The Asia Floor Wage campaign –
Decent income for garment workers in Asia
October 2011
Bettina Musiolek
www.ostwind-institut.de
www.cleanclothes.org
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Dr. Bettina Musiolek
The Asia Floor Wage campaign –
Decent income for garment workers in Asia
Contents:
Introduction
1.Terms
2.Background
3.Who is the Asia Floor Wage alliance (AFW)? What is AFW?
4.How does AFW calculate the Asia Floor Wage?
5.Critical assessment of AFW
Annex: Bibliography
This report documents the talk which was given by the author during the Global Labour University’s
Workshop “Precarious Work. Understanding the Challenges – Finding Union Strategies” May 31 – June 1,
2011 in Berlin under the course of Dr. Michael Fichter Otto-Suhr-Institute for Political Science.
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Dr. Bettina Musiolek
Introduction
In this paper, the Asia Floor Wage is presented as a concept and as a campaign. It
starts with explaining important categories of “wages”, international rights concerning
wages and ways to define them. Findings on the actual wages in the garment industry
follow. Against this background the emergence of the Asia Floor Wage alliance is
described. The paper introduces the actors in this alliance and its strategy to achieve
the Asia Floor Wage as well as the methodology to determine the Asia Floor Wage.
Finally, the importance and relevance of the alliance and campaign is being evalu-
ated.
1. Terms
Before talking about the Asia Floor Wage (AFW) it is important to navigate among the
various wage categories. Basically, three levels of perspective and three corresponding
wage terms are to be differentiated:
Wages can be seen as a
• category of human and basic social rights,
• political demand or result of political negotiations,
• real remuneration for paid labour.
As an actual labour remuneration, wages is the result of individual or collective bargaining
with employers or those who give orders. As a political term, it is subject to political negotiations
usually on the national level in a tripartite body including trade unions, associations
of employers and state institutions. The results of these negotiations are Legal
Minimum Wages. It is important to note that the Legal Minimum Wages are not determined
on the basis of calculations or scientific investigations but by negotiating on the
political scene and therefore they reflects the relation of powers and influence of the
three traditional social partners.
LIVING WAGE as a Human Right
Wages is also an international right: According to the European Social Charta Charter and
the UN Universal Declaration of Human Rights, Article 23(3) + Article 25(1), as declared
in 1948, the right to a LIVING WAGE is a human right.
The Universal Declaration of Human Rights of 1948 states that, “Everyone who works has
the right to just and favourable remuneration ensuring for himself and his family an existence
worthy of human dignity and if necessary supplemented by other means of social
protection” (Article 23, Section 3). To make clear that earning a living does not mean
taking on multiple jobs and long hours, the Universal Declaration says, “Everyone has the
right to rest and leisure, including reasonable limitation of working hours and periodic
holidays with pay.” The same points were expressed in the 1974 International Covenant
on Economic, Social, and Cultural Rights” (Part III, Articles 7 and 11).
The right to a LIVING WAGE belongs to the family of socio-economic human rights. The
UN Declaration of Human Rights also defines the LIVING WAGE. It should cover basic
needs and give workers a discretionary income to satisfy cultural and educational needs.
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Dr. Bettina Musiolek
The LIVING WAGE is a wage that covers basic needs (including: nutritious food, clean
and safe housing, education, clothing), as well as a small amount of discretionary income;
it is based on regular working hours (not including overtime), and supports workers’ de-
pendents.
The right to a LIVING WAGE cannot be found in conventions of the International Labour
Organization. However, the ILO conventions 26 (1928), 99 (1951) und 131 (1970) give
directions for the minimum wages fixing.
