Asia Floor Wage - Global Compact...Asia Floor Wage Decent Wage for Decent Life of Asian Garment...

Asia Floor WageAsia Floor Wage

Decent Wage for Decent Life of Asian Garment Workers

Rita Olivia Tambunan –TURC Indonesia

Email: rita@turc.or.id

Garment Industries in Asia• About 60% of global garment are produced by Asian workers.

• Many Asian producer countries are developing countries, heavily

depend on labour intensive industries like garment.

• Their comparative advantages: (cheap) labour supply, raw materials.

• Periphery countries, fragile to ‘capital swing’.

• In effort to attract investment, producer countries are forced to do

‘race to the bottom’ �loosening labour standard, provide cheap

labour to guarantee ‘in-time’ production.

• Impact to workers: heavy working hours (10-18hours), poor wage,

no union allowed (repressive control), women workers are targets.

Garment Company in Indonesia

Global GarmentDivision of LabourPrimary Manufacturing Countries

China

India

Bangladesh

Thailand

Indonesia

Second Layer of Manufacturing CountriesSecond Layer of Manufacturing Countries

Sri Lanka

Cambodia

Vietnam

Philippines

Pakistan

Malaysia

Consumer countries and Asian TNC subcontracting countries

Korea, Hong Kong, Taiwan, Japan

U.S, Canada, Europe

Wage & Purchasing Power German Workers Indonesian Garment Workers

Minimum Wage 5-8Euro/hours 4.3 Euro/day*

(min wage in Jakarta area: Rp

1,08millions or about

94Euro/month)

Cost of basic needs

basket

25-35 Euro/day*

(for family of four)

12-15Euro/day*

(for family of four)

� +/- 40% of German min wage

workers can buy

Other costs

(transport, education,

health, leisure, etc)

?? (some is covered through

existing national social

security system)

About 1-1.5times of the food cost.

(no national social security system,

some workers depend on the

family support).

Asia Floor Wage Proposal

Floor wage = need-based wage for decent living in the

Asian region.

Basic needs = Food cost + Non-food cost.

475$ Purchasing power parity/month, 48working-475$ Purchasing power parity/month, 48working-

hour/week (ILO standard).

Wage for Family: a worker + 2 dependants (a spouse +

2 children).

Better wage = better working condition, anti gender

discrimination, anti-pauperisation, better life.

Asia Floor Wage ProposalCountry Actual Min Wage AFW Proposal of

Living Wage

Disparity

Bangladesh (Taka) 1,663* (18€) 10,754 (116€) -85%

China (Yuan) 687 (78.3€) 1,639 (187€) -59%

India (Rupee) 4,238 (70.2€) 6,968 (115.4€) -40%

Indonesia 972,604 (82.2€) 1,868,650 (158€) -48%Indonesia

(Rupiah)

972,604 (82.2€) 1,868,650 (158€) -48%

Srilanka (Rupee) 5,046 (34.5€) 16,706 (114€) -70%

Thailand (Baht) 4,368 (110€) 7,567 (190.5€) -43%

* In November 2010, as a result of massive protest & strike, Bangladeshi government announced increased min wage of 3,500 Taka. Still needs some monitoring on the implementation.

Source: Asia Floor Wage Alliance, 2008; self-calculation.