Sri Lanka's apparel industry minimum wage pay scale in general has “failed to cover a worker family’s needs due to high inflation,” a spokesperson for the Clean Clothes Campaign (CCC), the international alliance of labour unions and Non Government Organisation (NGOs), said.
Speaking to Just Style, a news agency that covers the global apparel industry the CCC spokesperson said that although in March 2024, Sri Lanka's Government increased the national living wage by 40%, from Rs. 12,500 ($ 42) to Rs.17,500 ($ 59) per month, on top of a Rs. 3,500 budgetary relief allowance, bringing the total minimum monthly pay to Rs. 21,000 ($ 70), the minimum wage is still low compared to the inflation increase.
Clothing exports are Sri Lanka’s highest exchange earner and from 2021 to 2022, it accounted for 52% of the country’s total export revenue, said the CCC. For an export-heavy sector like clothing, employing 350,000 workers directly the pay scale is “inadequate,” argued the NGO.
However, representing Sri Lanka's apparel industry, the Joint Apparel Association Forum (JAAF) General Secretary, Yohan Lawrence told Just Style that the clothing sector’s own industry-agreed minimum wage, adding in the government budgetary allowance, stands around Rs. 24,000 ($ 80).
Of Sri Lanka’s nearly 400 apparel production sites, the CCC claims that more than half are owned by just 10 companies. Of that, 110 production sites are owned by only three companies meaning there is a concentration of power among a few companies.
The NGO has urged the clothing brands to put pressure on clothing manufacturers to ensure they provide adequate worker rights on top of decent pay. Among the key demands are to stop increasing female workers’ overtime working hours from 60 to 75 hours per month, contract terms, protection from arbitrary termination and ensuring the safety of workers taking part in peaceful protests.
Lawrence said that the fluctuations in the currency have strained export-oriented sectors such as clothing, “We agree to prices on a long-term basis” he said that any appreciation of the currency makes exports more expensive.
Moreover, the exchange rate is not a “real reflection” of improving economic conditions, he warned: “Once debt restructuring is agreed and debt payments are recommenced, it will put pressure on the dollar and (the LKR/USD exchange rate) will increase again,” he said adding, however, it will take time for these agreements to bed in and stabilise the country’s financial position.
Going forward, Lawrence told Just Style a reduction in Sri Lankan clothing export sales seen by the end of 2022 has levelled off and therefore a $ 4.5 million export target for this year still looks promising.