What happens to workers if garment factories close?

By Ananda S Wijesuriya
Chairman, Seethawaka Industrial Park
Manufacturers Association.

The article ‘Low wages, failing profits of Lankan garment factories' in The Sunday Times FT of October 1, which extensively quoted Dr. Renuka Jayatissa, Consultant Medical Nutritionologist MRI and P. Gowthaman, Coordinator, of the Apparel Industry Labour Rights Movement (AlaRM), should be compulsory reading material for industrialists and HR practitioners in Sri Lanka.

Some of the salient features pointed out in the article were:

* The income and expenditure calculations for the “Sector living wage” shows that garment girls work over 8 hours a day to earn enough be malnourished.

* As income, even with overtime and incentives, are not enough to live on, garment workers, mainly young girls, are cutting down on the quality and quantity of their food.

* During a study done 2 years ago, it was found that 55% of the garment girls were iron deficient and 35% were anaemic.

* Due to poor nutrition they spend more on medicine. The iron deficiency also results in low output and low productivity at work.

* Salaries of workers in the garment industry cannot be increased to be on par with the grade 3 level labour of the public sector as this increased cost would wipe away the poor return of 4% currently earned.

From the above it is obvious that continuing with the garment industry will not benefit the country, neither the investors nor the employees. However, if the employers take to heart the findings of the MRI study quoted above, they can with a minimum expenditure address the issue of iron deficiency highlighted.

It is almost mandatory that workers in the garment industry be provided a free meal. Since the authorities have not been very specific on the definition of the meal, some factories provide breakfast whilst others who are keen to ensure their workers are better off provide a wholesome meal. Since it is a proven fact that low productivity is related to the anaemic condition of the person, the factory owners could take steps to address this issue and ensure that their workers are healthy which would result in higher productivity thereby recoup the additional cost and improve their profitability. Food supplement or food which has high iron content ( 3 ounces of meat; egg, fish) which can provide the required amounts of approximately 18 milligrams of iron for the female workers in the food intake will not be unbearable. This is why we said at the beginning that the article in the newspaper is compulsory reading for industrialists and HR practitioners especially the latter who has to bear the responsibility to bring about such conditions in the workplace by prevailing upon the management of the benefits that would accrue to offset the cost incurred. Invariably whenever the cost increase is proposed, irrespective of the benefits there would be opposition especially from the accounting type who will be worried about the bottom line. However learned HR practitioners can educate all concerned that this is not an expenditure but an investment to ensure higher productivity thus improving the profitability through incurring Rs. 10 or 15 added cost, so that the meal given to the workers consists of adequate nutrients to improve the health standards. Workers’ meal programmes are good for employees, good for business and good for the nation. Adequate nourishment can raise national productivity levels by 20% and a 1% kilocalorie increase results in a 2.27% increase in general labour productivity (Galenson & Pyatt research 1964). It is clear that without a foundation of good workplace nutrition, many other hard-fought benefits become meaningless. A good medical plan will be pushed to the limit if workers are sick from poor nutrition. Job security is impossible to guarantee when sick workers and malnourished children crush national productivity and investment. Government, employers, workers and their organizations together must capitalize on the opportunity to use the workplace as a platform to promote nutrition in order to reap the rewards that so clearly yields: health, safety, productivity, economic growth and a civil society. If a worker is to buy her breakfast at a boutique, it will cost around Rs. 30 per day. Since that being the most important meal in nutrient intake, if the industrialists and HR Managers can pay enough attention to this aspect, it will be easy for them to use their purchasing power and arrange a well balanced breakfast at much less cost and offer at a subsidized rate to encourage timely attendance. This would definitely help the workers and the industrialists alike, but would the latter take the necessary steps? It is heartening to note that some factories who care for their employees welfare have realized the benefits and are contributing to build a healthy nation.

Study
The MRI study has revealed approximately 45% (not 55% as stated in the article) anaemia prevalence amongst female garment workers, which is higher than the approximately 32% amongst age-specific group of women in the general population. The study did reveal that the best way to address the issue that causes the anaemic condition such as poor dietary habits, regular avoidance of breakfast and intermittent skip of lunch, etc. should be through a well designed health education program.

Although the article tries to portray the earnings of the garment female workers to this poor nutritional status, it is well known through WHO findings that nutritional anaemia can be due to the age, gender, physiological state and attitudes and in that age group varies from 38% in Africa to 60% in South East Asia.

A statement such as ‘garment girls’ spend more on medical treatment than the national average, is again a misleading statement since these employees have a regular income and thus would pay for medicine, rather than having to take leave to get treatment at the government hospitals.

