Paying a living wage across Australia’s clothing supply chain would increase the final retail price by just 1% on average, while nearly doubling wages in countries like Bangladesh.
A report by Deloitte Access Economics, commissioned by Oxfam Australia, sheds light on the economic impact of paying a living wage in Australia’s clothing supply chain. With the fashion industry under increasing scrutiny to improve worker wages and conditions, the findings reveal that living wage costs are surprisingly small compared to the potential benefits. (Access the full report here).
Key Takeaway from the Research
The report finds that factory workers in Australia’s clothing supply chain currently earn wages equivalent to only 4% of the retail price of garments. However, if factories were to pay workers a living wage, this would only increase the final retail price by around 1% on average. For example, a shirt priced at $25 would cost just an additional 21 cents if workers were paid a living wage.
This relatively minor price increase could significantly impact factory workers, especially in countries like Bangladesh and India, where current wages fall far below a living wage. A shift to living wages would increase wages by 76% in Bangladesh and 41% in India, effectively improving livelihoods and reducing the risk of exploitation.
Commentary: What This Means for SlaveCheck’s Business Compliance Platform
This report highlights the opportunity to lead by example for companies facing growing scrutiny around supply chain transparency and ESG (Environmental, Social, and Governance) standards. Implementing a living wage aligns with ethical goals and can enhance brand reputation and customer loyalty without substantially affecting costs. SlaveCheck’s platform helps businesses go beyond basic compliance, enabling real-time monitoring and transparency to help eradicate modern slavery across extended supply chains.
Moreover, with Australia’s import market heavily reliant on garments from low-wage countries, focusing on fair wages can contribute to a more sustainable and ethical supply chain, reducing the reputational risks associated with labour exploitation.
Why This Matters
As consumers become more conscious of where their products come from, companies face the challenge of balancing cost efficiency with ethical standards. Deloitte’s findings demonstrate that paying a living wage could be a feasible and ethical choice that doesn’t significantly impact profit margins or retail prices. Companies can strengthen their market position and appeal to increasingly socially conscious customers by taking a proactive stance on this issue.
Final Thoughts
This research provides a clear message: ethical business practices, like paying a living wage, don’t just benefit workers—they can boost brand value and revenue. Download the full report for detailed insights and data here. At SlaveCheck, we’re committed to helping organisations lead the way in supply chain transparency and ethical practices. Reach out to learn how we can help your business make a meaningful impact.
