Ethiopia has the lowest wages for garment industry workers in the world, and the companies they work for are supplying H&M, Hanes and other top globally recognized clothing brands.
That’s according to a new study from the Stern Center for Business and Human Rights at New York University.
Ethiopia has welcomed the economic opportunity, and offers financial incentives and newly built industrial parks to attract manufacturers. Yet tens of thousands of Ethiopians work in facilities such as the Hawassa Industrial Park south of Addis Ababa, and they’re woefully underpaid.
Businesses coming to Ethiopia base their plans on paying workers USD$26 per month, which is the common base wage although Ethiopia has no legal minimum. That compares with $326 in Shenzhen, China, $280 in Jakarta, Indonesia, and $207 in Kenya’s Nairobi or Mombasa.
It’s nowhere near a living wage for rural workers who come for the industrial jobs but can’t afford housing, transportation and food.
The “Made in Ethiopia” report calls on the Ethiopian government to, among other things, establish a minimum wage and address ethnic tensions in the region while protecting Hawassa workers. “Another crisis like the clash between the Sidama and Wolayta last June in Hawassa could result in manufacturers rethinking their commitment to the Ethiopia experiment,” the report said.
It also offers five recommendations for foreign manufacturers, and popular Western brands with customers who increasingly demand more transparency on sustainable practices and worker rights. These recommendations include a commitment to build dormitory housing, and to provide more training and promotional opportunities for local workers.
H&M announced two weeks ago a new transparency initiative so customers have visibility into production country, supplier names, factory names and addresses as well as the number of workers in the factories. The details are available for online shoppers, and customers using an app to scan in-store price tags.
“We are so proud to be the first global fashion retailer of our size and scale to launch this level of product transparency,” said Isak Roth, Head of Sustainability at H&M. “With transparency comes responsibility, making transparency such an important factor to help create a more sustainable fashion industry.”
Image: NYU Stern