The LIVING WAGE as a Human Right is one standard demanded by the Clean Clothes
Campaign’s Code of Labour Practices (1998) and of various other codes declared by labour-related
organisations as well as multistakeholder-organizations. As a Human Right,
this right is also part of the Framework and Guiding Principles developed by the United
Nations Special Representative of the Secretary General on human rights and transnational
corporations and other business enterprises, John Ruggie (2008). In these documents
Ruggie defines protection, respect and remedy of Human Rights as a duty of
states and responsibility of corporations in order to close the gaps that exist "between the
scope and impact of economic forces and actors, and the capacity of societies to manage
their adverse consequences."1
Difficulties to define a LIVING WAGE
When the Clean Clothes Campaign urges retailers and brands to make sure that their
suppliers and subcontractors pay the LIVING WAGE to their workers, retailers and brands
often fall back to the point that nobody knows how much a LIVING WAGE should be in a
certain country or region and that difficulties in calculating a LIVING WAGE makes it difficult
to reach it.
It was only recently that a methodology was developed to cope with this problem: the
Wage Ladder. It was developed by the Joint Initiative on Corporate Accountability and
Workers Rights Jo-In during its pilot project in Turkey.
This picture shows the members of Jo-In.
1
Protect, Respect and Remedy: A Framework for Business and Human Rights, A/HRC/8/5 (April 7, 2008)
p. 3 - http://www.reports-and-materials.org/Ruggie-report-7-Apr-2008.pdf (21 Oct 2011)
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Dr. Bettina Musiolek
Wage ladder is “a benchmarking system used to chart wage levels in a factory relative to
various wage standards in a country or region”, as defined by Henrik Lindholm of the Fair
Wear Foundation (FWF). FWF is the only multistakeholder organization that has implemented
this methodology in its day to day work so far.
The following “ladders” show these benchmarks: the left ladder - various wage and income
categories, the right one more concrete terms for a special Turkish region.2
This methodology allows labour-rights actors not only to define a LIVING WAGE but also
to develop strategies how payment of a LIVING WAGE can be made possible step by
step.
2
MSI = Multistakeholder Initiative; TU = trade union
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Dr. Bettina Musiolek
2. Background
The majority of workers in the global garment industry are women. The wages they are
paid in most garment-producing countries are simply not enough; they are far from a
living wage. Despite working long hours of overtime, women garment workers are taking
home earnings so low that they are often unable to feed even themselves properly, let
alone provide for their families. The reality for most women working in the garment industry
is malnourishment, substandard housing, lack of clean water, and not enough money
to pay for health care and education. Currently, the failure to pay a living wage
means that jobs in the global garment industry do not lift women out of poverty.
As a rule, basic
rights are violated in
the garment
industry; actually,
paid wages are far
from covering basic
needs of workers
and their families. In
the garment
industry tens of
thousands of
suppliers compete
for few orders,
retailers and brands
constantly relocate
their production in
search for better bargains – at the expense of workers, predominantly women workers,
the last ones in the chain. There is a race to the bottom for ever lower wages, lower social
standards.
Within the garment industry women are concentrated in unskilled, low-paid and often
casual or informal work. Their work, even when skilled, is undervalued and few workers
have access to decent working conditions or training. Women garment workers earn often
less than their male colleagues and have the lowest wages among industrial
branches.
Women workers have little voice and influence in their workplaces. They are often denied
the right to join a union or to organise. The unequal power of women garment workers in
relation to men and their employers, both at work and in the community, is at the heart
of the injustices and deprivations they experience.
Women garment workers tend to be in a vulnerable position because they are young,
often migrant, and poorly educated. They lack rights at work, including to pregnancy and
maternity protection. The long hours typical for garment industry work often come into
conflict with women's ability to fulfil the responsibilities they shoulder in their families and
communities.
Women generally assume most responsibility for domestic life (including taking care of
children and the elderly) that means that they are typically under MORE rather than less
pressure to earn a living wage.
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Dr. Bettina Musiolek
Studies3
found that actual wages of garment industry workers are
! sometimes below the absolute poverty line of 1 USD per day,
! normally far below a country‘s relative poverty line (60%
median income),
! between 50% and 10% of a living wage,
! often below the Legal Minimum Wage of the country.
