Center for American Progress

RELEASE: Garment Worker Wages Declined in Majority of Top Apparel-Exporting Countries over the Last Decade, New Study Reveals
Press Release

RELEASE: Garment Worker Wages Declined in Majority of Top Apparel-Exporting Countries over the Last Decade, New Study Reveals

Read the report.

Washington, D.C. — Garment workers in many of the leading apparel-exporting nations not only face not dangerous conditions, such as the recent deadly factory collapse in Bangladesh that killed more than 1,000 workers, but the inadequate wages they are earning for their long hours of labor have diminished even further over the past decade, according to a new report released today by the Center for American Progress and the Just Jobs Network. The study, prepared by the Worker Rights Consortium, examines 15 of the world’s leading apparel-exporting countries and found that between 2001 and 2011, wages for garment workers in the majority of these countries fell in real terms, making it nearly impossible for them to afford the minimum necessities of a decent life.

“The most troubling news in this report is that even in countries like Bangladesh and Cambodia—where wages were the lowest and least adequate for workers’ needs—workers’ pay actually stagnated or declined over the last decade,” said Ben Hensler, author of the report and deputy director of the Worker Rights Consortium. “This finding underscores the urgent need for those with the greatest power to lift garment worker wages—not just the governments of these countries, but also the U.S. and European brands and retailers that buy the apparel these workers produce. Meaningful action must be taken to raise minimum wages, pay fairer prices to factories, and give workers the freedom to form unions and bargain collectively on their own behalf.”

The report, entitled “Global Wage Trends for Apparel Workers,” found that the gap between prevailing wages—the wages paid in general to an average worker—and living wages for garment workers in these countries has only widened. A comparison of prevailing wages to the local cost of a minimally decent standard of living for an average-sized family finds that garment workers still typically earn only a fraction of what constitutes a living wage—just as they did more than 10 years ago. While these workers may not live in absolute poverty, they live on incomes that do not provide them and their families with adequate nutrition, decent housing, and the other minimum necessities of a humane and dignified existence.

The report examined the trends from 2001 to 2011 in real wages for apparel-sector workers in 15 of the top 21 manufacturing countries. Key findings from the study include:

  • In nine countries—Bangladesh, Cambodia, the Dominican Republic, El Salvador, Guatemala, Honduras, Mexico, the Philippines, and Thailand—the prevailing real wage for apparel-sector workers in 2011 was less than it was in 2001. That is, apparel-sector workers in the majority of countries studied saw their purchasing power decrease and slipped further away from receiving a living wage.
  • In the six countries where real wages increased from 2001 to 2011, wage growth in two of the countries, Peru and India, was modest—less than 2 percent per year when adjusted for inflation. While wage gains for workers in Indonesia, Vietnam, and Haiti were more substantial, it would take more than 40 years for the prevailing wage rate to equal a living wage even if their recent rates of real wage growth were sustained.
  • Only in China did real wages for apparel-sector workers increase at a rate that would lift workers to the point of receiving a living wage within the next decade. Not surprisingly, the industrial centers in China where workers benefited from these gains have already seen a loss of apparel production, as manufacturers have shifted their facilities, and buyers have shifted their orders, to lower-wage areas both within China and in other countries.

A key reason that the prevailing wage increased in China is that the government substantially increased the mandated minimum wage, in part in order to limit worker unrest. Because minimum wages in most of the countries studied are both sector and job specific, this points to one possible way forward for increasing workers’ compensation. In addition to increasing minimum wages, the report’s authors also urge countries to respect the rights of union organization and collective bargaining to empower workers to negotiate wage increases on their own that could help lift workers toward a living wage. However, it’s important to note that gains will only be sustainable if manufacturers and buyers are willing to absorb the added labor costs, rather than applying downward price pressure through the threat of exit.

“This report shows how much work remains to be done to bring jobs with living wages and good working conditions to people around the world. Doing so will promote human dignity and economic welfare for employees and businesses because workers with higher incomes consume more,” said Sabina Dewan, Director of Globalization and International Employment at the Center for American Progress. “Governments and major brands should work with suppliers to change the apparel industry into one with safe factories, decent wages, and respect for workers’ rights.”

Read the report: “Global Wage Trends for Apparel Workers, 2001-2011

To speak with an expert on this topic, contact Katie Peters at [email protected] or 202.741.6285.