June 2019

...The ACT MOU lacks clarity on wages – minimum wages, living wages, and statutory wage. It has no quantifiable definition of living wage and claims, without substantiation, that incremental and continuous growth in minimum wage or nationally bargained wage will lead to living wage.

ACT insists on national-level solutions for what is a global supply chain problem. It claims to take wage out of competition but in fact, it does just the opposite. By refusing to acknowledge the regional nature of competition and FOB price as the node of competition, it essentially distracts and diverts from the core issue.

ACT keeps brands out of the ambit of enforceable binding agreements by claiming that brands will support once the national actors sign the binding agreements. This is a “national process” being forced by brands on self-selected pilot countries without any binding action on their part.

The danger runs deeper. Brand signatories use ACT to claim that they are involved in paying living wage when in fact, they are only involved in national processes for incremental increase in minimum wage or bargained wage which are inadequate in delivering living wage within a global supply chain context.

ACT can provide incremental minimum wage increase or bargained wage but its claim to provide for living wage is not consistent with the mechanism and strategy provided in the ACT. However in the current scenario ACT is being used as an alibi for brands to exempt themselves from genuine living wage delivery processes.