Relation between LIVING WAGE and Legal Minimum Wage
Additionally, it has to be noted that the country’s
Legal Minimum Wage as a rule falls short of
meeting basic needs of the workers. The Legal
Minimum Wage in all garment production
countries of the world does is far below a LIVING
WAGE.
There are three main conclusions to be drawn
from research and investigations:
1. Legal minimum wages in reality set the
ceiling for garment workers, not the
bottom line.
2. Legal minimum wages have for a long
time determined sourcing decisions of buy-
ers.
3. Legal minimum wages often fail to
protect workers and their de-
pendants.
Therefore, it came as no surprise that in 2009-2011 there were labour unrests and wage
struggles in Bangladesh, Cambodia, Laos, China, Myanmar and other countries.
The Clean Clothes Campaign
launched an initiative to
support striking and
struggling workers.
The AFW campaign describes the background for the AFW demand as follows4
:
“The AFW strategy is based on certain objective conditions described below. However, it
is replicable for other industries, in other regions, if these objective conditions apply. In
3
Clean Clothes Campaign/ Merk, Jeroen 2009: Stitching a Decent Wage across Borders: The Asia Floor
Wage Proposal. Amsterdam
4
„Basis for Asia Floor Wage. 2005“
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Dr. Bettina Musiolek
short, this is a trade union strategy in the context of the global supply chain.
Fact 1: Now that the garment industry has completed its re-structuring and has bottomed
out in Asia, it is important to take a strategic look at this region. Out of the many
Asian countries, China, India, Bangladesh, Sri Lanka, Indonesia, and Cambodia can be
said to cover the bulk of the garment production. This workforce constitutes a numerically
strong regional collectivity.
Fact 2: Research on wages of garment workers in these countries show that wage levels
of workers in these countries are more or less comparable. So, the relatively uniform
wages provide a regional bargaining opportunity. A unified regional strategy would also
avoid the danger of jobs moving within these countries because of a wage demand in any
one country.
Fact 3: In the key Asian countries of production, labour laws, definitions of statutory
wages and governmental regulations differ quite widely.
Fact 4: Retail companies, as they become consolidated into fewer big box multinationals,
need larger volumes of products and are increasingly turning to large, stable, and advanced
manufacturers. As a result, multinational buyers are beginning to stabilize their
relations with the Tier 1 companies, resulting in a more stable workplace.
Demand: A regional and differentiated wage formulation demand that would set the high
end for garment industry manufacturing in Asia. The proposed demand is an Asia Floor
Wage for garment workers in conjunction with fair pricing that would make Asia Floor
Wage possible.
The formulation of such a regional wage demand would need to be developed in the context
of the global supply chain, and national conditions of the key Asian countries.”
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Dr. Bettina Musiolek
3. Who is the Asia Floor Wage alliance? What is AFW?
In over a decade of campaigning on workers rights in the garment industry it turned out
that wages is THE cross-cutting and central issue. It is essential for workers and it is at
the centre of companies’ competition and relocation strategies. Competition around
wages and not based on a product’s quality characterizes the garment industry.
Therefore at the beginning of this century labour activists around the globe had been
searching for new strategies towards achieving LIVING WAGES.
As a result of this pledge the AFW alliance was initiated in 2005 by Asian labour activists
from trade unions and NGOs along with research institutions and global campaign organisations
like the Clean Clothes Campaign.
The AFW alliance is led by a Steering Committee with members from India (Hind Mazdoor
Sabha HMS, New Trade Union Initiative NTUI, India National Trade Union Congress
INTUC, All India Trade Union Congress AITUC), Sri Lanka (ex. Dabindu Collective), Indonesia
(SPN, Federation of Independent Trade Unions GSBI, Trade Union Rights Center
TURC), Hong Kong/ China (Globalization Monitor), Malaysia as well as a representative of
the Committee for Asian Women, of the Clean Clothes Campaign, of Action Aid (UK) and
Jobs with Justice (USA).
AFW alliance runs an International Coordinating Office with Anannya Bhattacharjee, Society
for Labour & Development India, and Sub-regional coordinating offices in Asia.
