According to a new analysis from the non-profit Fair Labor Association (FLA), clothing companies in Vietnam were able to raise workers' wages by as much as 57 per cent over the past three years.
|Vietnamese factory workers can now earn a living wage without having to work overtime |
The report documents significant increases in net wages – ranging from 29 per cent to 57 per cent over a 3-year period. The increases allowed factory workers in Vietnam to earn a living wage without working overtime.
“Too often, factory workers must work excessive overtime to supplement low pay to make ends meet, but that’s not fair to workers,” said FLA president and CEO Sharon Waxman. “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.”
Overtime that exceeds 60 hours per week or leaves workers without one day of rest per week is common in global supply chains. Typically, factory workers seek overtime when they cannot afford basic expenses to support their families because of low pay earned during a regular workweek. Low pay is attributable to the pressure to produce products quickly and at a low cost based on expectations from buyers, retailers, and consumers.
The new FLA report 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.
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 5-year period, the average increase in real wages was 39 per cent.
Vietnam is the FLA’s second-highest sourcing country among FLA members, with more than 600 factories across affiliated companies and suppliers. The report covers 54 factory assessments in Vietnam conducted from 2012 to 2019.