collapsed - and we are still in shock. More, we (!) still have a bad conscience (which we try to suspend while shopping, as several studies have demonstrated). And we do what we always do in such a situation: we find culprits.

We blamed companies who sourced from Rana Plaza.

Yet, the building also hosted a bank, offices, and shops - it looked safe (as mentioned by the German TÜV). On April 23, it showed cracks and was evacuated. On the next day, two inspectors declared it as safe (bribed by Mr. Sohel Rana, the owner of the building, who has been officially charged for his role in the disaster), but only the garment workers went back, while the rest remained closed. They were threatened to lose a month's salary. Instead, they lost their lives, loved ones, or the ability to work again and earn their livelihood.

We should blame the low wages which leave no room for choice.

On that subject, we have already blamed the fast fashion brands (which offer cheap fashion) for their alleged greed, who in turn blamed their own customers and their - equally alleged - unwillingness to pay more. Yet, all surveys and statistics demonstrate that most consumers would in fact be willing to pay an adequate markup for fair production conditions - we are talking about a few cents per piece, after all.

It's not (only) about the money!

But while it may be easy to choose FairTrade sugar over conventional one (it is only slightly more expensive, can be found in the same stores and tastes at least as sweet) -fashion is a bit more complex.

Here, consumers have but a few options (buy FairTrade/secondhand only) - all of which would bring about limitations in convenience, choice, style, and/or budget. So they may be ready to pay more for fair production, but not be willing (or able!) to pay the quite substantial price difference charged by current FairTrade brands (which is not solely due to the treatment of workers but mainly to their lacking of the fast fashion brands' economies of scale and efficiency). In addition, all options wouldreduce the total amount of garments sold, which would inarguably worsen the situation for the garment workers.

So, even though the ones who would in the end carry the additional costs of higher wages (the consumers) would be willing to do so, the market cannot regulate itself to create this mutually desired outcome. And where market cannot regulate itself, the underlying system is dysfunctional - the fashion industry is broken.

The weakness lies in the length of the supply chain and its lack of transparency.

The companies CANNOT simply raise the garment workers' wages - because usually they don't know them. Trying to change that in recent times, most now know their first- and second-tier suppliers (and some have disclosed them in some countries), but there are so many subcontractors involved with whom orders are handled mainly via purchasing intermediaries, that they are not in direct contact with the majority.

This system is called Indirect Sourcing. It provides the flexibility necessary for fast fashion production. However, it also leads to an immense lack of transparency, wrong understanding of priorities, lack of identification and accountability, and enables time pressure to be a driving force. The actual price war takes place between the suppliers (not the retailers!), the actual price sensitivity lies with the purchasing agents (not the consumers!).

It makes no sense to blame the companies for sourcing from one special building (or postulate compensation from them), if the underlying system is the cause for the real problem. Instead every single company which relies on indirect sourcing should have contributedto the Rana Plaza fund - because in that system, it was mere luck, for which brand products from involved factories were destined. In fact, they should open an emergency fund for fast relief in future industry accidents (agreeing on safety standards is a good start, but not more than that, since these only cover first-tier suppliers). And the amount of contribution should depend on their total revenue. It would be tiny, if every major company would take part. Yet, this wouldn't fix the main issue, the wages.

How to fix fashion

There are two possible solutions:

  • a) Establishing strong, direct, long-term relationships with the suppliers AND the sub-contractors and
  • b) Raising the minimum wage.

Both is needed. The first has already started, but progress can only be slow. More efficient would be to raise the minimum wage.

Some companies are trying to convince governments to do so, but these can't, as long as they have to fear that all the other brands will move on to countries with even lower wages in case they would indeed raise their own minimum wages.

What is needed, is that as many brands as possible pledge to pay living wages.

This approach is shared by some of the biggest brands, who have in a so far unprecedented move conjointly sent a letter to the Cambodian government last year preceding the upcoming wage negotiations, stating that they are willing to pay higher wages. As a result, the minimum wage was raised by 28%. Brands' pledges also endorsed the introduction of the first minimum wage ever in Myanmar a few weeks ago.

They now need to strengthen their pledges by adding credibility. The for years unfilled Rana Plaza Fund (filled only recently bay an anonymous donation) symbolizes the fact that there is no "charity" money in the fashion industry. So why should anyone believe that these companies are really ready to pay higher prices than they absolutely need?

Therefore, they should put some money into their talk - or into an emergency fund.

The brands are in the driver's seat. So are we, the consumers.

It is a great step to take action like so many did on Fashion Revolution Day (a twitter campaign in which consumers stated their interest in the origins of their fashion items). Now we need to put some money into our talks, too - and to ask for a precise action.

In order to encourage more brands to follow those pioneer brands, and all of them to enhance their pledges with credibility, we should start to demonstrate that we indeed DO CARE and ARE WILLING to pay a tiny little premium for the workers' well-being.

Prof. Muhammad Yunus (the Peace Nobel Laureate known for his concept of microcredits) calculated that 50 cents per item represent the difference to a living wage. So we should pay 50 cents to offset the production conditions of our lifestyle and fashion items - and use the money as statements to fix the industry.

For this, the FairBuy Foundation was founded. It provides a free app to handle the donations and to register them as statements. To find our more, watch our 90 seconds explanation video on and visit us on FairBuy's Facebook page.

HuffPost UK Lifestyle is running a special series around Sustainable Fashion for the month of September. Livia Firth is creative director of Eco-Age and founder of The Green Carpet Challenge, and will be guest editing on 18 September. If you'd like to blog or get involved, please email us.