Minimum Wage Level for Garment Workers in the World (Updated in December 2020)

The latest data collected from industry sources show that the monthly minimum wages for garment workers vary significantly in the world, ranging from as low as USD $26 in Ethiopia to USD $1,764 in Belgium in 2019. The world average stood at USD $470/month that year.

These figures echo the findings of a 2017 study by Public Radio International, which also shows a significant variation of the minimum wage level among garment workers worldwide. Meanwhile, there was no clear evidence that the minimum wage level in 2019 was notably higher than in 2017 in many countries we examined.

On the other hand, we need to interpret the minimum wage level in the context of the local living wage. According to the International Labor Organization (ILO), a living wage is defined as the theoretical income level that an individual must earn to pay for basic essentials such as shelter, food, and water in the country where a person resides. As shown in the figure above, a high minimum wage in absolute terms does not always guarantee a high standard of living and vice versa. For example, while the United States offers one of the world’s highest minimum wages for garment workers (USD $1,160/month),  that minimum wage level was only about 70% of the living wage (USD $1,660/month) 2018-2019. In comparison, garment workers in Indonesia earned a much lower nominal minimum wage of USD $181/month. That wage level, however, was much higher than the reported USD $103/month living wage over the same period.

Additionally, the results suggest that fashion companies’ sourcing decision today is far more than just about “chasing the lowest wage or price.” For example, while China and Vietnam are the two largest apparel suppliers for the U.S. market, the minimum wage level for garment workers in the two countries have exceeded most of their competitors in Asia.

By Emma Davis (Research Assistant, Fashion and Apparel Studies, University of Delaware) and Dr. Sheng Lu

Author: Sheng Lu

Professor @ University of Delaware

18 thoughts on “Minimum Wage Level for Garment Workers in the World (Updated in December 2020)”

  1. The findings in this article were rather interesting, but not surprising to me. As learned in class, one of the greatest benefits of globalization is that countries can exchange based on their own comparative advantage. In many cases, the United States has the capital intensity to provide textiles for less capital, and, consequentially, less expensive labor. Overall, the US has a large array of trade partners globally. And, countries such as Bangladesh provide the benefit of inexpensive labor through its low minimum wage. As for other, more costly countries, a huge factor considered in trade is free trade agreements. While perhaps the wage is higher, the promise of reliable exchange and no tariffs through agreements like CAFTA, make up for it. Similarly, other perks seem to outweigh the costs in these Asian countries. In addition to China and Vietnam, Cambodia is another large hub of garment production. All three of these Asian countries, as evidenced by the 2019 data, have relatively higher minimum wages. In class, I recall the conference hosted by Dr. Lu in which many companies revealed many other benefits they seek in trade partners. One of the top ones is speed to market –something that China seemed to excel in. Additionally, qualities like flexibility and resilience were especially desirable to all companies recovering from the downfalls of COVID-19. It seems that, as the article suggests, the inner workings of international trade go beyond simple transactional value. And, the threat of the global pandemic will only increase retailer’s selectivity.

  2. Something that really surprised me in this article was the comparison of living conditions in different countries. I thought it MUST be better for a garment worker in the U.S. because they will be getting paid higher. But if their living expenses exceed that, then they are not getting a better deal by working here versus working in Indonesia. Overall, workers need to have a higher minimum wage but especially in countries where the cost of living is higher. Where companies decide to source can affect this and ultimately help garment workers.

    1. Before posting this article, I also tried this database: living wage vs. minimum wage in the US (by state) https://livingwage.mit.edu/

      It does seem in many cases, the minimum wage is below the local living wage. This raises two questions: 1) do we really need to bring back apparel manufacturing jobs if they have been so poorly paid? 2) Why or why not the government should step in and regulate “minimum wage” or we should let the market decide.

