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Ethiopia’s Garment Workers Labor for Industry’s Lowest Wages, Study Says

Ethiopian garment workers laboring for major global brands like Gap and Levi Stress are among the industry’s lowest earners worldwide, a reality that severely limits their upward mobility as well as their ability to support their families.

In the NYU Stern Center for Business and Human Rights report titled “Made in Ethiopia: Challenges in the Garment Industry’s New Frontier,” researchers make the case for improving the relationship brands and retailers have with workers and factories in the region while examining the flawed sourcing practices that helped exacerbate the situation.

In the report, Stern Center deputy director Paul Barrett reveals the challenges Ethiopian garment workers face—including a shockingly low average wage.

“Ethiopia’s plan to become a major garment-exporting nation rests in large part on the assumption that workers would accept the extremely low base pay of $26 a month, which isn’t enough to live on, even in Ethiopia,” Barrett said in a statement emailed to Sourcing Journal. “Rather than the compliant, cheap workforce promoted in Ethiopia, the foreign-based suppliers have encountered employees who are unhappy with their compensation and living conditions and increasingly willing to protest by stopping work or even quitting.”

NYU found that ethnic tensions between garment workers and their supervisors, coupled with inadequate employee training and a lack of unions, have hamstrung sourcing in the region and created a system that is harmful to the workers who participate in it.

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Most of these employees are young women, presenting additional issues for factories that are unwilling to accommodate the specific needs of their workforce and creating situations in which abuse can be common.

“Given relatively little training (sometimes as short as two weeks), frustration over worker pay, combined with homesickness and other unfavorable aspects of factory life, has led to a sense of alienation and lack of commitment to working productively,” NYU Stern wrote. “Workers, many of whom come from small rural villages, don’t receive sufficient training in the culture of factory life. They often don’t understand why they would be disciplined for lateness, absenteeism, or chatting with workstation neighbors at the expense of completing their sewing tasks.”

The report adds that Ethiopia’s “eagerness to create a ‘Made in Ethiopia’ brand” has overtaken its ability to properly regulate the industry, which lacks even a minimum wage requirement. Additionally, although Ethiopian law protects the right to freedom of association, unions have not been able to grab a foothold in the region.

To demonstrate how this lack of regulation can be harmful to profits, researchers studied the Hawassa Industrial Park, located a few hours south of the Ethiopian capital city of Addis Ababa. An employer of around 25,000 employees, the park had a near-100 percent attrition rate during its first year of operation—representing factories and brands’ lack of preparedness to operate successfully in the region and a sign of things to come.

“This means that, on average, factories were replacing all of their workers every 12 months, driving training costs up and pushing down efficiency rates,” NYU Stern researchers wrote regarding Hawassa. “Viewed through this lens, it actually costs more to make a basic t-shirt in Hawassa than in a Bangladeshi supplier,” one expert told the Center. “Ethiopian labor has turned out to be considerably more costly than the government had initially advertised.”

To better suit its bottom line and the human rights of workers in the region, brands must adjust their sourcing practices, researchers added. One of the easiest ways to do this, they suggest, is to finance more lengthy and comprehensive training periods for both hard and soft skills, thereby reducing attrition and increasing efficiency. Additionally, the study recommends that more native Ethiopians be placed in management positions to reduce issues related to ethnic tension.

Finally, NYU Stern said that building and subsidizing worker dormitories could solve one of the most pressing issues for workers in places like Hawassa: finding decent housing.

“Brands can mitigate these challenges for suppliers and their employees by aligning business practices with realities in Ethiopia,” Dr. Dorothée Baumann-Pauly, research director for NYU Stern, concluded. “Long-term sourcing commitments, investment in onboarding and on-the-job training, and the provision of non-financial benefits like meals, transportation, and housing subsidies can help to increase the currently low efficiency levels and eventually lead to higher wages.”