My sister in the US recently bought a smartly embroidered top for $35, and was amused to find a `Made in India' tag. Had she known that only $1.8 of the retail price went for labour, she would have been shocked. While the Indian garment sector earns high export revenues, the flip side is that the substantial profit accruing to foreign retailers and, to a lesser extent, Indian manufacturers, is not reflected in the garment workers' wages.
Asian countries dominate global trade in readymade garments. In 2004, Asian trade in this sector was about $138 billion (UN Comtrade data). In Bangalore alone, large retail chains from the US and Europe such as GAP, Wal-Mart, Tommy Hilfiger and JC Penny have outsourced in 2005 orders worth $269.6 million to large factories. (From an unpublished 2005 report prepared by Mark Francoise of the US-based United Students Against Sweatshops).
The Indian scenario
The Indian garment industry workforce predominantly comprises first-generation women workers. K.R. Jayaram, Field Coordinator, CIVIDEP (Civil Initiatives for Peace and Development), which works with garment workers in the Mysore Road area, estimates that in the bigger factories in Bangalore, 50-70 per cent of garment workers are the sole earners in their family.
Due to pressure from buyer-imposed mechanisms like social audits, most large garment manufacturers pay the statutory minimum wages fixed for this industry. In India, minimum wages are fixed industry-wise by respective State Governments. However, like most minimum wages, these wages do not fulfil the human needs of the worker and her family.
Single parent Jayamala (name changed) is a tailor and earns Rs 2,450 a month; and because tailoring is skilled work, this is at the higher end of the wage scale.
But with two school-going children, she finds it difficult to make ends meet. Food comprising only the cheapest vegetables constitutes the biggest expenditure. Fuel needs are scarcely met through kerosene and firewood. She finds public transport buses too expensive and uses private tempos and lorries, spending Rs 3 a day. For other necessary expenditure, like medical care, she is constrained to take loans at exorbitant interest rates.
A tricky situation
However, instituting a `fair wage' in the export-oriented garment manufacturing firms is tricky, and industrial adjudicators have no jurisdiction over foreign retail chains. Also, quite often garment manufacturers don't earn enough to pay the "need-based minimum wage".
The crucial aspect here is that foreign buyers chalk up a huge profit margin. Take the $35 top: the total cost to the retailer until it reaches the country where the garment will be sold is only $10. Even after accounting for warehousing costs, designer's fees and other miscellaneous costs, the retailing chain makes phenomenal profits.
Assuming that activists and trade unions in India do agitate for increased wage scales in the garment industry, manufacturers would point out that if their labour costs and hence billing costs increase, buyers would shift their business to a cheaper garment-exporting region, like Bangladesh or Indonesia. This is a real possibility in the post-quota system era (after January 2005), where there is no longer a limit on the quantity of garments imported from individual countries.
This has prompted enterprises in South Asia to make their products more price-competitive; by squeezing the only `flexible' factor of production labour. Workers are not being paid even statutory wages, as payment is linked to reaching unreasonably high production targets simply put, unpaid overtime.
Campaigning for better wages
The campaign for an Asia-level wage for garment workers in export concerns intends to stop this "race to the bottom" vis-à-vis wages. The campaign has been initiated by some Indian NGOs CIVIDEP, FEDINA (Foundations for Educational Innovations in Asia) and Stree Jagruthi Samiti, Bangalore; CEC (Centre for Education and Communications), Delhi; and SAVE, Tirupur along with the New Delhi-based coalition of trade unions, New Trade Union Initiative, and the US-based coalition of trade unions and civil society organisations, Jobs with Justice. They now hope to involve Asian organisations working with garment workers in the export segment.
Their argument is that a uniform decent wage in the region would enable countries to compete on the basis of other strengths and not at the cost of workers. Current wages in South Asia hover around the same level. If all these countries rally around a uniform floor-level wage (approximately $3.6 per day), they would have significant leverage to achieve their demand.
In today's market economy, any additional cost to the manufacturer is passed on to the consumer. If a garment worker's wage is doubled, it would mean a mere 2-4 per cent increase in retail price. A sample survey of customers in the US indicated that they were willing to accept this marginal increase, if explained in the proper context.
A realistic campaign?
But how realistic is the campaign? After all, it marks a shift from traditional methods of workers' struggle and projects new ways of collective bargaining. C. Gopinath, Director, CIVIDEP, argues that this is necessitated by the fact that, currently, the industry's predominantly women workers are "first-generation workers who have no tradition of organising". They face many hurdles in undertaking collective action, most importantly pugnacious managers who threaten immediate dismissal if workers dare ask for a raise.
However, a lawyer with a Left party legal cell in Bangalore challenges the very basis of the concept. He believes that focusing only on the large garment exporting companies in these countries will create "wage islands" and discriminate against garment workers who produce goods for the domestic market, when there is no difference in the nature of work or level of skill required.
Accepting that there will be discrimination, Gopinath nevertheless contends that it is within the logic of the global garment supply chain that the strongest, most organisable section of workers will be picked. Gains achieved by this sector will have a "trickle-down effect". Manufacturers for the domestic market will feel the pressure to improve working conditions and a resolve to get organised will be generated amongst workers in these concerns.
The economic imbalance, he points out, is "in the utter exploitation of the workers... in the global supply chain with the retailers cornering gains at the expense of workers. Asian workers are producing two-thirds of the world's garments and they must get a social wage."
Picture by Bijoy Ghosh
Women's Feature Service