Organizations in most Asian garment production countries support the AFW campaign –
as well as international trade union confederations such as UNI, the Global Union for skills
and services.
What is the AFW campaign?
The alliance strives to work in both
fields:
a) bottom-up organizing and
educating garment workers
and
b) collective bargaining and
political campaigning.
The AFW campaign developed various
grassroots education materials, such
as comics. This poster was designed
to mobilize for the launch of AFW
campaign in 2009.
At the same time the AFW campaign follows a new pattern of collective bargaining: It
does not just focus exclusively on the immediate employer. It takes into consideration
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Dr. Bettina Musiolek
that global supply chains of garments entail an imbalance of power where through their
purchasing power buyers (retailers and brands) on top of the chain influence the whole
chain. Their sourcing decisions determine delivery times and prices and therefore working
conditions of garment workers. Bargaining strategies in the garment industry should
therefore go beyond employers and include buyers (retailers, brands).
Anannya Bhattacharjee, AFW’s international coordinator, justifies the specific AFW bargaining
strategy in this way (during the International Forum of the Clean Clothes Campaign
in Turkey 2010): „In the global garment industry brands and retailers have profited
hugely from outsourcing production to low-wage countries, capitalising on poverty wage
and benefiting from weak enforcement of labour law. They are fully responsible that the
workers who make their products are paid a living wage.”
„Asia Floor Wage is about the capacity to pay of a the global industry. And we think in
fact that the brands have more than enough capacity to deliver Asia Floor Wage. So we
tell brands that AFW is something that we want in the global garment industry because it
is well within their capacity to pay of the global garment industry. It must be paid by the
brands and not our national industry.”
Thus next to the buyers, a bargaining strategy should involve governments. Sustainable
change for workers particularly in the field of gender equality will not be achieved unless
states and governments systematically protect workers’ rights.
In 2008/2009 AFW campaign developed a concrete plan buyers could do towards paying
an AFW: „Road Map to an Asia Floor Wage: 10 steps brands and retailers can take toward
implementing a minimum living wage“.
These are the steps retailers and brands should take:
1. Endorse a living wage standard
2. Promote respect for freedom of association, a precondition for a living wage
3. Enter into dialogue with the AFW Alliance
4. Publicly endorse AFW as a benchmark for a minimum living wage
5. Amend purchasing practices to make AFW a reality
6. Conduct “AFW-pilot projects” involving suppliers and AFW partners
7. Write to sourcing countries’ governments to advocate for the AFW
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Dr. Bettina Musiolek
8. Act in a transparent way
9. Do not work in isolation
10. Present a road map with a concrete timeline for the achievement of the AFW
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Dr. Bettina Musiolek
4. How is the AFW calculated?
The calculation is based on the following well established assumptions:
1. wage = food + non-food costs
2. food costs are calculated for 3000 cals/adult/day
3. non-food = food
4. average household size: 2 adults + 2 children
5. working week of 48 hours
6. comparability: international currency PPP$
With these assumptions AFW accounts for
475 PPP$ / month in 2009/10 and
540 PPP$ / month in 2011/12.
In terms of local currencies the figures are given in the chart below.
COUNTRY
475 PPP$
2009/10
540 PPP$
2011/12
CHINA 1639 1843 RMB
INDIA 6968 7967 Rupees
BANGLADESH 10754 12248 Takas
INDONESIA 1.868.650 2.132.202 Rupiah
SRI LANKA 16706 19077 SLR
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Dr. Bettina Musiolek
5. Critical assessment of AFW campaign
AFW responds to the challenges for the labour movement – both unions and labour rights
NGOs – arising from the knitting pattern of the global garment industry: global supply
chains and prevalence of informal and precarious work. In this context traditional social
partners and conventional labour strategies fail to protect workers’ rights.
Assessment of the AFW campaign shows these strengths:
! Scientific foundation: AFW is based on in-depth research into working and living
conditions of garment workers in Asia, predominantly women.
! Regional minimum living wage formula: AFW is based on a scientifically researched
and developed formula for a regional minimum LIVING WAGE.
