Global Wage Trends for Apparel Workers

10 July 2013

Declining wages and persistent poverty for garment workers in a majority of the world's leading apparel-exporting countries raises doubt that export-led development strategies create a rising tide that lifts all boats.

  • This report was published by the Center for American Progress during JustJobs Network’s incubation there. Endnotes and citations are available in the PDF version of this report.
  • When images of poor labor conditions in the garment industries of leading apparel-exporting countries reach the global news media, it is often because those conditions seem uniquely and unjustifiably extreme. Malnourished workers working 14-hour days faint by the hundreds in Cambodian garment plants. Hundreds more are killed in deadly factory fires in Bangladesh and Pakistan by owners who lock exit doors when fires start—presumably because they fear that fleeing workers will stop to steal clothes.
  • Yet these images reflect a common basic reality: Garment workers in many of the leading apparel-exporting countries earn little more than subsistence wages for the long hours of labor that they perform. And in many of these countries, as this report discusses, the buying power of these wages is going down, not up.
  • To summarize our findings briefly:
    • We studied 9 of the top 10 countries in terms of apparel exports to the United States as of 2012 and 15 out of the top 21 countries by this same measure. We only studied 15 out of the top 21 countries because we were limited to those places in which we had regular field-research operations at the time of the study. On average, prevailing straight-time wages—pay before tax deductions and excluding extra pay for overtime work—in the export-apparel sectors of these countries provided barely more than a third—36.8 percent—of the income necessary to provide a living wage.
    • Among the top four apparel exporters to the United States, prevailing wages in 2011 for garment workers in China, Vietnam, and Indonesia provided 36 percent, 22 percent, and 29 percent of a living wage, respectively. But in Bangladesh, home to the world’s fastest-growing export-apparel industry, prevailing wages gave workers only 14 percent of a living wage.
    • Wage trends for garment workers in six additional countries among the top 21 countries were also studied in terms of apparel exports to the United States. In four of the six countries—the Dominican Republic, Guatemala, the Philippines, and Thailand—prevailing wages also fell in real terms by a per-country average of 12.4 percent, causing the gap between workers’ wages and a living wage to widen in these countries as well.
    • Garment workers in Mexico, the Dominican Republic, and Cambodia saw the largest erosion in wages. Between 2001 and 2011 wages in these countries fell in real terms by 28.9 percent, 23.74 percent, and 19.2 percent, respectively.
    • In 5 of the top 10 apparel-exporting countries to the United States—Bangladesh, Mexico, Honduras, Cambodia, and El Salvador—wages for garment workers declined in real terms between 2001 and 2011 by an average of 14.6 percent on a per country basis. This means that the gap between prevailing wages and living wages actually grew.
    • Real wages rose during the same period in the four remaining countries among the top 10 exporters that we studied—China, India, Indonesia, and Vietnam—as well as in Peru and Haiti, which were among the top 21 countries. Wage gains in India and Peru, however, were quite modest in real terms at 13 percent and 17.1 percent, respectively, amounting to less than a 2 percent annual gain between 2001 and 2011. Wages rose more substantially in real terms in Haiti (48.2 percent), Indonesia (38.4 percent), and Vietnam (39.7 percent) over the 10-year period. Even if these rates of wage growth were sustained in these three countries, however, it would take on average more than 40 years until workers achieved a living wage. Only in China, where wages rose in real terms by 124 percent over the same period, were workers on track to close the gap between their prevailing wages and a living wage within the current decade. According to our research, Chinese apparel workers are on course to attain a living wage by 2023, but only if the rate of wage growth seen between 2001 and 2011 is sustained.

    The Worker Rights Consortium is an independent nonprofit organization that investigates and reports on working conditions in the global apparel industry.