Can Asia remain “the clothing factory of the world”? The ILO weighs in – Sourcing Journal

According to a new report from the International Labor Organization, boosting labor productivity in Asia’s apparel industry could improve wages, although many issues may influence the variables and conclusions regarding this relationship” must be nuanced”.

What is clear, however, is that the so-called “garment factory of the world” is grappling with challenges made more acute by the Covid-19 pandemic, the UN agency noted on Friday.

Even before the health crisis caused widespread bottlenecks in the supply chain, Asia’s share of global textile and apparel exports fell from a high of 58% in 2015 to 55% in 2019.

The region’s initial dominance was largely underpinned by the success of China, which propelled widespread growth in the sector until it moved away from labor-intensive production towards a manufacture based on medium and superior technology.

The waning share of the superpower was then “partly offset” by an increase in the rise of other Asian garment exporters, including Bangladesh, Cambodia, Myanmar and Vietnam. But even with this slowdown, China still controlled 34% of global textiles and clothing exports in 2019, followed by Vietnam (5%) and Bangladesh and India (4.3% each).

Other contributors to this trend include an increase in production and process automation, relocation and offshoring, as well as growing pressures to transition to a more sustainable business model with better wages and working conditions, said the ILO. As a result, manufacturers and workers face high levels of uncertainty about their future.

The status quo does not help matters either. While real wages in the sector have increased in most Asian countries, working conditions remain mostly poor, with long and intense working hours, poor occupational safety and health, and violations of fundamental rights. at work more the norm than the exception.

Many apparel manufacturers, especially small and medium-sized companies at lower levels of supply chains, also face significant pressure to cut lead times and squeeze margins. To pander to the buyer-driven global supply chains that often promote the fast fashion business model, many are resorting to “flexible” working arrangements that lead to downward pressure on temporary workers. and vulnerable homes.

Few apparel-producing countries have managed to move up the apparel production value chain, with most manufacturers remaining entrenched in low-skilled cut-make-cut jobs. Meanwhile, gender pay gaps persist in the region, with female employees overrepresented among low-wage workers in the sector. Women are also victims of rampant gender-based violence and harassment in the workplace.

Sourcing in Asia was initially driven by low labor costs, but it has become “increasingly clear” that expansion of the sector can no longer be “sustained in the same direction in the future “, said the ILO. Instead, “new drivers of competitiveness” requiring improved wages and working conditions will be needed.

Although labor productivity in the garment sector in Asia has increased over the past decades, it remains low compared to other manufacturing industries, according to the report.

“Mutually reinforcing” investments, backed by “genuine support” for social dialogue and collective bargaining and concrete incentives from brands, can create a “virtuous circle” where higher wages fuel higher productivity and vice versa, added the ILO.

Michael O. Stutler