Asia remains “the garment factory of the world” but faces many challenges as the industry evolves

BANGKOK, Thailand (ILO News) – Asia remains the garment factory of the world, but the sector faces a range of challenges many of which have been accelerated by the COVID-19 pandemic, according to a new ILO report. ILO.

Employment, Wages and Productivity in the Apparel Sector in Asia: A Review of Recent Trends reviews employment, wages and labor productivity in the Asian garment sector over the period 2010-19. He points out that the industry still accounts for 55% of global textile and clothing exports and employs some 60 million workers.

However, challenges such as rising labor costs, automation of production and processes, ‘reshoring’ and ‘nearby offshoring’, as well as increased pressure for a transition to a more sustainable business model, with improved wages and working conditions, creates an uncertain future for the industry. as well as the workers. The situation has been exacerbated by the impact of COVID-19.

“While in many countries the sector has seen growth in both wages and productivity, the relationship is not always clear and simple, as government policies and external forces can play a significant role in the outcomes for workers and enterprises,” noted David Williams, Director of the ILO’s Decent Work in Asia Garment Supply Chains Programme.

The report highlights how the evolution of the sector is following different trajectories in the region. While economic diversification and modernization has reduced its importance in countries like China, Thailand and the Philippines, it remains the main economic driver in countries like Cambodia and Bangladesh.

For decades, the industry has relied heavily on low labor costs to secure advantages in the global marketplace. Real wages in the sector have increased in most countries, although working conditions remain generally harsh, including long and intense working hours, poor occupational safety and health, and violations of fundamental labor rights .

Despite the high share of wage and salaried employment and the dominance of large enterprises in most countries, a significant proportion of workers in the sector also remain highly vulnerable, due to widespread informality and the temporary nature of their conditions. of work.

Gender pay gaps persist in the Asian garment industry. Female employees are overrepresented among low-wage workers in the sector, and countries with the lowest proportions of female workers also have the highest gender pay gaps in the garment sector.

Although labor productivity in the Asian garment sector has increased over the past decades, it remains low compared to other manufacturing sectors. Few apparel-producing countries have managed to move up the apparel production value chain, with most manufacturers still engaged in low-skilled “cut-make-trim” operations.

The report’s data reveals a positive association between labor productivity growth and wages in the sector, suggesting that investments in labor productivity can play an important role in increasing workers’ compensation.

Ultimately, however, Williams argues that the industry’s future success will depend on mutually reinforcing investments. “Backed by genuine support for social dialogue and collective bargaining and concrete incentives from brands, industry can create a virtuous circle in which higher wages lead to higher productivity, and vice versa,” he said. -he adds.

Michael O. Stutler