Monday, 14 March 2016

A Lidl Exploitation: The Hidden Costs Behind A Pair Of Cheap Jeans

A good, deep dive down the rabbit hole was taken by Gethin Chamberlain of The Guardian last week, as he did the maths behind the latest fast fashion faux-pas: the £5.99 jeans sold by Lidl. So what is the German retail giant's secret?

Well, those of us in the know won't need much time to figure out how that price point was reached. It's down to cheap labour, of course. The worrying thing is, you have to wonder how many of Lidl's customers realise how little the people who make those clothes are really paid.

The figures are shocking. The jeans are made in Bangladesh, using female workers that are paid the minimum legal wage of 5300 takas a month. That's a fifth of the amount estimated to be a living wage by the Asia Floor Wage Alliance back in 2013. 5300 takas is about £48. So, based on the standard 8-hour day, 6-day week, LIdl's workers bring in a princely 23p an hour. Or, to use another metric, a worker is paid somewhere between 2p and 9p per garment stitched.

Of course, things get a little trickier when we realise that these figures are, to an extent, based on best guesses and informed estimates. As ever, the opacity of supply chain reporting works in the big brand's favour. They can claim that their workers are treated fairly, and that they audit very facility. But they hardly ever publish the results. Without the ability for independent observers to verify those claims, it's sorta tough to call them liars–although you do wonder why those figures aren't being published.

Regardless, it's hard not to agree with Gethin's conclusion: Lidl's bargaining power in the marketplace and choice of manufacturing base are the prime drivers of the absurdly low price point on their jeans. No-one brings work to the clothes factories of Dhaka because they're exemplars of ethical practice. There's an old saying when it comes to service and manufacturing–there's fast, cheap and good: pick any two. Seems pretty clear which way Lidl went in this case.

For the full breakdown, check out the article:

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