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Article

13 May 2019

Author:
Paul Barrett, The Washington Post

Ethiopia: Companies and government must invest in living wage to ensure garment industry benefits workers & local economy, says report author

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"A new industry in Ethiopia is creating jobs. But at what cost?", 10 May 2019.

...with wages rising in Asia, companies such as Hanes and H&M have identified a new frontier for low-paid labor...Ethiopia...Entry-level garment workers in Ethiopia typically receive a base salary worth only $26 a month — the lowest, by far, in the worldwide clothing supply chain...Hawassa Industrial Park...is one of five huge publicly owned complexes built for the Ethiopian government by Chinese construction companies...the manufacturing center has already created tens of thousands of jobs...But meager pay levels have contributed to low productivity and high attrition rates. Workers...have trouble living on what they’re paid, leading many of them to quit and return home...There’s great potential in the social and economic experiment unfolding in East Africa, but it will be fulfilled only if workers are rewarded with higher wages and decent living conditions.

The creation of manufacturing hubs such as Hawassa has brought other problems, too. Some government-employed job recruiters sent to villages have exaggerated what workers can earn at the park, leading to disillusionment when reality hits...Cultural clashes between foreign middle managers and Ethiopian line workers are also common...Government officials told us they are considering a minimum wage that would lift the compensation floor for garment workers and other private-sector employees. In addition, the government is preparing a plan under which it would provide free land if foreign manufacturers finance affordable dormitories near the factories...On top of the other challenges, protests related to the country’s volatile ethnic-identity politics have shut down the Hawassa Park three times in the past year...companies will need to see beyond the short-term lure of the world’s lowest wages. Together with the government, they will have to invest time, talent and resources in addressing the ethnic tension in places such as Hawassa, establish a livable minimum wage that ensures decent living conditions for workers, provide more extensive training for workers and expand worker representation...

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