Minimum Wages in apparel manufacturing countries

Minimum Wages in Apparel Manufacturing Countries Statistical Report

Minimum wages have remained stable since the start of the year, but they are already expected to be raised in Vietnam and Cambodia, as of January 1st next year. Workers of most low-cost countries do not actually receive a minimum wage, according to a recent study by the I.L.O. whereas buyers could now check the effective level of living wages. Our report displays minimum wages in a large number of apparel manufacturing countries, with latest data updated as of October 1st in US$ terms, compared with January 2015 and January 2014. Minimum wages in local currency units are also released for most countries.

Minimum wages have remained relatively stable since the start of the year, but they could be raised in a few apparel producing countries, as of January 1st.

Vietnam has already announced a rise of 7.3% of its minimum wages with levels depending on areas.

The lowest level will be raised from 2.4 to 2.6 million dong ($107 to $116) whereas the highest level will be increased from 3.5 to 3.75 million dong ($156 up to $166).

This should not have a decisive impact over price exports in Vietnam, as most workers already get higher wages.

According to a recent study by the I.L.O. (International Labour Organization), a very large share of the workforce is paid above the minimum wage (MW) in Vietnam.

Higher MW in Cambodia

The MW will also be raised in Cambodia, as of January 1st 2017.

Negotiations have already being held for the past three months between employers offering a rise from $140 to $147 per month and trade unions requesting a rise to $171.

Final decision by the Labor Advisory Committee could be a rise of 10% at about $150 or below $160.

The minimum wage has been considerably raised in the last years in Cambodia, from 61$ in September 2012 up to $140 on January 1st, 2016.

Paid below MW level

About a quarter of employees would not receive the WM, according to the I.L.O., even after taking account of overtime worked.

This is still a lower share than in the Philippines and India where more than 50% of workers in the apparel industry would be paid below the minimum wage.

The lack of compliance falls to 39% in Indonesia, 37% in Thailand, and 37% in Pakistan.

Female workers in Pakistan

The share of non compliance rises for female workers, reaching a peak in Pakistan where 87% of them would be paid below the MW.

In Bangladesh, the minimum wage has not been raised since November 2013, when it had jumped, after a series of demonstrations.

Trade unions have recently requested to increase the MW from 5,300 to 8,114 takas ($69 to $105) per month.

The apparel industry is still busy with complying with new security standards, however.

Living wages

In Bangladesh and elsewhere, trade unions and ONGs will increasingly argue about the level of so-called "living wages", taking into account the basic needs of any worker.

Studies are now emerging for trying to calculate the living wages in low-cost countries, which is a very difficult task.

In line with H&M's new approach and communication, other apparel chains could be tempted checking the level in living wages at clothing plants.

I.L.O.: Weak minimum wage compliance in Asia’s garment industry

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