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Basic Food Budget Eats Up Pay of Lahore, Pakistan Econscious Factory Workers

I’ll get to considerations of a basic food budget in Lahore in a moment, but first a review of why I’m interested in the matter:

For a bit less than a month now, I’ve been considering the veracity of claims of CafePress that the Econscious brand shirts it sells are made produced by “sustainable organizations” in accordance with “fair trade practices.” In particular, I’m looking at production in one of the factories that supplies shirts to Econscious — a factory in Lahore, Pakistan. Econscious executives have proclaimed that “Econscious can prove fair labor practices in their factories verifed by 3rd party inspectors. I suggest you remove your article until econscious is given the opportunity to respond.”

Econscious has had three weeks to respond with proof of fair labor practices in their factory in Lahore, Pakistan… but I have not seen that proof. I’ve seen certification of organic processes, and I’ve seen “fair trade” certification of some seed cotton that an Econscious factory in another country buys, but no, I have not seen documentation of fair labor practices in the Lahore factory by an independent third party inspector. Two weeks ago, the President of Econscious told me he would be sending on audit reports on the factory in Lahore, Pakistan, and to his credit he did send me two documents for that factory. They are:

1. An STR Audit report for the winter of 2007-2008
2. Reports of pay of factory workers (unverified by the STR auditor) for the winter of 2007-2008

Until the leaders of Econscious produces public copies of the audits of their factories, as they said they’d do, these two documents are the closest thing to any public proof Econscious has provided to back up its claims (and CafePress’ claims) about the labor conditions of its apparel production.

I encourage you to read the documents carefully. I especially encourage you to read the description of pay reported to have been received by workers producing Econscious apparel at the Lahore, Pakistan facility during the winter of 2007-2008. In that factory, workers are reported to have been paid the minimum wage of 4600 Pakistan Rupees per month during the winter of 2007-2008, plus overtime. The average worker at that factory for Econscious took home PKR. 5344.75 (equivalent to US $89) in a month for an average of 222 hours of work (on average approximately 51 hours a week).

Is that level of pay a “fair labor” practice? Is it a “fair trade” for 51 hours of factory work every week? There are various aspects of “fair labor” and “fair trade” that have been established by groups such as the International Labor Organization and FLO International, but one aspect of them is raising wages up from the level of a minimum wage to the level of a “living wage”. Econscious has been selling its t-shirts for some years now… have the Pakistan producers of Econscious t-shirts gotten their “living wage”?

Well, what is a “living wage,” anyway? One way to answer that question is to ask what the stakeholders relating to industry in Pakistan industry themselves consider reasonable. On that score, Fair Trade producers and labor unions in Pakistan have articulated a much higher standard for pay: 18400 rupees a month and 12000 rupees a month, respectively. Are these wild and crazy standards for Fair Trade producers and the Pakistani labor movement to set? Well, no. They’re actually quite low compared to estimates of the cost of living by the Lahore University of Management Sciences, which tells its potential hires that the monthly cost of living in Lahore is 71,900 rupees a month. None of these standards for a “living wage” are met by the factory Econscious uses in Lahore, Pakistan.

A second way to figure what a “living wage” would be is to define it not by the subjective claims of people in Pakistan, but according to objective estimates of basic human needs. SA8000, an organization Econscious has itself referred to as definitive, defines “living wages” as wages that satisfy “basic needs.” “Basic needs” are further defined by the SA8000 Guidance Document as capable of sustaining 1/2 an average sized family with food, clean water, clothing, housing, transportation, schooling, health care, and a further undefined “discretionary income.”

In a living wage formula, one standard is that housing should cost no more than 30% of income. A UNHCR report on conditions in Lahore, Pakistan — one contemporaneous with available pay reports — places the cost of living in a toxic, fly-infested slum with running sewage located downwind from a garbage incinerator at 7500 rupees a month. Even if two parents each work at the factory full-time (48 hours a week), housing costs in a fetid, toxic slum in Lahore during the winter of 2007-2008 would have cost 82% of the resulting monthly wage of 9200 rupees a month, leaving just 1700 rupees a month for food, clean water, clothing, transportation, schooling, health care, and discretionary income. That’s 1700 rupees a month for two adults to carry — 850 rupees apiece.

Let’s delve further into those monthly costs. The government of Pakistan provides statistics on food prices in Lahore, Pakistan for the fiscal year of 2006-2007. This was a time of rampant inflation, so we can assume that food costs were higher still during the winter of 2007-2008 — but to err on the side of caution, let’s go with the lower food prices for 2006-2007. The government of Pakistan also provided a caloric budget in the form of a food basket for its citizens on the basis of 2100 calories per day per adult:

Food Basket for 2100 Calories established by the Government of Pakistan in the year 2001

Use those resources, do the math for an adult, multiplying out prices per day and multiplying by 30 days, and you’ll get somewhere between 780-800 rupees a month for food. Further assume that this adult has two children, but is only responsible for providing for one of them, and that child requires just 1500 calories a day, and you’ll end up with 1300-1350 rupees a month for food for this part of the “basic needs” budget.

On the factory scale used for that factory in Lahore, Pakistan, after a food budget for 1/2 a family and 1/2 of the cost of housing in a slum, that leaves no money left for a worker to provide clean water, clothing, transportation, schooling, health care, and discretionary income for half a family. Worse, it leaves the factory worker — not providing for any of these additional costs — in 500-550 rupees of debt.

2 comments to Basic Food Budget Eats Up Pay of Lahore, Pakistan Econscious Factory Workers

  • Dear Jim.
    For more than 20 years I have been involved in the design, development and production of apparel for reputable brands. I have worked closely with factories both domestic and offshore. When I started econscious it was with the intention of bringing Certified Organic Cotton products to a broad based constituency. At econscious we work hard to bring quality products to market that have been produced in a certifiable manner according to the most widely accepted international standards. That is why our apparel is produced according to GOTS and certified by Control Union and Oregon Tilth. The GOTS, as you well know from reading the Standard, is recognized globally and includes not only standards concerning fiber production and processing, it also includes social criteria that follow the ILO guidelines. Econscious has gone to great effort to establish a certified supply chain according to GOTS so that our customers can be sure that we follow established guidelines.
    You have been shown the GOTS certifications for our apparel factories. These certifications are the accepted norm for level of proof that the factories have been approved according to the standards . As I promised, I am willing to go the extra mile and forward the actual GOTS audit reports to you so that you can see for yourself how the process is conducted by the certification bodies. We plan to forward these to you within the next week.
    Regards,
    Dale

  • Jim

    To clarify, I have been shown one-page GOTS certificates with the names of factories redacted. As you know, GOTS certificates regard organic status, and while the public GOTS standard is recognized globally as an organic standard it is not recognized globally as the “fair trade” standard (CafePress’ words describing Econscious) or the “fair labor” standard (your fellow executive’s words regarding Econscious). That standard, among producers, is SA8000, (with many non-governmental groups criticizing SA8000 as being too weak). SA8000, as you know, sets the standard for long-term relationships with factories that producers must move away from the legal minimum wage to a wage that meets “basic needs,” hence this series of considerations I’ve written. Econscious has a years-long relationship with the factory in Lahore, Pakistan.

    I am glad you say you are willing to go the “extra mile” of releasing the GOTS audit reports. According to CoOp America, for you to do so is not actually the “extra mile,” but actually the basic level of disclosure all consumers should ask for. I look forward to seeing and sharing those reports.

    If you have specific facts about the living conditions of the Lahore, Pakistan factory workers that would contradict the limited information I have been able to obtain, I would welcome your sharing of that information.

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