"Falling behind: Minimum wage-setting in Sri Lanka’s apparel industry", 16 Dec 2025

Sri Lanka has revised its national minimum wage, including wages for its 360,000 apparel workers, in 2024 and 2025 and again in 2026—a period of profound economic change for the country. ..this policy brief an analysis of the government’s wage-setting process and changes in the minimum wage’s value and purchasing power over the last 15 years. ..analysis takes account of the impacts of Sri Lanka’s recent economic crisis and compares wage-setting in competing apparel industries, including a close look at wage-setting in one of Sri Lanka’s competitors, Cambodia. .. policy recommendations for government, manufacturers, workers and their organizations and the leading buyers of Sri Lankan apparel.

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This policy brief by the Global Labor Institute (GLI) examines the evolution, adequacy, and impacts of minimum wage-setting in Sri Lanka’s apparel industry during a period of profound economic upheaval. Focusing on wage revisions between 2010 and 2026, the report analyses how Sri Lanka’s irregular and employer-favoured wage-setting mechanisms have failed to protect the real incomes and living standards of apparel workers, who number around 360,000 and are predominantly women.

The report finds that Sri Lanka’s minimum wage policy lacks a predictable, annual review process, unlike major apparel-producing countries such as Vietnam, Indonesia, Cambodia, and China. As a result, minimum wages often stagnated for years, eroding purchasing power, particularly during periods of inflation and currency devaluation. Although nominal minimum wages were raised sharply after the 2022 economic collapse, the brief shows that these increases largely compensated for past losses rather than delivering real gains. In inflation-adjusted terms, the real value of the apparel minimum wage fell in ten of the past fifteen years and only recovered to its 2013 level by 2025.

A central finding is the unequal impact of Sri Lanka’s economic crisis. While currency devaluation reduced labour costs for exporters paid in foreign currencies, workers experienced surging prices for food, fuel, and basic services, severely undermining living standards. The report highlights that women workers, who make up the majority of minimum-wage earners, were disproportionately affected. Despite claims by employers that actual wages exceed legal minimums, the absence of transparent, disaggregated earnings data obscures the true income conditions of workers.

The brief also compares Sri Lanka with Cambodia, where sustained worker mobilisation and institutional reforms led to annual wage reviews and rising real wages without undermining export growth. Drawing on this comparison, the report recommends three key actions: instituting annual minimum wage reviews, adopting living wages as a policy benchmark, and urging global apparel buyers to actively support fair wage-setting and disclose wage data. Overall, the report concludes that without structural reform, Sri Lanka’s wage-setting system will continue to privilege competitiveness over workers’ rights and economic justice.