Ethiopian garment workers are paid the lowest industry wages in the world while manufacturing clothes for well known brands, according to a study published recently by New York University’s Stern Center for Business and Human Rights.
The East- African nation is rising rapidly as a low-cost destination for clothing manufacturers, thanks largely to the Hawassa Industrial Park- the focus of the Stern Center’s report. Built by a Chinese company for US$250 million and opened in 2017, the park employees 25,000 workers and is located 225km south of the capital of Addis Ababa. It manufactures clothing for labels that include Calvin Klein, JC Penney, H&M, Levi’s and Tommy Hilfiger.
The US$26 wage is nearly a quarter of the average monthly wage of a Bangladesh garment industry worker (US$95), the worlds second largest apparel producer, and at less than a 12th of the reported monthly wage of a Chinese worker, the worlds largest exporter. The annual average wage of the garment workers comes to US$312, roughly 40% of the per capita average income in Ethiopia.
Ethiopia has no legal minimum wage, with US$26 being the customary base wage in the garment industry, based on the wage of entry level Ethiopian public employees- these low wages contributing to producers bringing manufacturing to the country.
Wages are supplemented by incentive payments. However, even with these purported incentive payments included the average daily wage sits at an estimated US$1.33 a day, still below the World Bank’s daily International Poverty Line of US$1.90.
The study highlighted the difficulties caused by the low wages. Housing prices near the Industrial Park have risen from nearly US$14-17 to as much as US$52, and the report states that ‘It’s common for young women employees to live four-to-a-room’ and that the wage ‘does not cover the workers’ basic needs.’
The study talks of shared concrete rooms, open-air latrines, a lack of food and theft in the accommodation. In the workplace, there are reports of employees being too tired from walking three hours a day to come to work and to go back home, workers not being able to afford to eat two meals per day and fainting as a result.
These factors, combined with societal customs of a workforce from a predominantly agricultural background, is reflected in the efficiency of the factories. Efficiency varies at the Industrial Park between manufacturer, ranging from 15% to 75%, but the study states that ‘low efficiency is a widespread and acute’ problem.
During its first year of operation, overall attrition hovered around 100%, meaning that on average factories were replacing all of their workers every 12 months.
One worker said “I thought the salary would be much higher. I was not told the truth.”