Our FAIR SHARE research
In the absence of an existing calculation that would reliably reflect the realities of living and working in the garment industry in Tamil Nadu in India (where the factory is located), the Fair Share project commenced by defining the living wage benchmark specifically in relation to the factory workforce.
Based on the adopted definition of the living wage and primary research results, a round of discussions was held with representatives from a local NGO, the management and the workers of the factory, to put accurate figures on all the elements of the living costs.
The result was a net monthly requirement of 12,116 Indian Rupees (INR) set in December 2015. This equates to a standard shift rate of 466 INR “net money in hand”. This figure was then grossed up to allow for the statutory deductions of 13.75% from the pay slip.
Consequently, the FAIR SHARE living wage benchmark for the Tamil Nadu area as of December 2015 was set at 14,048 INR per month (£141 or €191). This benchmark will be reviewed annually to keep track of the changing costs of living.
The lowest net wage at the factory for an 8-hour shift was 307 INR after deductions, including guaranteed bonuses but excluding any overtime. At the time of the survey, there were 14 workers (13 helpers and 1 sweeper) on the lowest wage. The highest shift wages were 574 for cutters and 523 for tailors. The average net shift wage was 393 INR.
Even though the current production covered by the FAIR SHARE scheme would only be around 10% of the factory’s output in the first year, it was decided that all the factory workers should benefit from the increase in wages rather than only those actively involved, and it should be paid through the monthly pay roll rather than as a one-off bonus, every month, on a permanent basis.
The initial orders in the first year would not generate sufficient funds to reach the target living wage level in full, and therefore it was agreed that the available funds should be shared equally amongst all the workers through the pay grades, even if some top earners were already above that level. Giving every worker the same net increase was acceptable to all parties, and it was deemed as an equitable way of distributing the funds. In effect, it means the lowest earners would receive the highest increase in percentage terms.
Considering the amount of money the scheme would generate in the first year, the size of the workforce, and in order to ensure adequate provision of funds for every month, the additional amount to be paid to every worker was calculated at 25 rupees per shift, giving a monthly wage increase to every worker of 650 INR.
The Fair Share scheme guaranteed that this additional monthly wage payment would not decrease or stop for as long as the company has a trading relationship with the factory, regardless of the volume of future orders.
