Ethiopia's rock-bottom labor costs have attracted companies making garments for some of the world's best-known brands. Labels include H&M, Gap, Tommy Hilfiger, JC Penney and Calvin Klein.
Factories in Ethiopia making clothes for top global brands are paying their workers far less than counterparts in other low-paying countries, according to a report by New York University's Stern Center for Business and Human Rights released this week.
According to the report, the Ethiopian government assured suppliers and buyers that workers there would happily work for the equivalent of $26 (€23) a month.
"In their eagerness to create a 'Made in Ethiopia' brand, the government, global brands, and foreign manufacturers failed to anticipate that the base wage was simply too little for workers to live on," said Paul Barrett, who authored the report. Ethiopia has no official minimum wage for the private sector.
Ethiopian factory workers produce apparel for top fashion labels such as H&M, Gap, Tommy Hilfiger, JC Penney and Calvin Klein. Their counterparts in Kenya earn a higher wage: $207 a month, and those in China $326.
The report, "Made in Ethiopia: Challenges in the Garment Industry's New Frontier," claimed the low monthly wage paid to garment workers in Ethiopia does not cover their basic needs. Even after additional payments of attendance bonuses and expenses for food and transportation, most workers struggle to get by.