Supply Chain Innovation


Over the course of 2015, the FLA used its factory assessment cycle to collect baseline data on worker compensation levels in 124 mainly apparel and footwear factories employing 135,000 workers in 21 countries.  Using the following uniform calculation of compensation, the FLA has plotted factory compensation levels onto a series of “wage ladders” that compare actual compensation paid to local benchmarks like legal minimum wages, poverty thresholds, and living wage estimates.
Compensation = Basic Contracted Wage + Cash Benefits + In-kind Benefits
– Mandatory Taxes and Legal Deductions and Taxes
These “wage ladders” do not represent endorsement of specific compensation levels as goals, but the report does provide a risk rating of the 21 countries described within.  This rating provides context for companies on where the purchasing power of workers' compensation is the weakest and progress on fair compensation is most urgent.