The purpose of this study is to ascertain whether the compensation provided by corporations at Hawassa Industrial Park (HIP) is adequate to ensure that workers and their families can maintain a decent life.
The data were collected between July 2021 and January 2022 from 17 fully operational garment and apparel firms in the HIP, Ethiopia, with the financial support of the MasterCard Foundation’s BRIDGES program. The percentage of workers earning below the living wage was estimated using a modified Foster–Greer–Thorbecke class of poverty measure model and a quantile regression to identify the determinants of wages.
According to the findings, 98.7%, 96.6%, 93.5%, 87% and 78.3% of workers, respectively, fall below the living wage benchmark (ETB 2121) when comparing their starting salary, current wage, current wage with bonus, current wage with food subsidy and current wage with bonus and food subsidy. Wage levels were found to be significantly influenced by workers’ education, work experience, job attitude and company size, according to quantile regression analysis.
Because this study used cross-sectional data and all wage and living calculations were calculated based on the circumstances before the significant shift in the country’s foreign exchange regime and the extraordinary inflation that beset the economy after the reform, a follow-up study is required to capture the new dynamics.
Creating jobs, ensuring decent pay and lifting their young people out of extreme poverty are some of the main reasons developing countries strive to attract international investment. Through increased productivity, devoted workers, lower attrition rates and the creation of a positive work atmosphere, industries profit financially. Nevertheless, there is still a dearth of empirical study on the relationship between wage adequacy and living expenses in the apparel and textile industries of Sub-Saharan Africa, with little attention paid to the setting of developing nations.
