Most of the workers are young uneducated women recruited from agricultural villages, with a promise of better earnings, but earning less than their monthly housing and food necessary income.
With a monthly salary of US$26, Ethiopia has the lowest wages for garment industry workers in the world, as the East African nation aims to become the next manufacturing hub for the fashion industry, according to a new study from New York University's Stern Center for Business and Human Rights.
The report, "Made in Ethiopia: Challenges in the Garment Industry's New Frontier," reveals that the African country’s bid has come at the expense of workers exploitation, something former Ethiopian Prime Minister, Hailemariam Desalegn, was aware of but described as a “generational sacrifice” in order to develop the national industry.
In the investigation, the authors focused on the Hawassa industrial park, about 225 km south of Addis Ababa, the country's capital. Established by the government in 2015, it currently employs about 25,000 workers producing clothes for international labels such as Levi's, Guess, Izod, Tommy Hilfiger, H&M, most of them belonging to the holding PVH.
The US-based company is one of the world's largest apparel chains, running more than 2,000 factories in more than 40 countries, with an annual revenue of US$9.7 billion. The company was the first to move its operation to Ethiopia sold on the government’s promise of "cheap and skilled labor: 1/7 of China and 1/2 of Bangladesh."
"The Rana Plaza disaster, a factory collapse that killed more than 1,100 people in Bangladesh in April 2013, reinforced PVH's determination to start anew in Africa," the study states.
Most of the workers are young uneducated women recruited from agricultural villages, with a promise of better earnings. "I thought the salary would be much higher," one worker said, adding that she "was not told the truth." A rather worrying fact as workers find themselves in a quasi-slave situation.
On the one hand, the investigation does not accuse the factories of implementing sweatshop conditions as "ceilings are high, lights bright and ventilation more than adequate," but on the other expose that a single room within a few kilometers of the park costs about twice as much as they earn (US$52 a month), meaning that workers can’t even afford proper food.
Hard working conditions have taken a toll on productivity, by 2018 factories were replacing all of their workers every 12 months.
“The US$26 per month wage comes nowhere near replacing the worker's physical energy expenditure, forgetting expenses for any other social obligations,” Ayele Gelan, a developmental economist told The African Report, adding that “workers are effectively subsidizing billionaire factory owners!”
Yet for international markets, this exploitation of working-class Ethiopians seems to stimulate future economic growth. According to United Kingdom-based Standard Chartered (SC) report, Ethiopia is one of the seven economies that will be expected to sustain growth rates of around seven percent in their gross domestic product (GDP) in the next decade.
As Ethiopia aims to replicate China’s success it could easily also fall into a vicious circle of neoliberal practices, where cheap labor is extracted from a poor nation without overall improvements to the workers well being, just as in Bangladesh, where wages have not greatly increased in three decades.