2001-2011 a pivotal decade for textile industry wages in Asia and Latin America

By

Matthieu Guinebault

Translated by
Nicola Mira

Published
Oct 4, 2017

The Worker Rights Consortium (WRC) has analysed the evolution of textile industry wages in the period 2001-2011, revealing marked changes among producer countries, with wages in China rising the most, but always remaining below living wages. 

The WRC's analysis shows that, in 2001, China paid the lowest real wages in the textile industry among all Asian countries. After the decision taken by the Chinese government in 2004 to introduce staggered minimum-wage increases, salaries however began to grow, eventually rising by 124% in ten years. This wage rise brought about an increase in the levels of quality in Chinese apparel manufacturing, to allow the industry to compensate for its cost increases.

China's neighbours have largely benefited from this situation: they took over as suppliers for entry-level products, while they also had to deal with growing wage demands from their workers. The WRC noted that these demands have generated robust salary increases in Vietnam (+40%) and in Indonesia (+38%) in the same decade. Due to its economic situation and proximity to the USA, Haiti too seems to have benefited from this phenomenon, with a real-wage increase of 48%.

However, these positive trends hide a rather different reality. The WRC in fact pointed out how, once "adjusted for exchange rates and purchasing power parity, [textile industry] real wages in the majority of the countries analysed have declined in the decade in question. Real wages in Mexico posted a record 29% decrease, while in Cambodia they decreased by 22%, starting from a very low salary base."

Bangladesh emerged as the main winner after the mutation in Chinese textile output, experiencing a decline of 'only' 2.4%. The WRC study highlighted how this was chiefly due to a quick succession of salary increases at the end of the decade. Even before the 2013 Rana Plaza disaster, which focused the attention of international observers on Bangladeshi manufacturing, the country experienced a long series of strikes and demonstrations, often bloody ones, staged by textile industry workers.

It is worth pointing out that these figures tell only part of the story. For some markets, it is in fact hard to calculate the value of paid overtime, which makes up a large part of textile workers' income in the countries in question. All the more so since, according to the WRC, such overtime often exceeds the ceilings locally set by law.

Another element which puts the figures in perspective is the comparison between the minimum wage and the living wage in the various countries. "In none of the 15 countries included in the study does the prevailing monthly textile industry wage allow workers to reach the equivalent of a living wage," wrote the WRC. The body underlined how, on average, the textile workers' prevailing wage in the countries analysed corresponds to 36.8% of the country's living wage.
 
 
https://cdn.americanprogress.org/wp-content/uploads/2013/07/RealWageStudy-3.pdf