Interestingly, it has also been found out according to the preliminary findings from the Consumer Finances and Socio-economic Survey 2003/04 of the Central Bank of Sri Lanka, the structure of household expenditure had changed significantly and that expediture share on food and beverages had declined from 47% to 37%, to be replaced by many categories of non-food expenditure. The highest annual average increases in real terms were for expenditure in the categories of Communication (21%) and Education (11%), followed by Recreation and culture (10%), Furnishings, household equipment and maintenance (6.5%).

Increasing household income alone is not enough to do something significant towards combating malnutrition in the world. Modernization and market expansion have created consumption preferences that compete with food as a need thus leading to decreasing percentages of household income being spent on nutrient intake. Based on recent studies and reviews in well over two dozen countries, strong claims are being made that improvements in overall household income alone do not lead to improved nutritional status. Programmes with the sole goal of enhancing income, it is claimed, have not been as effective in alleviating malnutrition as expected. Computer-run models based on some of the International Food Policy Research Institute studies imply that even doubling household income would not significantly improve the nutritional status of women and children (Kennedy 1989, Von Braun & Pandya-Lorch 1991).

Salaries
From the above findings we can point out that even if the salaries are doubled this would not in any way minimize or alleviate problems such as malnutrition, etc amongst the workers or populace. Malnutrition can be a common factor among the whole populace and research conducted as well as carried out which shows that the industries are not at all responsible for bringing iron deficiency amongst ‘garment girls’ as alluded to in this article. On the other hand proper education about nutrients and food habits would be more productive and helpful to workers. If this is the case why are trade unions and AlaRM raising such issues using parts of research material to highlight their point and sowing discontent amongst other workers?

Young girls would first try to satiate their dreams out of their earning than needs since there being hordes of new behaviour patterns, clothes, shampoos, communication, entertainment, etc that are hyped as priorities of life than staying healthy. It is interesting to note that even as per the study done by AlaRM, the expenditure incurred by workers on food are in the range of 25% (FTZs) and 31% (outside FTZs), which is at least 12.4% less than the national average. In effect, they spent 19% more on clothing, personal care, transport and communication, consumer durables and others than the national average. This probably can lead to the conclusion that garment girls care less about nutrient intake and spend their money on other wants and thus it is not the income level but the expenditure pattern that causes problems hence the MRI suggestion of health education. Walk into towns bordering factories or industrial parks and see what is most flourishing. The writer has experience of a conversation with a bank manager where the accounts of employees of a factory at Bulnewa were transacted and it was revealed that the majority has not drawn any money for 7-8 months.

When a survey was carried out among the workers, spearheaded by non other than the wife of the British High Commissioner at that time, whether they spend money buying meat, poultry products, the answer was ‘no, we have adequate food’. When questioned what they intend to do with the money saved the majority answered that is to purchase agricultural equipment such as tractors, hand pumps, etc. Of course, this is a farming area based experience where the economy grew due to the opening of the 200 garment factory programme. We have seen similar advancements where money is spent on building houses and other considered essentials around the area where the Seethawaka Industrial Park is located. This is evident when one travels around the country and see prosperous towns which have blossomed after the 200 garment factories opened close by. In the particular example cited above at Bulnewa, at that time there were over Rs. 1.5 million per month poured into the area by way of wages that swell the economic growth bringing many benefits

The garment industry has given a real boost to the economy of this country although the value addition is around 30- 35% of the US$ 3.0 billion exports spoken. It is correct that the industry has probably matured and it is time to move into other areas. As against the situation in the country 15 years ago which had hardly any factories around the country, today there a section of the populace who understand the work ethics, discipline and are able to understand industry norms. The world is different and Sri Lanka is full of educated intelligent young people and perhaps we should think about converting these garment factories to the latest outsource activity in the global economy.

Better deal
In the study carried out by P Gowthaman for AlaRM, it is found that the average gross income of employees in the garment industry is approximately Rs. 7,700 p.m. It also states that over 80% of them are GCE O/L or less qualified. Therefore, the question that comes to mind is what is the nutrient intake of graduates who spent at least another six-seven years more on studies and are paid an allowance of Rs. 6,000 p.m. by the government?

There is a campaign underway currently in Bangladesh where unions are demanding a basic salary of B. Taka 3,000 (Rs 4,880) to which the industry is responding by threatening to close factories if TK 1600 (Rs. 2,603) is implemented. This would show the comparable wages paid to those factory workers who are competing with Sri Lanka.

We have to look at things differently. In the article the term used is ‘garment girls’, which is perhaps a way to the concurrent social status the country attributes to these fine women (and men) who do work hard to keep a section of the economy buoyant, facing real competition.

They deserve a better deal in the hands of trade unions and AlaRM who can do different things to make their life better by involving in educating them to manage their income to be spent on necessities than wants, rather than trying to bankrupt the industry sector in toto Can we ask who will benefit when the garment industries have to close down unable to compete with other countries?