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For a few cents more

Globalization
Heads down and with not a moment to spare: women workers stitch garments for fast-fashion foreign brands
at a factory on the outskirts of Dhaka, Bangladesh. MEHEDI HASAN/NURPHOTO/PA

Dinyar Godrej: Big transnational corporations roam the world looking for the cheapest labour. How does this race to the bottom play out in Asia, home to the largest number of garment workers?

Anannya Bhattacharjee: The garment industry settled in Asia some time ago – and we think it will stay for some time to come – because Asia has a lot of advantages: the large pool of cheap labour, raw materials and infrastructure, and simply the scope and scale of production that is possible.

Clothes are made mainly in countries in South and South East Asia, where wages are lowest. Global brands think regionally – that’s how the global supply chain plays out.

They look on Asia as a region because they can find an average wage labour cost there. The individual countries – India, Bangladesh, Sri Lanka, Pakistan, Indonesia, Cambodia, Vietnam, Myanmar among others – also compete between themselves to keep wages low, to attract more orders. The brands subcontract their production to Asian suppliers in these countries and then you have Asian suppliers, supported by Asian governments, competing for those orders.

As long as garment workers are paid as little as they are, we will continue to have this race to the bottom, not just in the garment industry but in the labour force in general because it drags down all other wages.

What are conditions like for garment workers in Asia now? What are garment workers expected to do in return for these low wages?

The fashion industry is changing. The advent of ‘fast fashion’ means that it’s no longer just a few fashion cycles in a year. Brands tend to maximize their profits by over-production and over-consumption, so they are continuously producing more and more clothes by increasing their number of fashion cycles and then convincing the consumer to buy them – even if there may be clothes in their closets which have been unworn for years.

This acceleration is causing severe stress in the lives of garment workers that goes beyond the poverty-level wages they are subjected to. Workers are being subjected to forced overtime and inhuman productivity targets, which they are simply unable to maintain. They cannot go to the toilet; they cannot take breaks.

The brands are also clamping down on the prices they pay to the Asian suppliers, whose margins are shrinking. We are left with a fashion industry that is producing clothes – at great environmental cost – which cannot be consumed as fast as they are being produced and they cannot be produced as fast as brands would like because there’s a limit to how much human beings can work.

Workers are being subjected to forced overtime and inhuman productivity targets. They cannot go to the toilet; they cannot take breaks

We have workers whose wages are at poverty levels and who have no life, which then impacts on unionization, because if people are working all the time – often seven days a week plus overtime – and underpaid, then you have employees who don’t have even an hour spare to meet, to develop a collective voice for addressing their own concerns.

How did the Asia Floor Wage Alliance (AFWA) come into being?

AFWA came about around 2007. The competition between Asian countries made us come together because garment unions found that they were unable to increase the wages of workers in any one country. If the union fought for a raise they would be told by suppliers that (a) ‘we don’t have enough money because the brand’s prices are too low’ or (b) ‘if we do raise wages, the brand’s prices will have to increase so they will relocate their production elsewhere’.

We said that if Asia is producing most of the world’s clothing and the brands’ strategy is regional then we have to come together as a bloc of labour in Asia and bargain with the brands directly.

By our analysis, the primary employers in the global garment supply chain are the global brands. The supplier factories are only sub-contractors, who are definitely obliged to follow national laws on statutory minimum wages. But if we want to raise wages above the poverty-level minimum wage, or fight for working conditions that are being impacted by brands’ purchasing practices, then we have to bargain with them directly.

We were also aware that Asian governments don’t increase the minimum wage because they want to make sure that Asian suppliers get their orders from the global brands. So we have a suppression of minimum wage and brands that pit one country against another for just a few cents.

The labour-cost percentage of the retail price for clothes sold in Europe or the US today is very low, oscillating between 3 and 10 per cent. Surveys of consumers have shown that they’re willing to pay the very small additional amount for Asian workers to get a living wage.

It amazes me that brands find this so difficult and continuously fight against the raising of garment workers’ wages when the money could easily come out of profits (which would be a very small percentage) or they can pass on the costs to the consumers, which they are willing to pay.

What does AFWA want to achieve?

One of the most important things AFWA has done is formulate the idea of a cross-border minimum living wage, for the first time: the Asia Floor Wage. By that we mean that this is the ‘floor’ of the living wage, not the ceiling; the living wage can be higher but it should not go below this.

We said: ‘This is what we want the brands to pay across Asia, so it is not paid in one country versus another.’ The supplier factories in Asia should pay the statutory minimum wage of the country. But the brands need to pay the gap between that and the Asia Floor Wage, which is on average three times the minimum wage. This gap is a very small percentage of profits. Why not pay living wages for workers who produce your clothing?

AFWA also works on gender-based violence in the workplace…

We don’t look at gender-based violence solely through the narrow lens of sexual assault but as a fall-out of gendered industrial relations. The global garment industry’s strategy is based on exploiting the vulnerability of a predominantly women-only workforce.

