Dis­par­ity in wages

Perfect Sourcing - - Cover Story -

It has been ob­served that the min­i­mum wage has been in­creas­ing all over the world mainly due to eco­nom­i­cal and hu­man­i­tar­ian causes. The tex­tile and ap­parel sec­tor is a labour in­ten­sive in­dus­try, and the is­sue of wages rises off and on. In­dia was the re­gional leader for 2018 pay rises with a 10 per­cent in­crease, while Sri Lanka was at 8.6 per­cent and In­done­sia at 8.5 per­cent. The min­i­mum wage for tex­tile work­ers in Cam­bo­dia in­creased to $140 from 1 Jan­uary 2016, mainly pushed by labour unions to im­prove work­ers low liv­ing stan­dards, while In­dia in­creased its tex­tile min­i­mum wages in 2016 to stay in align­ment with the na­tion’s in­fla­tion rate and con­sumer price in­dex.

Data from the China Cham­ber of Com­merce for Im­porter and Ex­porter of Tex­tiles and Ap­parel (CCCT) also shows that the in­creas­ing min­i­mum wage for tex­tile work­ers in China is cur­rently al­most twice as high as the min­i­mum wage in Philip­pine or In­done­sia, trig­ger­ing con­cerns that China may lose its po­si­tion as the tex­tile and ap­parel in­dus­try leader in the world.

Even in Bangladesh, min­i­mum wages have in­creased mod­estly from US$ 65 a month to US$ 70 a month, af­ter re­tail­ers and buy­ers had to face in­ter­na­tional pres­sure fol­low­ing the death of over eleven hun­dred work­ers in the Rana Plaza fac­tory fire.

Cam­bo­dia is ex­pected to hike min­i­mum monthly wages by at least 11 per­cent, reach­ing US$170 from 153. Even Myan­mar of­fi­cials have an­nounced that the daily min­i­mum wage would rise be­tween 4,000 and 4,800 kyat ($2.92$3.51) based on re­gions, which would mean a 10-30 per­cent in­crease from the pre­vi­ous wage of 3,600 kyat ($2.63), de­pend­ing on ar­eas where work­ers live.

Sim­i­lar to Myan­mar, in Viet­nam too, the in­creases varies ac­cord­ing to four ma­jor ar­eas, with 6.13 per­cent as the min­i­mum fig­ure, valid for ma­jor cities like Hanoi and Ho Chi Minh City, and 6.97 per­cent the max­i­mum. An av­er­age in­crease of 6.5 per­cent in the min­i­mum monthly wage was rolled out across Viet­nam as of Jan­uary 1, 2018. With wage bands tiered across the coun­try, this will see em­ploy­ees’ monthly pay af­fected on a slid­ing scale.

While some re­port sug­gest that wages have in­creased, ac­cord­ing to the ILO’S Global Wage Re­port 2016/17, wage growth around the world has de­cel­er­ated since 2012, fall­ing from 2.5 per­cent 1.7 per­cent in 2015, its low­est level in four years. If China- where wage growth was faster than else­where- is not in­cluded, growth in global wages drops from 1.6 per­cent to 0.9 per­cent.

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