US-based Fair Labour Association (FLA) has documented significant increases in net wages—ranging from 29 per cent to 57 per cent over a three-year period—in a recent report. The rise allowed factory workers in China and Vietnam to earn a living wage without working overtime. Factory workers in the supply chains of three FLA affiliates earned more wages during the regular workweek as factories reduced excessive overtime.

Excessive overtime is a persistent issue in apparel factories around the world and a common violation of the FLA standard on hours of work. “A better quality of life for factory workers is within reach when buyers, suppliers, and workers collaborate to achieve a living wage in a regular workweek,” said FLA president and chief executive officer Sharon Waxman in a press release.

The report, ‘Reaching Living Wage for Garment Workers’, presents practical approaches to achieving a living wage through better purchasing practices by buyers and better planning by factory management. Case studies in the report identify the root causes of excessive overtime and describe how buyers, suppliers, and workers collaborated to improve wages and reduce overtime.

Changes at the factory level included workforce engagement to ensure worker feedback was included as factories implemented new systems. The new approaches replaced outdated and insufficient piece-rate systems, allowing workers to earn higher base wages and diversified bonuses that rewarded quality and efficiency. The changes resulted in reduced overtime and wage increases during the regular workweek, exceeding the applicable Global Living Wage Coalition estimates.

For example, in China, New Era and its contract factory in Jiangsu began to talk more regularly about production capacity and upcoming orders. The factory adopted a higher base wage (replacing an hourly wage) and invested in new machinery to simplify production. Within two years, workers’ monthly net wages increased 57 per cent.

In Vietnam, the Maxport Limited production facility in Nam Dinh changed its production planning schedule to assume a shorter workweek, built in time to account for unanticipated delays, and set stricter purchasing guidelines for its customers.

Over a five-year period, the average increase in real wages was 39 per cent, according to the press release.

The report is part of the FLA Fair Compensation Strategy, which outlines a path toward living wages for workers in global supply chains.

By Fibre2Fashion
https://www.fibre2fashion.com/news/apparel-news/us-based-fla-documents-increased-worker-wages-in-china-vietnam-276106-newsdetails.htm