Toward a Living Wage
You may remember that Nashville-based ethical fashion and accessory line, ABLE, began a transparency campaign several months ago, beginning with publishing employee wages at their Nashville factory.
Now, in partnership with “one of their biggest competitors,” fellow Nashville-based business, Nisolo, they have published their lowest wages along with helpful context around what constitutes a living wage.
ABLE’s lowest wages occur in several factories in Ethiopia, where the bulk of their leather goods are made, while Nisolo produces their line of men’s and women’s shoes in Peru.
Who Decides a Living Wage?
Nisolo’s report offers an impressively detailed analysis of why they chose to move forward with this level of transparency, how they’ve measured impact in the past, and how partnering with ABLE has helped them gain better insight into living wage needs and how their factories perform. So I’ll quote from the press release:
Many of the stats we just shared are from internal, Nisolo-led social impact assessments. We take this work very seriously and try our best to adapt state of the art methodology on a regular basis. However, we’ve made plenty of mistakes in the past. And, apart from its crucial role in pure accountability and the fight toward honest transparency in the industry, this is one reason we are firm believers in the importance of 3rd party verification.
As sustainable fashion becomes more and more on-trend and marketable, there has never been a time in history when 3rd party verification has been more critical than it is today. Both for accountability as well as for the learnings 3rd party verifications offer, this is why we chose to become B Corporation certified in 2017. Seeking to learn more, we decided to hire ACCOUNTABLE this year to do an in-depth evaluation of our factory’s wages and working conditions.
Created in partnership with ABLE and GoodOps, a supply chain consulting group, ACCOUNTABLE is a social impact assessment platform that ensures worker protection while giving customers a transparent look at the good and bad that exists within factories. The assessment evaluates wages, equality, and safety, weighing a manufacturer’s score most heavily on paying a living wage, which is calculated by looking at a combination of the leading industry standards—WageIndicator and Trading Economics—local cost of living data, and survey data conducted by ACCOUNTABLE from the actual producers working in the factory. Based on those data points, the living wage is determined by working with partners in the local community and the auditor on the ground. Elements of ACCOUNTABLE’s living wage include nutrient-rich food, water, housing, education, healthcare, transportation, childcare, clothing, other essential needs, and savings for unexpected events.
We learned a lot from this audit and are excited to share more, but one of the most important learnings was that the living wage (reminder “living wage” roughly means the cost to meet a worker’s basic needs) we calculated internally of $269 was lower than the $280 living wage ACCOUNTABLE concluded from their findings. And, our lowest wage of $276 was $4 shy and 1.4% off from the living wage findings of ACCOUNTABLE’s audit.
We were wrong. Once we discovered this wage gap, we immediately worked with our team to raise our lowest wage to $280 a month, thereby ensuring all of our producers’ ability to earn a 3rd party verified living wage. In regards to our factory’s health and safety, an additional important learning was that we need to be more diligent with our factory’s 2nd and 3rd tier suppliers. We’ve since established a supplier Code of Conduct and will continue to monitor the social and environmental practices of the suppliers our factory uses to source materials. Our goal is to push them toward living wages as well.
What the Report Reveals
There are many things about this report that are confirming – such as the need for 3rd party verification in the face of increased greenwashing in the industry – and illuminating – for instance, that independently assessing what constitutes a living wage is difficult, and must be assessed and reassessed before a company can be confident in their decisions.
It also shows that even companies like ABLE and Nisolo, who have operated as ethical businesses from the outset, have their shadow sides, though in both cases their weaknesses do not appear to be intentional components of their business models.
I wouldn’t have known that ABLE operated in several countries – an expansion from their earlier, jewelry-based business model – had they not explicitly made this information public. I also wouldn’t have thought to delve into the nuances of Nisolo’s 3rd party suppliers.
This highlights, too, how easy it is for companies, as they grow, to lose track of their supply chains to an extent that, even if a customer asked the “right” question, they may not get a satisfactory response.
Why Publishing Wages Matters
In addition to being a great marketing tool, publishing lowest wages offers another education in consumer advocacy. If we know that companies CAN reasonably gather and share this information, then we know we can demand it.
If we know that some companies take living wages seriously, then we know that WE can take it seriously, not only when it comes to manufacturing but even in our own lives and the lives of our neighbors.
And when companies hold themselves to this level of transparency, it makes it harder for them to go back on their promises. They’re less likely to compromise in the name of scaling.
Both ABLE and Nisolo are successful businesses that have been on the brink of household-name level success for the past couple of years. I applaud them for making this move at precisely the time they’re most likely to be tested, as they continue to grow.
What are your thoughts on wage transparency? Do you see any downsides?
Some of my favorite things at Nisolo:
Some of my favorite things at ABLE: