Bolstering labor productivity in Asia’s garment sector could improve wages, a new International Labour Organization report says, although many issues can influence variables and so inferences regarding this relationship “must be nuanced.”
What’s clear, however, is that the so-called “garment factory of the world” is struggling with challenges made more acute by the Covid-19 pandemic, the United Nations agency noted on Friday.
Even before the health crisis sparked widespread supply-chain bottlenecks, however, Asia’s share in global textiles and clothing exports shrank from a high of 58 percent in 2015 to 55 percent in 2019.
The region’s initial dominance was largely underpinned by the success of China, which propelled widespread growth in the sector until it veered away from labor-intensive production toward medium and higher technology-based manufacturing.
The superpower’s waning portion was then “partly offset” by an increase in the rise of other Asian clothing exporters, specifically Bangladesh, Cambodia, Myanmar and Vietnam. But even with this softening, China still commanded 34 percent of global textile and clothing exports in 2019, followed by Vietnam (5 percent) and Bangladesh and India (4.3 percent each).
Other contributors to this trend include an increase in production and process automation, reshoring and nearshoring, as well as mounting pressures to transition toward a more sustainable business model with better wages and working conditions, the ILO said. As a result, manufacturers and workers alike are facing high levels of uncertainty about their future.
The status quo isn’t helping matters either. While real wages in the sector have increased in most Asian countries, working conditions, for the most part, remain 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 garment manufacturers, particularly small and medium-sized enterprises in the lower tiers of the supply chains, also grapple with significant pressure to reduce their lead times and shave off margins. To pander to buyer-led global supply chains that often promote the fast-fashion business model, many of them resort to “flexible” work arrangements that result in a downward squeeze on vulnerable temporary and home-based workers.
Few garment-producing countries have successfully graduated up the apparel production value chain, with most manufacturers remaining entrenched in low-skilled cut-make-trim work. Meanwhile, gender pay gaps persist in the region, with female employees overrepresented among the sector’s low-pay workers. Women also experience endemic 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 the sector’s expansion can no longer be “sustained along the same lines in the future,” the ILO said. Instead, “new drivers of competitiveness” that require improved wages and working conditions will be needed.
Though labor productivity in Asia’s garment sector has risen in recent decades, it remains low in relation to other manufacturing industries, the report said.
“Mutually reinforcing” investments, backed by “genuine support” for social dialogue and collective bargaining and concrete incentives from brands, can create a “virtuous cycle” where higher wages fuel higher productivity and vice versa, the ILO added.