WRC Report on Global Wage Trends for Garment Workers

To:WRC Affiliate Universities and Colleges
From:Scott Nova and Ben Hensler
Date:July 11, 2013
Re:WRC Report on Global Wage Trends for Garment Workers

The failure of garment factories in the world’s leading apparel-exporting countries ‒ including the top producers of collegiate apparel ‒ to provide wages adequate to support the basic needs of workers and their families is a longstanding concern of the WRC. Even more troubling, however, is the reality that, for garment workers in many of these countries, the gap between the wages they are paid and a minimally-adequate living wage has actually widened over the last decade.

Today the Center for American Progress, a leading Washington, DC-based nonpartisan public policy institute, released a study researched and authored by the WRC that examines wage trends for garment workers in 15 of the world’s leading apparel-exporting countries. 
The report released today, entitled “Global Wage Trends for Apparel Workers,” finds that between 2001 and 2011 wages for garment workers in the majority of these countries fell in real terms, making it even harder for workers to afford the minimum necessities of a decent life. A comparison of prevailing wages to the local cost of a minimally decent standard of living for an average-sized family in these countries confirms that garment workers still typically earn only a fraction of what constitutes a living wage—just as they did more than 10 years ago.

The report examines trends from 2001 to 2011 in real wages for apparel-sector workers in 15 of the top 21 garment manufacturing countries in terms of exports to the United States. 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 in these countries 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 legal minimum wage, in part in order to limit worker unrest. In addition to governmental action to increase minimum wages for garment workers, the report also urges greater respect for the rights of freedom of association and collective bargaining to empower workers to negotiate wage increases, and greater willingness on the part of international manufacturers and buyers to absorb added labor costs rather than applying downward price pressure through the threat of exit.

Please feel free to contact us with any questions regarding this subject and the findings of this report.  

Scott Nova 
Worker Rights Consortium 
5 Thomas Circle NW, 5th Floor 
Washington DC 20005 
ph  202 387 4884 
fax 202 387 3292 
[email protected]