Industry-specific Risk Factors

Working poverty caused by low wages is a global issue and prevalent in many different industries. The two industries below have been chosen as examples, as there is a wide range of research available as well as actions that businesses in those industries can take to improve the wages of their employees and supply chain workers. To identify potential risks related to low wages for other industries, companies can access the CSR Risk Check.

The agricultural industry is vulnerable to poverty wages for workers due to the seasonal nature of work, high prevalence of informal or illegal workers, and the remote nature of a lot of agricultural work, which leaves workers exposed to exploitation and removed from sources of remedy. According to the Global Living Wage Coalition, the concepts of a “living wage” and a “living income” are particularly pertinent when looking at the agricultural industry. While both are about achieving a decent standard of living for households, the idea of a living wage is applied in the context of hired workers (in factories, on farms, etc.), while living income is applied to the context of any income earner, such as self-employed farmers.

Many campaigns and initiatives exist to promote both living wage and living income for agricultural workers, such as the Fair-Trade Foundation and the Living Income Community of Practice.

This industry has traditionally been highlighted as one that is rife with human and labour rights violations, including low or withheld wages. Due to COVID-19, in 2020 and 2021, many garment workers have received reduced wages due to cancelled orders, or in some cases have not been paid at all. In response to these risks, the UN Global Compact endorsed a call to action — the COVID-19: Action in the Global Garment Industry — convened by the ILO and coordinated by the International Organisation of Employers (IOE) and the International Trade Union Confederation (ITUC), and including brands and manufacturers, workers and employer organizations, and Governments. Examples of other campaigns and initiatives that aim to improve the wages and working conditions of garment workers include ACT, Labour Behind the Label and Fair Wear Foundation.

Workers in the industry are vulnerable to low and inadequate wages for several reasons, including the high sensitivity to economic factors such as the price of clothing in target markets and a lack of strong labour right enforcement in garment-producing countries in South-East Asia. Furthermore, many garment workers are women and home-based workers, who are usually paid less than their male counterparts.