European and US fashion brands sourcing from Vietnam adopt tactics that push down workers’ wages. They use harsh negotiating tactics with suppliers that lead to razor-thin margins, which often can be a driver of involuntary or excessive overtime. Workers in Vietnam’s garment and textile factories work excessive hours, sometimes more than 50 hours of overtime a month. Most workers earn more than double the country’s minimum wage but are still unable to pay for their basic needs. So they have to rely on excessive overtime to provide for themselves and their families.
This is so even though garment workers in Vietnam generally get higher wages than those employed in the other regional garment-making hubs such as Cambodia and Bangladesh. Better production planning and contract pricing could cut workers’ reliance on overtime work, which often leads to labor rights violations. Despite some advances for workers, global businesses have come under pressure in recent years to ensure their supply chains are free of labor exploitation, as a worldwide push to end modern slavery gains momentum.
Vietnam, one of the world’s largest garment manufacturers and supplying fashion chains such as Zara and H&M, is home to over 6000 garment and textile factories that employ about three million people. Fashion brands have been urged to review their costing policies to ensure workers are fairly compensated.