Living wage versus minimum wage: the supply-chain question buyers are starting to ask
A living wage is one of the sharpest questions in childrenswear right now, and it starts with a distinction not everyone draws. A minimum wage is the lowest amount the law says an employer can pay. A living wage is what a worker actually needs to cover the basics, food, housing, healthcare, and to put a little aside. The two are not the same, and the gap can be large. In some garment-producing countries the legal minimum is only a third, or even a tenth, of a genuine living wage.
From our own research, the clearest recent picture comes from Baptist World Aid's Ethical Fashion Report 2024, which studied 120 companies across 460 brands. It found that nearly 89% could not show they pay a living wage at any final stage of their supply chain, and only two of the 120 could actually confirm they did. That is an apparel-industry figure rather than a childrenswear-specific one, so if you know of better or more targeted data for our sector, we would genuinely love to see it.
This is also about to get harder to sidestep. The EU's Digital Product Passport, arriving for textiles from around 2027, will require brands to trace and disclose far more about how and where a product is made. The direction is unmistakable: the supply chain moves into the open. So ask your suppliers the right questions now, so you can answer a buyer with confidence and know you have done everything you can to see the people who make your products treated fairly.
FREQUENTLY ASKED QUESTIONS
What is the difference between a living wage and a minimum wage?
A minimum wage is the lowest amount the law requires an employer to pay. A living wage is what a worker needs to cover basic needs such as food, housing and healthcare, is usually higher, and is voluntary.
How many companies actually pay a living wage?
Baptist World Aid's Ethical Fashion Report 2024 found nearly 89% of the 120 companies studied could not show a living wage at any final stage of their supply chain; only two could confirm they did.
How will the Digital Product Passport affect supply-chain transparency?
The EU's Digital Product Passport (textiles from around 2027) will require brands to trace and disclose far more about how and where products are made, making supply chains, and how workers are treated, harder to keep vague.
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