The ultimate objective of the ILO minimum wage conventions, “is to ensure to workers a minimum wage that will provide a satisfactory standard of living to them and their families”.

Asia Floor Wage

What is it and why do we need one?

 

Most of the world's garments are made in Asia, and yet the Asian workers who make them are not paid enough to live on.

The problem 

The garment industry in Asia provides millions of job to millions of women and men, it has been behind some of the biggest economic growth in the region.  But this rapid growth has come at a price - and it is the workers who are paying it.

All garment workers in Asia need a wage increase to be able to provide for themselves and their families basic needs - including housing, food, education and healthcare.  However often when workers struggle to improve their wage and conditions in one country, companies relocate to another country where wages and conditions are lower. 

Workers, are therefore, afraid to fight  for better wages because they might lose their jobs.


The solution - An Asia Floor Wage

 

The Asia Floor Wage proposes a wage for garment workers across Asia that would be enough for workers to live on.

Based on some common factors including the number of family members to be supported, the basic nutritional needs of a  worker and their dependents and their other basic needs including healthcare and education, the Asia Floor Wage is able to calculate the minimum amount needed to constitute a living wage. 

Did you know?

For an average item of clothing only between 0.5-3% of the cost goes to the worker who made it.  This means that on an €8 t-shirt, the most a worker will get paid is 24 cents.

The Asia Floor Wage is calculated in PPP$ -  Purchasing Power Parity $, which is an imaginary currency built on the consumption of goods and services by people, this currency allows us to compare the standard of living between countries, regardless of the national currency.   You can read more about how it is calculated here.

Currently (2017) the Asia Floor Wage is calculated to be PPP$ 1181.

The Asia Floor Wage is different in each country's national currency, but has the power to buy the same set of good and services in all countries. 

 

A regional calculation of a living wage is necessary in order to ensure workers receive a decent wage.  The Asia Floor Wage calculates a floor level that no wage in Asia should drop below.

Calculating a Living Wage

A regional calculation of a living wage is necessary in order to ensure workers receive a decent wage. The Asia Floor Wage calculates a floor level that no wage in Asia should drop below.

Across Asia governments set minimum wage levels which companies are obliged to comply with.  However in every garment producing country the Asia Floor Wage Alliance works in the minimum wage levels fall far below a wage a person could live on.

Living Wage v. Minimum Wage

Across Asia governments set minimum wage levels which companies are obliged to comply with. However in every garment producing country the Asia Floor Wage Alliance works in the minimum wage levels fall far below a wage a person could live on.

The Asia Floor Wage is a way to calculate a living wage that can be applied across all countries in Asia.  By calculating the living costs across the region a wage rate is reached that would allow garment workers to earn enough lo live on in their respective countries, whilst preventing brands from moving elsewhere for lower wages.

5 steps to calculating a Living Wage

The Asia Floor Wage is a way to calculate a living wage that can be applied across all countries in Asia. By calculating the living costs across the region a wage rate is reached that would allow garment workers to earn enough lo live on in their respective countries, whilst preventing brands from moving elsewhere for lower wages.

The 2017 Asia Floor Wage figure is PPP$ 1181.

Below is this calculation in local currency.

 

For Asian countries where Food Basket Research was done:

Countryconv. factorAsia Floor Wage in local currency
Bangladesh 31.9 37661 Takas
Cambodia 1642.9 1,939,606 Riel
India 19.98 23588 Rupees
Indonesia 4985.7 5,886,112 Rupiah

For Asian countries that did not do Food Basket Research:

Countryconv. factorAsia Floor Wage in local currency
China 3.85 4547 RMB
Malaysia 1.66 1960 Ringgit
Pakistan 32.08 37886 PKR
Philippines 20.20 23856 PHP
Sri Lanka 49.19 58093 SLR
Thailand 49.19 15140 Baht

(for comparison, see also the 2013 and 2015 numbers)

See the differences between the Asia Floor Wage and the minimum wage

Asia Floor Wage: the animated story...