! Cross-border approach: Considering the constant relocation threat only an international
strategy can cope.
! Clear gender focus: High gender sensitivity pervades both AFW’s activities: It
takes gender perspectives into account in all its work and addresses issues influenced
by gender; it includes gender considerations in all its activities, particularly
policy, education, bargaining and campaign work, and highlights gender discrimination
experienced by women workers; it monitors living and working conditions
of women workers as well as supply chain practices, and raises awareness of their
impact on women working in the garment industry.
! Integrated strategy: The AFW campaign integrates organizing, worker education,
political campaigning and bargaining activities.
Thus the Asia Floor Wage campaign and concept can be seen as a new political demand
by new labour-rights actors and as a concrete definition of a minimum LIVING WAGE for
Asian countries. At the same time the AFW undertakes education of workers on global
contexts of their work and pursues new complex bargaining strategies.
The success of the AFW coalition will depend – as Anannya Bhattacharjee explains – on
“our ability to achieve that depends on our powers to organise ourselves and to bargain
globally and collectively”. That means the success will also depend on the extent to which
the traditional labour actors will support AFW and be open for its policies.
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Dr. Bettina Musiolek
Annex: Bibliography
Selected sources:
Ascoly, Nina 2004: The Global Garment Industry and the Informal Economy: Critical Issues for
Labor Rights Advocates. IRENE/CCC Discussion Paper, Amsterdam/ Meißen
Barendt, Regina/ Musiolek, Bettina 2007: Die Stimmen der Arbeiterinnen. Zur Situation von
Frauen in der Bekleidungsindustrie Osteuropas und der Türkei, Clean Clothes Campaign und
Evangelische Akademie Meißen. Meißen/ Amsterdam
Bhattacharjee, Anannya/ Gupta, Sarita/ Luce Stephanie 2009: Raising the Floor. The Movement
for a Living Wage in Asia, in: New Labour Forum 18(3): 72-81, Fall 2009
Clean Clothes Campaign 2009 a: Cashing In: Giant retailers, purchasing practices, and working
conditions in the garment industry", Amsterdam.
Clean Clothes Campaign 2009 b: False Promises. Migrant Workers in the Global Garment Industry
CCC Discussion Paper; http://www.cleanclothes.org/resources/ccc/working-
conditions/false-promises
Clean Clothes Campaign 2009 c: Gender Policy Statement, Amsterdam.
Clean Clothes Campaign/ Merk, Jeroen 2009: Würdige Löhne über Grenzen hinweg: Der ‚Asiatische
Grundlohn’. Gekürzte deutsche Fassung von „Stitching a Decent Wage across Borders:
The Asia Floor Wage Proposal“. Berlin
Clean Clothes Campaign/ INKOTA 2008: Hürden überwinden: Schritte zur Verbesserung von
Löhnen und Arbeitsbedingungen in der globalen Sportbekleidungsindustrie, Amsterdam / Berlin.
(Englisch: www.clearingthehurdles.org)
Clean Clothes Campaign/ Ascoly, Nina/ Finney, Chantal 2005: Made by Women: Gender, the
Global Garment Industry and the Movement for Women Workers' Rights, Amsterdam.
Clean Clothes Campaign 2005: Looking for a Quick Fix: How Weak Social Auditing is Keeping
workers in Sweatshops. Amsterdam.
Clean Clothes Campaign 2002: Made in Southern Africa, Amsterdam
Clean Clothes Campaign 1998: Made in Eastern Europe, Amsterdam
International Labour Office 2010: Global Wage Report
Musiolek, Bettina 2010: Geschlechtergerechtigkeit und freiwillige Instrumente der Unternehmensverantwortung
in globalen Produktionsnetzwerken und Lieferketten. INEF Forschungsreihe
Menschenrechte, Unternehmensverantwortung und Nachhaltige Entwicklung
07/2010. Duisburg: Institut für Entwicklung und Frieden, Universität Duisburg-Essen.