  3. I found this post to be very interesting and surprising! Throughout many of my courses at the University of Delaware, we have discussed the minimum wages and average income in various countries around the world that have a large focus on employment in the garment industry. However, I always assumed that the higher the wage the better off a garment worker would be. But that is not always the case which I now realize is often overlooked. My first thought when I saw the monthly minimum wages for garment workers in the 2019 chart, I assumed garment workers in the US must be doing fine financially but I did not consider the actual “living wage”. When I divided the US monthly minimum wage by 4 weeks and then by 40 hours per week my result was that the average hourly wage is only $7.25 per hour and then taxes must be deducted. As a young adult who works to pay my rent and bills, I can very easily say $7.25 per hour is not enough to live comfortably as an individual let alone as a parent or guardian supporting a household (not even considering taxes). In contrast, some of the countries at the lower end of the chart make much less but things such as food or housing also cost much less. I think there is definitely a problem with the minimum wage in many countries because so many people cannot support themselves or others with one job! I believe no one should be paid less than a living wage and I’m quite shocked this issue isn’t talked about or addressed more.

  4. We talk a lot in the industry about garment workers’ minimum wages, and what we can do to improve their wages, and a lot of it is because most of the time, what they are paid doesn’t equate to living costs. In classes, the focus has been on third-world countries that retailers go to get orders filled for lower costs, like Vietnam and Bangladesh. However, it is interesting to look at this article to see all the countries side-by-side to see their minimum wages. It is even more interesting that even the top countries that pay the most, the workers can’t live comfortably on it. I already think that is troubling because, in the United States, the federal minimum wage is not livable if compared to living wages, and it is comforting and troubling to see that countries also have this issue.

  5. Distinguishing the difference between living wage and minimum wage is very enlightening as I do not often consider the difference. As Kayla mentioned, I also tend to forget that just because the U.S. monthly minimum is higher than Bangladesh, it doesn’t necessarily mean I am better or worse off. I also agree with the first comment, that comparative advantage has allowed us to pick and choose which countries to source from based on their benefits, such as pricing, quality labor, compliance, and speed to market. As the US specializes in textile production, they outsource from countries that are better off producing apparel. If we are sourcing from countries that can produce apparel more efficiently than us, why are we not paying them enough (collectively) to make up for their living wages?

  6. This article inspired me to think of the following. First, globalization has brought a large number of workers from low-development countries into the labor market, which has led to a significant reduction in jobs and lower wages in high- and middle-income countries; second, non-labor costs in the apparel industry have fallen dramatically, leading to a reduction in the added value of apparel labor; third, supply is far greater than demand in the apparel industry, leading to excessive costs being spent on inventory, marketing channels, and other areas, with corresponding labor costs being cut.

  7. I found this article very intriguing. It is interesting to me that although the wage in the United States is very high compared to other country, that doesn’t necessarily mean there is a higher standard of living in the U.S. In Indonesia, the amount of money workers make goes a much longer way than in the United States. It will be interesting to see if the rates have changed due to the Coronavirus pandemic. It also surprised me that the minimum wage monthly was not the highest in the United States, and instead was the highest in Belgium.

  8. This article suprised me a lot because I always thought the situation was bad but not this bad. It is crazy to me that people in Ethiopia have such a low minimum wage. These people that work in the garment industry make little to no money and then to realize in the second graph that they can barely live off the money they make is horrible. This defintely made me think about what I can do to make a difference.

  9. I find it very interesting that “minimum wage” and “living wage” are two different terms. I find it troublingly ironic that they are not one in the same. It is no secret that wages within the garment industry as shockingly low, and hopefully as worker compensation laws get more traction globally, this issue can begin to be resolved. For the work these people, (mostly women and children), are doing, and the hours they are clocking in, their pay should be far higher than it is. It was very interesting to read that from 2017 to 2019, minimum wage was not even noticeably higher. This should not be true since the cost of living has been, and will be steadily rising annually. The US needs to start taking responsibility for the places in which we source our materials. We cannot turn a blind eye any longer for the sake of a cheaper deal, at the expense of human beings. As we continue to have apparel/trade relations with countries such as Vietnam that barely pay their workers, we are essentially enourcing the exploitation and abuse.

  10. It is quite interesting how minimum wage levels for garment workers vary from country to country. It is also shocking to come to the realization how low minimum wage really may be. On the low end of this spectrum, the minimum wage for Ethiopia may be as low as 26 Dollars. The minimum wage is generally in align with what is called a living wage which is the amount that would be spent on the essentials in everyday life and based on this number the minimum wage will be affected. Another major concern of mine is that throughout the pandemic how have those making minimum wage been able to survive as many jobs within the garment industry have been let go or stopped for the time being until there is more certainty as to what is to be expected in terms of the Corona Virus pandemic.