If you go to the factory and every day on the production line you face physical and verbal abuse – which is a strategy supervisors use because they have to hit the productivity targets on time at a low cost – it corrodes a woman worker’s sense of self and keeps women in fear and subservience. So, the gender-based violence of the production line emerges as a consequence of the brands’ purchasing practices.

Apart from this violent behaviour on the production line, which is used to discipline staff to work faster and harder, there are factory-wide employment practices – such as illegal termination, underpayment, wage theft, and attacks on freedom of association.

What gains have you made so far with AFWA?

The recognition of an Asia Floor Wage has been a big victory, which took years. When we first announced it, the brands completely dismissed us. First they said, ‘we’re already paying the living wage’, by which they meant they are paying the poverty-level minimum wage. And then they were like, ‘your living wage figure is unrealistic, it’s too high’.

For two or three years they argued with us. And now the Asia Floor Wage is a credible and legitimate living wage benchmark across the industry, and has garnered the respect of the International Labour Organization. And pretty much any wage report on the garments sector refers to it.

It amazes me that brands continuously fight the raising of wages when the money could easily come out of profits -- which would be a very small percentage -- or they can pass on the costs to the consumers, which they are willing to pay

Now there is tremendous pressure on the brands to do something, so they have started a bunch of whitewashing strategies – they created a Fair Wage Network, they developed a memorandum called ACT [Action Collaboration Transformation]. All these so-called ‘volunteer efforts’ of the brands, which do not bind them to anything and where the onus is always on the supplier and the local government, are a kind of public relations.

It is now globally accepted – not by the brands perhaps, but by the wider group of people who care about garment workers’ human rights – that brands should have enforceable and binding agreements to pay the living wage. It should no longer be ‘we will try…’, ‘we will encourage…’, ‘we will enable…’. None of that language works any more. Their primary responsibility as principal employers of the global supply chain is now a well-established fact.

I would say these are victories. Of course, money has not yet reached the workers’ pockets. So obviously we cannot say we have won until the workers get their living wage.

What happens next?

There are many garment unions in Asia even though it is a very tough industry to organize. We organize, we fall back, we organize, we fall back; it’s that type of scenario.

Asia Floor Wage Alliance is a social alliance of trade unions as well as labour rights organizations and NGOs. We believe that in an industry like this it’s important that trade unions lead but that they are supported by others that can research, campaign and add power to the movement in general.

International connections matter too. AFWA is led from Asia but we have partners in Europe and the US – it’s of critical importance for us to work with organizations in the Global North where the brands are headquartered: we have to build power together.

Watch the compelling documentary ‘Living Wage Now!’  

How the Asia Floor Wage is calculated
It is based on 1 worker being able to support: 2 adult dependants or 1 adult and 2 children or 4 children
The monthly salary allocation: 50% – food, 40% – clothing, housing, travel, education, health, 10% – discretionary income (for entertainment, savings and the like).
It is calculated in ‘purchasing power parity dollars’ (PPP$). This is an imaginary currency which allows for comparison in earnings in terms of purchasing power.
The target monthly Asia Floor Wage is PPP$1,181, which is equal in terms of purchasing power to what this amount in US dollars would be able to buy in the US.
But in real currency exchange terms the amount is much lower – for example, PPP$1,181 expressed in actual dollars for India is $327.

A living wage for the world?

It seems like a pipe dream in a world in which labour regulations have been decimated. But a ‘global minimum wage’ set at a level that would give workers the chance of a decent life would lift hundreds of millions out of poverty.

How would it work? One formulation comes from US economist Thomas Palley, who figures that such a minimum wage could be set by countries at 50 per cent of their median wage (the point at which half the workers are paid more, and half less). This would involve a politically difficult redistribution from the super-rich. All countries would be bound by the same rule but they would be free to set the minimum wage higher if they so wished. For very low-income countries where this median point would still be below the poverty line, the wage would need to be set above it.

The minimum wage would automatically fluctuate in line with wage movements in general. It would be determined by each country’s local economic conditions, thus importantly maintaining the comparative advantage that some countries have through cheaper labour.

The benefits would be considerable. Unlike current minimum wages – which are usually woefully inadequate, where they exist – it would offer security, make a significant dent in inequality and boost local economies by increasing workers’ purchasing power.

It would make labour markets subject to global rules instead of the current free-for-all situation. And it could knock the wind out of rightwing demagogues who blame workers in other countries to peddle their own toxic nationalism. Strengthened solidarity could provide the impetus for workers to push for further gains.

Who would manage something so complicated? Well, the International Labour Organization was voicing willingness to take up the task way back in the 1970s. With academic voices and grassroots campaigns already getting behind it, this is one social justice movement that needs to get centre stage.

New Internationalist issue 524 magazine cover This article is from the March-April 2020 issue of New Internationalist.
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