International Workers’ Day or ‘Labour day’ is a national holiday in many countries celebrating the successes of the Labour movement in securing decent working conditions and advocating for the rights of workers.
Yet, for the majority of garment workers across the world, there is limited cause for celebration. Despite commitments from major fashion brands, in 2025 workers in 28 key garment-producing countries earned on average only 41% of a living wage, based on the Wage Indicator Foundations’s benchmarks. Further, studies conducted by the Asia Floor Wage Alliance have highlighted that garment workers in Asia are in nutritional deficit, consuming significantly below levels of international poverty standards. During the COVID-19 pandemic, workers in garment factories in the UK were paid as little as £3.50/hour. Long working hours to fulfil enormous production quotas, lack of health and safety measures, and limited access to trade unions remain the lived experiences of many garment workers.
Low wages and poor working conditions are the hallmark of the fast fashion business model. Without exploiting workers, fast fashion retailers are unable to produce at the volumes, speed, nor prices, which they currently deliver.
Securing higher wages, safe working conditions and reasonable working hours is thus vital to stem textile overproduction and the huge environmental footprint of the sector. One study suggests that increasing wages for garments workers by $100 a week (approximately what is needed to reach living wage benchmarks in Bangladesh and India), would lead to reduced production volumes and a reduction of 65.3 million tons Co2eq. Furthermore, by turning off the tap on cheap fast fashion garments, circular activities such as repair, resale and rental become economically viable for brands to pursue at scale.
It sounds like a straightforward solution, and one that could yield major environmental benefits while advancing equity and justice. So why hasn’t it been implemented?
The main reason stems from the unequal balance of power which exists in the fashion supply chain. Brands and retailers hold the upper hand in contractual negotiations and production coordination, allowing them to dictate terms and conditions that benefit them. This can include delivery time frames, product prices, and purchasing terms. Commercial relations between brands and suppliers in Europe, let alone worldwide, are volatile, risky, and imbalanced. Widespread small and fast orders characterise the European garment manufacturing sector with already dramatic business-to-business power imbalances, giving buyers even more influence in defining terms and conditions than elsewhere. In garment manufacturing countries in the EU, such as Romania, Croatia or Italy, undeclared subcontracting without labour protections is common, due to price squeezing by buyers.
Take for instance delayed or long payment terms, a common practice within the industry, in which the supplier will not be paid for up to 90 days after completion of an order. This means factories must shoulder the entire cost burden and if a product does not sell well, they may find retailers do not pay them at all. When this happens, wages and working conditions become the adjustment variables at the end of long supply chains.
On the flipside, short lead times for orders and last minute order changes have significant impacts on working hours: In fact, an ILO study found that when less than 50% of orders have sufficient lead times, workers work on average 25,000 hours more per year per supplier. In order to be able to produce within this timeframe, suppliers may force their employees – and by extension their own suppliers’ employees – to work overtime and cut corners in terms of breaks and other workplace standards.
The power dynamics take a massive toll: If a supplier objects and demands better conditions, retailers can simply take their business elsewhere – which can leave suppliers exposed to bankruptcy and workers to lay-offs. In the first half of 2024 alone, for instance, Indonesia recorded nearly 50,000 layoffs as factories closed down amidst reduced orders, and in Türkiye, 15,000 companies closed, according to the Business and Human Rights Resource Centre tracker. This threat of relocation leads to the classic ‘race to the bottom’ – a quintessential feature of globalisation – in which suppliers’ lower wages, weaken environmental standards, or reduce workers’ rights to remain competitive.
The recent US-imposed tariffs have brought about fears about further adverse impacts on workers in garment-producing countries. The tariffs could mean significant job losses and downward pressure on wages for workers. In fact, they already have. Brands at the top of supply chains, such as Gap, Walmart and Levi’s have reportedly already started to demand reduced pricing or urged suppliers to carry the burden of the tariffs in its entirety.
Without addressing this balance of power and the unfair purchasing practices of fashion retailers, fair wages and working conditions will remain out of reach, and the fast fashion business model will continue to run at full speed.
The EU has long acknowledged the unfair trading practices which exist in the textiles supply chain. For the last 10 years it has been an issue on the policy agenda, and yet progress has been virtually non-existent. In 2019, the EU adopted legislation that bans 16 unfair trading practices in the Agri-food sector, offering a template for how these parallel issues could be addressed in the fashion industry.
Given competitiveness is a key North Star for the new European Commission, attention to unfair trading practices should be front and centre of their agenda. The asymmetric power of large fashion retailers within global supply chains is highly uncompetitive. Competitiveness after all, relies on supply chains that are resilient to shocks, and in which suppliers with less bargaining power have the resources to invest and innovate.
Ultimately, if the EU wants to deliver on its Sustainable and Circular Textile Strategy, which promised to take ‘Fast Fashion out of Fashion’, addressing the issue unfair trading practices in textile supply chains cannot be ignored.
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This blog written in collaboration with Hot or Cool Project Coordinator Hedda Roberts. Read more about Hedda’s work.
