State of California Asked WRC to Deliver Living Wages to Workers Making Masks

To:WRC Affiliate Universities and Colleges
From:Ben Hensler, Bent Gehrt, and Scott Nova
Date:January 24, 2022
Re:State of California Asked WRC to Deliver Living Wages to Workers Making Masks

Last year, the State of California’s Health Benefit Exchange, known as Covered California, asked the WRC to assist this public agency by monitoring the factory’s labor practices and coordinating the distribution of an innovative “living wage supplement” that Covered California chose to provide for workers in Vietnam at a factory producing protective cloth face masks.

The face masks were distributed free of charge by Covered California to two million healthcare coverage subscribers and their families across the state, as a public health measure during the Covid-19 pandemic and a promotional measure during the exchange’s 2021 enrollment period. The WRC worked with Covered California’s contractor, California-based Aiden Health, Inc., to distribute the living wage supplement to nearly 500 workers at Can Man Garment, the factory in Vietnam where the masks were produced, and to engage with the factory’s management concerning its labor practices.

Between November 2020 and June 2021, the WRC coordinated and monitored the transfer and distribution to nearly 500 workers at the Can Man factory of a $420,000 supplement—equivalent to 10 cents per mask—that Covered California provided to ensure that workers received a living wage while producing Covered California’s masks. Each of the factory’s workers received on average, in addition to their regular wages from the factory, an extra US$868—the equivalent of slightly more than four months’ additional wages. The WRC verified that the supplement ensured that all 483 workers employed by the factory received an actual living wage during the period when the masks were produced.

Glaring discrepancies are often seen between the claims made by many major brands that they are making progress toward providing living wages for the workers who make their products—or even that they are providing them already—and these same brands’ repeated and ongoing failures to guarantee that workers in their supply chain receive even legal minimum wages, much less a true living wage. Given this, Covered California providing a living wage for the workers at Can Man while its masks were made at the factory is a significant accomplishment. Though limited to a single factory, over only a very limited period, Covered California’s provision of this supplement is a demonstration of the potential for buyers that are willing to pay a modest premium on the prices of their products to have a substantial positive impact on the wages, and lives, of the workers in global supply chains who make them.

Unlike the former Alta Gracia facility in the Dominican Republic, which, until its closure last year, produced living wage apparel for the university bookstore market, Can Man, the factory that produced the masks for Covered California, is by no means a “model factory”. The WRC also assessed the working conditions at the factory for Covered California and, as is typically our experience at factories in the region, we documented practices that violated local labor laws and international labor standards. These, along with the payment of the living wage to workers, are detailed in our full report on this factory, which you can find here.

This case, then, is a small demonstration of the important point that a living wage for garment workers does not require a radical overhaul of purchasing practices in the global apparel industry. It simply requires buyers doing business with ordinary factories to be willing to pay a quite modest premium for the products they buy (here, 10 cents per unit) and to cooperate with an independent monitoring body like the WRC to ensure that these funds reach the workers who make them. In other words, it is a question of will: Are brands willing to live up to the principles they espouse by, instead of extracting the absolutely lowest possible price for each garment they purchase, choosing to spare a dime for workers and their families?

Covered California, with its simple decision to include an extra dime per mask in its order for face masks, so that the workers who made them could have a living wage, has shown the difference this choice can make. As always, please let us know if you have any questions.