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All-Asian coordination of garment industries makes living wages a realistic goal - May 23, 2016

Coordinated action by garment industries in Asian countries can make payment of living wages in these sectors a realistically attainable goal. This is the joint conclusion of two dozen recent expert reviews in the report Wages In Context in the Garment Industry in Asia to the Asian Living Wage Conference (ALWC) 2016. Delegates from nine national garment industries convened in the Pakistani capital Islamabad in the last week of May. From all nine countries production companies, trade unions and governments sent delegates to assess and internationally compare performances and wage levels for the first time. Also end-user representatives participated.

Counterbalance global brands

Such international coordination by Asian garment industries seems to be most effective in counterbalancing the power of global brands. The ascendancy of those global brands over the past few decades went along with heavy investment in Asian garment production facilities (mainly owned by national subcontrators). In the process brands not only helped develop those industries and market their output, but also played off producers in cross country competition for contracts.

 Other instruments the national garment sectors might want to develop, the Asian experts suggested, are to strengthen national social dialogues, invigorate unionization and bolster labour inspectorates. On the other end of the global scale ethical consumer campaigns and boycots are seen to be effective instruments – though not as powerful as coordination between producers on a regional Asian scale would be in driving wages up to decent living levels.

Real wage levels

From amongst the nine Asian countries with sizeable garment industries, real wages in Pakistan, India, Myanmar, Bangladesh and Cambodia are more or less in the same wage range as legal minimum wages. In this same range the lower bound living wages for the individual are situated, as calculated by WageIndicator.  Cambodia is the only country where the living wage settles slightly below the lower bound minimum wage. For the other countries the individual living wage ranges somewhat higher than the lowed bound minimum wage: i.e. Pakistan 8%, India 14%, Bangladesh and Myanmar 29% each. Here the gaps are small enough to make closing them realistic options in the short and medium term. However the situations are more dramatic in Sri Lanka, Indonesia and Vietnam, affecting millions of, particularly, young female workers. In those countries the gaps are much wider. Unfortunately, for China insufficient data could be collected for inclusion in this first ever Asian garment industry wages survey. For a full picture see the box  Wages in Context below.

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It should be noted here that the picture becomes more dramatic if one imagines situations in the garment industry workers are the only working member in a household. The living wages calculated for typical families in all countries are at least double those of the real wages individual workers get.

WageIndicator Cost-of-Living and Living Wage levels calculations

WageIndicator maintains a Cost-of-Living survey with related Living Wage calculations, as well as a Work-and-Wages survey, a Minimum Wages Database, and a Labour Law Database for some 80 countries. For this report, WageIndicator intensified the Cost-of-Living data-collection in the nine countries, and interviewed experts from the nine countries regarding the hurdles to implement Living Wages.

Three features are critical in the WageIndicator Living Wage computations. First, they are based on the cost of living for a predefined food basket derived from the FAO database distinguishing 50 food groups with national food consumption patterns in per capita units (checked to ensure the percentage of calories from proteins is consistent with WHO balance diet), for housing and for transportation, with a margin for unexpected expenses. Second, data about prices of these items is collected through a survey. For this purpose, the Internet is used as it reaches out to large numbers of people. This WageIndicator Cost-of-Living Survey invites web visitors on all WageIndicator websites to complete the survey for a single item or for the list of items. The survey is a multi-country, multilingual, continuous web survey, with a printed version and an App for offline data-collection. Third, in determining a Living Wage, WageIndicator assumes the Living Wage for a typical family referring to the family composition most common in the country at stake, calculated on the respective fertility rates.

See for information: Guzi, M., and Kahanec, M. (2014) Wageindicator Living Wages, Metho­dological Note. Bratislava/Amsterdam: CELSI/Wage; Guzi, M., Kahanec, M., Kabina, T. (2016) Codebook of the WageIndicator Cost-of-Living Survey. Amsterdam: WageIndicator Foundation

WageIndicator Foundation (www.wageindicator.org; office@wageindicator.org)

WageIndicator started in 2001 to contribute to a transparent labour market for workers and employers by publishing easily accessible information on a website. It collects, compares and shares labour market information through online and face-to-face surveys and desk research. It publishes the collected information on national websites, thereby serving as an online library for wage information, Labour Law, and career advice, both for workers/employees and employers. The websites attract a large audience, because they publish urgently needed but usually not easy accessible information, in 2015 resulting in more than 32 million visitors.

Full report: Wages in Context in the Garment Industry in Asia