Fashion Industry under Scrutiny: Hardly any Companies pay Living Wages
Consumers worldwide are placing increasing value on sustainable fashion – including in Germany. According to the Mintel Report “Germany Sustainable Fashion Market 2024,” 40 percent of Germans demand more transparency across the entire product life cycle. Younger consumers in particular are placing sustainability much higher on their agenda. Against this backdrop, we took a close look at the global fashion industry – with sobering results: despite growing consumer expectations, almost all large corporations do not pay their employees a living wage and do not provide sufficient disclosure about where and under what conditions their products are manufactured.
The US dominates the fashion industry, with Germany in the middle of the pack
With 68 fashion companies, the US leads the global ranking, followed by the UK (25), Italy (21), France (18), and Germany (17). Countries such as Belgium, Denmark, Finland, and Ireland, on the other hand, each have only one brand.
Living wages remain the exception
Particularly alarming: 213 of 219 fashion companies demonstrably do not pay living wages (category E) . Only six companies—including brands from the US, the UK, Germany, and the Netherlands—make it into category D (1-25 percent of employees receive a living wage ). None of the companies achieve categories A to C. Although 58 companies have publicly committed to introducing living wages, only five brands have concrete action plans in place. Even rarer is the disclosure of freedom of association and collective bargaining agreements: only 20 corporations publish data on this – four of them from Germany. This shows that the German fashion industry is at least making initial progress in terms of transparency compared to many other countries.
“The fashion industry thrives on creativity and global influence, yet it continues to fall short on its most fundamental responsibility—ensuring fair and dignified wages for workers. Paying a living wage is not a luxury; it is the baseline of ethical business practice. In Europe, Germany stands out as a clear leader, not only through its efforts in sustainability and transparency, but also due to the substantial economic weight of its fashion sector. According to the 2024 ‘Status Deutscher Mode’ report from Fashion Council Germany, produced with Oxford Economics and eBay Germany, the industry generated around €29 billion in gross value added and supported nearly 1 million jobs in 2023. These figures underscore its foundational role in the economy—yet with such scale comes responsibility.” explains Dr. Gemma Vallet, Vice Dean of the Faculty of Economics and Business Administration and expert in fashion and brand management at BSBI.
Lack of transparency in supply chains
The analysis also looked at how openly fashion companies present their supply chains – whether it is possible to trace where and under what conditions production takes place. The scale ranges from 1 to 5 stars: 5 stars stand for complete disclosure, 1 star for minimal transparency. On average, the 219 fashion companies surveyed achieved only 2.69 out of 5 stars for transparency in their supply chains. The frontrunners are Switzerland, Sweden, Norway, Hong Kong, Denmark, and Belgium with the highest rating (5 stars). The Netherlands (4 stars) and Germany (3.53 stars) are also in the upper range. At the bottom of the list are China, India, Korea, Poland, Singapore, Turkey, and the United Arab Emirates (only 1 star each).
“The results make it clear that economic success in the fashion industry has so far rarely gone hand in hand with fair labor standards. 213 out of 219 companies still do not pay a living wage – a global failure. The situation is particularly striking in Germany: although German fashion companies are showing initial progress in transparency compared to their international counterparts, almost all of them are falling behind when it comes to fair wages. At the same time, a recent study shows that 40 percent of German consumers demand more transparency along the entire supply chain. This discrepancy between consumer demand and corporate practice shows how urgently a rethink is needed.” explains Dr. Gemma Vallet. “This is exactly where BSBI’s Fashion and Luxury Brand Management Professional Master programme comes in: we equip students to combine sustainability, transparency, and economic efficiency, empowering the next generation to transform the industry in a truly sustainable direction.”
About the study
The analysis is based on data from fashionchecker.org, an international platform that monitors transparency and fair wages in the fashion industry. The aim is to give consumers and textile workers access to reliable information about the world’s largest fashion brands. For the study, 219 fashion companies from 28 countries were analyzed based on five criteria:
- Country of headquarters
- Transparency in the supply chain (rating 1–5 stars)
- Payment of living wages (categories A–E, from 100% to 0%)
- Action plan for living wages (yes/no)
- Public commitment to living wages (yes/no)
- Disclosure of freedom of association and collective bargaining coverage (yes/no)
1 Categories A–E indicate whether the brand uses an established method for determining a living wage and monitors whether workers receive this wage. A = 100% B = more than 50% C = 26-50% D = 1-25% E = 0%
2 Payment of living wages