With funding from the Initiative for Global Solidarity, implemented by the German development agency Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), FLA led two living wage projects in Bangladesh and Vietnam in the garment and footwear sectors from 2022-2025. These projects were designed to understand the complexities of buyer-supplier relationships, purchasing practices, and compensation systems to make improvements to wages for workers.
In both countries, FLA uses the minimum wage-setting mechanisms as a bellwether to understand the feasibility of wage progress for workers. In Bangladesh, this project launched six months after the monthly minimum wage for garment workers increased from 8,000 BDT ($72.90) in 2018 to 12,500 BDT ($133) in 2023. FLA’s wage trends report on Bangladesh showed a lack of wage progress for workers from 2019 to 2022 – despite the mechanism that increases current workers’ wages five percent annually – since this law does not apply to all workers. In Vietnam, FLA started its work in this country in 2022, with the background that the minimum wage is regularly updated. This commitment from the government ensures that minimum wages for garment sector workers have increased steadily following the COVID-19 pandemic. Both projects used the living wage estimates by the Global Living Wage Coalition to benchmark wage progress.
Bangladesh
This living wage case study built off of the learnings from FLA’s project in Vietnam, and was adapted to fit the wage dynamics in the country. FLA partnered with the Global Worker Dialogue to conduct off-site worker surveys on workers’ wages, living conditions, and working conditions. Wage evaluations were executed by InSync Global and FLA evaluated buyers’ purchasing practices using results from the companies’ Accreditation Milestone 5 evaluations and testing against the draft Purchasing Practices HRDD Framework.
FLA worked with four factories and seven Fair Labor Accredited brands to study the wage progress made up to 2023, how the factory manages its compensation system in 2024 and 2025, and how brands are supporting with purchasing practices. In January 2025, FLA and the Ethical Trading Initiative hosted a buyer-supplier roundtable workshop, which included summaries of the projects led by FLA and ETI, training on responsible purchasing practices and impacts to living wage and social dialogue, and break-out groups for buyer-supplier dialogue on purchasing practices and other factors impacting wage progress in Bangladesh. FLA also co-led a joint-brand delegation with the American Apparel and Footwear Association to advocate for the interim government to improver workers’ rights – especially to emphasize joint recommendations for responsible business conduct raised in August 2024.
This project started in May 2024 and will conclude in April 2025 with reporting to follow in 2025.
Vietnam
With on-the-ground support and expertise from the Research Center for Employment Relations (ERC), this was the first of the living wage projects, starting in 2022 and concluding in 2024. The pilot sought to understand the complexities in buyer-supplier relationships in multi-buyer apparel and footwear factories, and improve purchasing and costing practices, wage transparency, and worker engagement.
Through this pilot, FLA worked with two factories, and eight brands from the FLA, FairWear, and GIZ’s Partnership for Sustainable Textile. Wage evaluations included a desktop and payroll review, as well as interviews with workers and management. ERC offered insight and recommendations on how the factories and buyers can support wage progress by improving costing practices, diversifying product categories, forecasting and incentives, and worker engagement and dialogue. FLA reviewed buyers’ overall purchasing practices policies and procedures, providing recommendations for companies to improve responsible purchasing practices policies across their supply chains. The pilot was previewed for local stakeholders in Vietnam, including buyers, suppliers, NGOs, and representatives from the Vietnam General Confederation of Labour and Ministry of Labor in October 2022. In 2024, FLA hosted two separate workshops with suppliers and buyers to share the learnings, provide training on living wage, and discuss the wage dynamics that impact suppliers and buyers in Vietnam.
This project began in June 2022 and concluded in August 2024, with reporting to follow in 2025.
Our communication [with the buyers] is good, but we want them to understand us more… the buyers have difficulties but we wish they [would] visit us in person. We have to support 6,000 workers… we cannot close down our factory to wait until they overcome their difficulties.
