Posts Tagged ‘minimum wage’

Asia Floor Wage revises Living Wage benchmark

Posted: May 4, 2011 in Cambodia, China, Economic Development, India, Indonesia
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Three female workers in Sri Lanka apparel industry

Image via Wikipedia

There are two benchmark figures in the area of low-income and poverty wages:

- The Minimum Wage (where it exists) is the legally-enforceable minimum rate of pay, set either by legislation or by some administrative process. If it is not observed, it is fairly straightforward to take legal action against the offending employer.

- The Living Wage, on the other hand, is the minimum wage necessary for a person to make ends meet. Ideally this is less than the minimum wage but alas it has long been the case that in many States of the USA the Minimum Wage pays less than a Living Wage. The exact level of the Living Wage constantly changes as costs of living increase.

If an employer fails to pay the living wage there is no easy way to get them to do so!

Enter Asia Floor Wage.

AFW is a coalition of unions and other activists who pursue fair wages for garment workers in Asia (they refer to the Living Wage as a ‘Floor Wage’). This week they published revised minimum monthly rates for the six major garment manufacturing countries:

  • Bangladesh 12248 BDT
  • Cambodia 692903 Riel
  • India 7967 Rupees
  • Indonesia 2132202 Rupiah
  • Srilanka 19077 Rupees
  • China 1842 RMB

These rates are equal to 540 USD at purchasing-power parity.

According to AFW, the ‘gap’ between the Living Wage and the Minimum Wage in these countries is, on average, 1 to 2. Guangdong, China’s manufacturing province, comes close but still falls short.

AFW have also assembled a helpful guide for retailers and sourcing companies who want to take CSR seriously, explaining how they can meaningfully commit to fair wages in garment production.

China Experiences Growing Pains – Part 2

Posted: February 21, 2011 in China, Economic Development, India
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A couple of weeks ago I wrote this post about increased labour unrest in China caused by a reduction in exports. It seems there is more to this story.
At least two commentators, The Economist and China Briefing, believe that China’s Central Government is intentionally allowing this unrest to go unchecked.
Two reasons are suggested. The first is that any anger directed at the foreign multinationals who source goods from China is anger not directed at the Government. This is a speculative claim. The second is more clearly supported by the facts: that China wants the workers to succeed in raising their living standards, even if it means we see less of those low-cost factories churning out goods stamped “Made in China”.
China’s Government naturally wants the country to become more prosperous generally and in the next phase it wants its vast manufacturing sector to increasingly sell goods for the country’s internal market. For that to be possible, average wages have to increase so that Chinese citizens can afford to buy more goods. So if the workers succeed in their claims for higher wages, more power to them.
And succeed they have. Migrant workers wages increased 17% in 2009. In the province of Guangdong the minimum wage was increased 20-21% in 2010 and will increase a further 18.6% in a week’s time, on 1 March. That is a 66% wage increase in just three years. In a few years, Malaysia will be the only developing nation in Southeast Asia with higher wages.
As it stands, China’s minimum wage is already twice as high as India’s and 50% more than Indonesia’s. A survey of buyers of China products who expect to start sourcing elsewhere found that 57% expect to increase sourcing from India.
Meanwhile in Guangdong and elsewhere wages are only half of the story. Conditions of work continue to be highly demanding, with long hours and draconian restrictions on freedom and until those improve we will see more protests.

China's manufacturing hub, soon to be officially one megacity. Image:The Telegraph

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