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Our action on Living Wage

As part of our commitment to respect human rights, we understand the importance of a fair wage to help protect human dignity and enhance quality of life. This is why we have committed to work with our partners to achieve a living wage for factory workers. A living wage is the minimum income necessary for a person to meet their basic needs as well as that of his/her family, including some discretionary income.
In 2015, we launched a research project to better understand the challenges and opportunities associated with achieving a living wage for factory workers; as a first step in developing a long-term strategy. A key finding was the importance of partnerships. Sustainable improvements in wages cannot be achieved by individual brands and retailers working alone – they require active industry collaboration and partnerships with employers, trade unions and governments.

Partnering for Change

As a result, in 2015 we joined 'Action, Collaboration, Transformation' (ACT), a collaboration between international brands and retailers, and IndustriALL Global Union, the international trade union federation. ACT aims to achieve a living wage in the garment and textile industry - in countries such as Bangladesh, Myanmar, Cambodia, Turkey and Vietnam - through freedom of association and industry-wide collective bargaining, supported by world class manufacturing standards and responsible purchasing practices.
Since joining ACT we have been working alongside its other members and with IndustriALL to assess our purchasing practices, and the industrial relations and competitive context in key sourcing countries. This assessment has helped identify the main factors impeding progress toward a living wage. These have informed ACT’s strategy and a package of change commitments which will form the basis of country consultations with employer representatives and trade unions (along with government representatives), who are ultimately responsible for negotiating an industry agreement at a national level.

ACT’s vision of industry-wide collective bargaining agreements and a living wage for garment and textile workers is a long-term journey with many challenges to overcome. But we are convinced this is the right path and the only sustainable solution. Industry-wide agreements will:

  • ensure that many workers benefit from higher wages, rather than a factory-by-factory approach; and
  • encourage employers to compete through innovation and quality, rather than low pay and conditions.

For brands and retailers such as Target, industry agreements not only provide a mechanism to fulfil our human rights commitment, but also greater certainty for investment; which is of benefit to our business, our supply partners and the workers who produce our products.

Commitments on Purchasing Practices

In December 2018, ACT publicly released its ‘Commitments on Purchasing Practices’. The commitments are the result of three years of review and consultations aimed at developing a common set of changes and implementation measures on purchasing practices that will facilitate the payment of living wages.

The commitments cover five broad areas:

  1. Brands commit that purchasing prices include negotiated wages as itemised costs;
  2. Brands commit to fair terms of payments;
  3. Brands commit to better planning and forecasting;
  4. Brands commit to undertake training on responsible sourcing and buying;
  5. Brands commit to practice responsible exit strategies.

In consultation other ACT brand members, our suppliers and IndustriALL, we are currently developing an implementation roadmap, and monitoring and reporting mechanisms, to ensure the successful realisation of the commitments in our business.
We expect to set a public timeline for the complete implementation of the commitments in February 2019.

For more information on ACT, visit actonlivingwages.com

Questions & Answers's

Ensuring workers are paid a living wage is far more complex than simply increasing prices paid to suppliers or the end price of products. Target does not own factories and works through supply partners in sourcing countries. We share suppliers with many other brands and retailers, and our ability to influence wages on our own is limited. Simply paying higher prices is no guarantee that this will result in higher wages for workers. Wages and conditions are determined through national-level minimum wage setting mechanisms, direct negotiations between employers and workers, and in some cases collective bargaining agreements. Effective negotiations between employers’ representatives and trade unions are critical, along with monitoring and enforcement mechanisms, to ensure wage increases are sustainable and benefit workers.

Sustainable improvements in wages cannot be achieved by individual brands or retailers setting time-bound commitments independently of the views of national representatives of employers and workers, along with governments, who ultimately determine wages and conditions for factory workers. The factors that determine wages are complex and require collaboration by brands and retailers, employers, trade unions and government. We believe that effective national minimum wage setting mechanisms, and industry-wide collective bargaining supported by responsible purchasing practices, offers the most sustainable pathway to a living wage.

Yes. We believe that brands and retailers have a responsibility to support higher wages which are negotiated fairly between national-level employer representatives and trade unions as part of comprehensive industry-wide collective bargaining agreements. We cannot expect supply partners alone to simply absorb the impact of higher wages. As part of involvement in ACT, we are working with other brand and retailer members, IndustriALL and our supply partners, on changes to our purchasing practices that would enable us to fairly and transparently isolate wage costs in price negotiations. Along with effective monitoring and enforcement mechanisms, this will enable us to support higher wages through our purchasing decisions, and ensure the benefits flow through to workers.

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