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Rising costs and sustainability challenges creating uncertain future for the industry: ILO


Challenges like rising labor costs, production and process automation, ‘reshoring’ and ‘nearshoring’, as well as increased pressure to transition towards a more sustainable business model, with improved wages and working conditions are creating an uncertain future for the industry and workers alike, says International Labor Organnization in a report titled ‘Employment, wages and productivity trends in the Asian garment sector’.

For decades, the sector has relied heavily on low labour costs to secure global market advantages. Real wages in the sector have increased in most countries although working conditions remain challenging in general, including long and intense working hours, poor occupational safety and health as well as violations of fundamental rights at work, the report said.

Despite the high share of wage and salaried employment and the dominance of larger firms in most countries, a significant proportion of the sector’s workers also remain highly vulnerable, due to widespread informality and the temporary nature of their working arrangements.

Female employees are overrepresented among the sector’s low pay workers, and countries with the lowest shares of female workers also have among the highest gender pay gaps in the garment sector, the report said.

While labour productivity in Asia’s garment sector has risen in recent decades, it remains low relative to other manufacturing sectors. Few garment producing countries have successfully moved up the value-chain in apparel production, with most manufacturers remaining engaged in low-skilled ‘cut-make-trim’ operations, it said.

Data in the report does reveal a positive association between growth in labour productivity and wages in the sector, suggesting that investments in labour productivity may play an important role in helping elevate worker pay.

David Williams, Manager, ILO- Decent Work in Garment Supply Chains Asia program, says, the industry’s future success will depend on mutually reinforcing investments.


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