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Global textile industry real wages on the decline

In 2001, China paid the lowest real wages in the textile industry among all Asian countries. Salaries however began to grow, eventually rising by 124 per cent in 10 years. This wage rise brought about an increase in the levels of quality in Chinese apparel manufacturing, to allow the industry to compensate for its cost increases.

China’s neighbors have largely benefited from this: they took over as suppliers for entry-level products, while they also had to deal with growing wage demands from their workers. These demands generated robust salary increases in Vietnam and in Indonesia in the same decade. Due to its economic situation and proximity to the US, Haiti too seems to have benefited from this phenomenon.

However, these positive trends hide a rather different reality. Once adjusted for exchange rates and purchasing power parity, textile industry real wages in most countries analysed have declined in the decade in question. Real wages in Mexico posted a record 29 per cent decrease, while in Cambodia they decreased by 22 per cent, starting from a very low salary base.

For some markets, it is hard to calculate the value of paid overtime, which makes up a large part of textile workers’ income in the countries in question. All the more so since such overtime often exceeds the ceilings locally set by law.