The Asia Floor Wage campaign and the garment industry in Bangladesh

04-08-2010
Since the end of 2009, an international campaign named the Asian Floor Wage (AFW) has been launched by a large number of NGOs and trade unions in Asia, Europe and the US and aims at a minimum “living wage” for garment workers in Asia. The AFW campaign raises the important and complex issue of wages that is addressed by the BSCI Code of Conduct. The BSCI Code stipulates that supplier companies shall pay the minimum “legal wage”, which in many developing countries is already a challenge! However, in the framework of BSCI’s development approach, the BSCI also encourages supplier companies to provide their employees with a living wage. In this connection, BSCI provides a position paper elaborating this approach in more detail. We believe that the AFW follows a laudable aim and the proposed calculation of a "living wage" is a good starting point for discussions but it fails to explain how to implement it in practice and how to tackle a couple of key challenges. - The implementation of a floor wage as proposed by AFW would be a major problem for keeping companies’ competitiveness – either for the factory, or the retailers, or even countries compared with others. This is notably true for Bangladesh, which is competing for orders with China, Vietnam and India and where the garment industry stands for 75% of the country’s export, employing 2,5 million workers in more than 5000 factories. If factories would pay a living wage, products would become more costly. How can it be ensured that the factory, the sector or even the supplier country as a whole doesn’t lose its competitiveness? The AFW doesn’t provide an answer to this important point. - If buyers would pay more for the products, how would it be ensured that the workers really get a higher pay? The AFW does not provide input on this question, and the point is not raised. - The calculation of prices of products is highly complex and varies depending on individual parameters of supply chains. This means that reality is not as simple that if buyers paid a certain amount more for a product, this would ensure a living wage for workers. In this context, the topic of living wages should not be a campaigning issue against companies but should rather be addressed at the company level through a strong CSR-program such as the BSCI and at the political level by raising it with EU institutions, the UN and ILO, G20, ASEAN and national governments.

Add new comment