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New report: Mind the gap

How the global brands are not doing enough to ensure a dignified life for workers in the garment and electronics industry in India.
The report
The report "Mind the Gap" has investigated social conditions for factory workers in India.
How the global brands are not doing enough to ensure a dignified life for workers in the garment and electronics industry in India.

This report is a joint effort of Future in Our Hands (Framtiden i våre hender), Norway and Civil Initiatives for Development and Peace (Cividep), India, both civil society organizations working for fair distribution of wealth globally through respect for the rights of workers and communities. The study compares working conditions and wages in two different global supply chains that cater to the European market with links to South India - the garment industry in Bangalore that produces apparel for well-known European retailers including H&M, a Swedish multinational, and Norwegian Varner Group as also the electronics industry in Sriperumbudur (near Chennai) where electronics companies Dell and Samsung (USA and Korea respectively) are manufacturing their products.

Download the report here: pdf Mind the Gap (9.58 MB)

The report concludes that the working conditions in both supply chains are below universally recognized standards set by International Labour Organization (ILO) in many aspects and the wages these workers are paid cannot be termed as a ‘living wage’. Also the study shows that working conditions in all the five factories cannot yet be termed as “Decent work” – a concept created by the ILO and which stands for the right of employment in conditions of freedom, equity, security and human dignity. The report put a searchlight on the working conditions at five factories in the garment and electronics sector, it compares consumption and expenditure pattern of workers in the two sectors, also to what extent they need to take up loans for various reasons and purposes, as well as their thoughts of the future.

The findings of the study show that decent work - and as a consequence a dignified living - are currently beyond the reach of workers in the garments and electronics supply chains in India due to wages and working conditions that fall far short of national and international standards. Flawed employment policy of the companies and weak industrial relations are clearly some of the main the causes. Job contracts do not balance the rights and obligations of employers and employees, and appointment letters only perfunctorily mention workers’ rights. There is a high degree of hostility against trade union organizing in the factories and to our knowledge none of the factories studied have recognized a trade union. Workers who attempt to unionize are threatened or allegedly even thrown out of their jobs. Those who are assertive at the workplace are not considered for mandatory committees like the Works Committee, the Anti-Sexual Harassment Committee and the Health and Safety Committee. Others are said to be forewarned of the consequences of unionizing at the time of recruitment or induction. This precludes

social dialogue within the industry and stands in the way of a truly democratic workplace. Workers are also prevented from voicing their grievances during social audits. Much of the strained relations between workers and managers are rooted in this adversarial view of managements with regard to trade unions. Production targets are also excessive, and work pressure generates tensions within the shop floor as also affects the health and wellbeing of workers. Many workers work beyond legally stipulated hours, without being paid extra for overtime. This forced overtime comes in the way of sufficient leisure and rest, and of social and personal interactions, causing resentment and distress. High-handed managers and supervisors subject workers to abusive (e.g. scolding) and even illegal or criminal treatment. Workers from all but one factory said that they have received an appointment letter from their employer. However, some workers have little insight into what the terms of employment affect their status and rights at the work place.

Further findings are:
• With the current wages - which in the garment sector are slightly above minimum wage - workers are not able to meet their basic needs let alone lead a dignified life.
• Of the factories researched, wages are just about one half of what would be considered a living wage, both in the electronics and garment sectors.
• With the current low wages in both sectors workers spend almost their entire salary to meet their basic needs. Many are forced to borrow money, mostly to meet housing needs, children’s educational expenses and those involving urgent healthcare.
• Most workers are not able to make any discretionary savings as the entirety of their wages goes into meeting basic needs. Often, inflation forces them to cut down on the purchase of nutritious food items, affecting the overall health of the family.
• The average household income of garment workers in Bangalore and Dell workers in Sriperumbudur is lower than the estimated monthly living costs for a family of three. This is all the more concerning as the average number of household members of these workers is more than three.
• The average household income of workers in the Bangalore rural district is equal to estimated monthly living costs however, the average number of household members is more than three in the case of these workers and their average salary is lower than what workers in Bangalore receive.
• Workers struggle to meet their basic needs, sometimes by seeking overtime work and also by taking up some additional part-time work.
• Some workers do overtime voluntarily, in the hope of signing permanent job contracts.
• Despite their full-time positions, many workers are indebted. With few exceptions all of the workers interviewed were of the opinion that their life would not improve with their current salary and that their future prospects seem rather bleak.

In the absence of a living wage workers in the garment and electronics sector in India seem not to be able to lead a dignified life and secure a livelihood for their dependents. Low wages in both sectors increase workers’ dependence on informal financial sources which keeps them in a vicious circle of indebtedness. These and other findings substantiate the need for a living wage for workers of both sectors to provide decent work and a dignified living. The the management in the factories seem to have limited regard for the physical and mental health of the workers, and most refrain from make the best use of the government initiated health insurance scheme. The Employee State Insurance Scheme is bureaucratic and inefficient, yet workers are deprived of the benefits it could afford them due to a lack of proper understanding and disinterest on the part of management. Workers tell they are not given full information on the hazardous chemicals and processes involved in their work, and there is hardly any monitoring of the health of workers who come in contact with the same.

The industry’s response to criticism of bad working conditions and weak state regulatory mechanisms in the developing countries has been to engage in social audit. Many of the interviewees told the research team that the management prepares the audits in its favour and that workers are instructed on how they should behave during the controls. Hence this control mechanism appears to be inadequate, though at present necessary in the absence of trade unions, and workers’ awareness of social audits and their participation in it is marginal. Brands and Multi-stakeholder initiatives have considerable potential in improving working conditions, but it is obvious they need to go beyond verification and monitoring and must include empowerment of workers and their organizations in their agenda for action if they are serious about bringing about improvement in the working conditions. The methods for collection of information were off-site interviews with workers in the two industries based on a questionnaire and also focus group discussions with workers. Desk research was used to understand concepts like ‘decent work’ that originates from ILO and concepts of minimum wage, living wage and need-based wage that are part of India’s labour law tradition
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