  11. I found this article to be very interesting! It is a harsh reality to stomach when it comes to understanding that many garment industry workers do not make enough money to be above the living wage. It comes as a shock to me that a country like the US and Portugal are both not paying their workers enough money to be able to live. Other countries such as Honduras and Indonesia came as a shock to me as well when it comes to paying their workers enough to be able to afford a living. Something interesting to keep in mind as well is that many of these workers may also have families that they need to care for and therefore require a higher income. I think that an important aspect of social responsibility that needs to have a greater focus upon is that garment workers are often very underpaid for their work.

    1. Good thought! We will explore the relationship between trade and wage & jobs later in the course. Several things are of heated debate: 1) how has trade affected jobs & wage levels in a country overall? 2) whether trade creates winners and losers? If so, who are they (for example, export-oriented sectors vs. import-competing sectors)? 3) what role the government should/can play in regulating jobs & wage levels related to international trade? For example, why or why not is it a good idea to set a minimum wage for imported products. Meanwhile, you may find this article relevant and insightful: https://www.cfr.org/blog/what-trade-and-minimum-wage-debates-have-common

  12. I found this article really interesting especially the comparison between the minimum wage and the living wage by country. I know that the U.S. has always had a lower minimum wage than a lot of other highly developed countries but it really puts it in perspective when compared to the U.S. living wage. It’s intriguing to see in the graph “Minimum Wage of Garment Workers as a Percentage of Local Living Wage” how less developed countries like Pakistan, India, and Vietnam have a higher percentage than us and China included. It really goes to show the benefits of globalization in other countries and outsourcing production to these less developed countries because it allows the garment workers in the country to be able to have enough money to live relatively comfortably.

  13. In one of my first ever fashion courses taken at University of Delaware, we looked into product development and most of the factors that contributed to creating a garment. We briefly discussed sourcing, and some of the advantages and disadvantages of outsourcing to other countries. One of the greatest advantages noted was the cheap cost of labor overseas. The production of apparel in the US is limited and due to larger restrictions and more regulations, garment workers in the US ultimately demand more pay in this aspect. This drove fashion brands to move production elsewhere to cut the costs that come with manufacturing. In a later course discussing sustainability and social responsibility of fashion companies, we dove deeper into the poor and unethical treatment of many garment workers. This took a more involved look into garment worker wages and worked through the issues that we still see in the production industry related to wages. Many countries and factories can argue that they pay their workers “minimum wage”, but minimum wage is vastly different from a “living wage”. After reading this article, I was shocked to learn about the discrepancies between the minimum wage paid to many workers and the average living wage in that country of production. It was my inaccurate assumption that these workers in the US, the few, would most likely be in a better condition than those in less developed countries, however I could not be more wrong. These are the misconceptions that need to be brought to light and discussed more!

  14. I find it very interesting to look into the wages of workers in countries that are major apparel exporters. While it is common to think that apparel manufactured in less developed countries automatically means extremely poor pay, it may look that way initially. As Americans, we’re used to a certain way of living that requires a decently high living wage, so when we see salary rates of $181/month, we can’t imagine how one could live even a week with that kind of earning. It is also important to note the kind of requirements it takes to become a garment worker in these countries. In the US where high-paying jobs typically require a certain level of education, a garment worker won’t get paid much due to the lack of required education. The only thing beneficial about being a garment worker in the US is that the working conditions are most likely more ethical than that of other less developed countries. In a less developed country such as Indonesia, there most likely aren’t as many occupations above being a garment worker, therefore their salary is commonly in line with their projected living wage. I did find it interesting to see where certain countries stood on the graph that showed the percentage of garment worker’s salaries pertaining to the living wage. The United Kingdom is seemingly a highly developed country, so it is interesting to see those garment manufacturers make a decent percentage of their living wage. Although it has to be taken into consideration all of the domestic high-end brands like Burberry and Chanel who employ top-notch seamstresses and tailors. All in all, this has intrigued me to take a closer look at comparative wages within the apparel industry and what impacts them.

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