Shackled by Poverty, Employees Battle for Survival

Dec 15 , 2024. By BEZAWIT HULUAGER ( FORTUNE STAFF WRITER )

Industrial parks were envisioned as pillars of the country’s industrialisation strategy, promising economic transformation and job creation. Yet, the reality for many workers paints a picture of exploitation and survival. As global brands benefit from Ethiopia’s low labour costs, the question remains: at what cost to the workers who power this economy? writes BEZAWIT HULUAGER, Fortune Staff Writer.

A 23-year-old woman (name withheld to protect identity) has been working at a garment factory at the Adama Industrial Park, for the past six years. She describes her work as feeling more like "slavery" than a job.

Starting at 850 Br, her salary has only increased by 100 Br annually. To save the 20 Br daily transport fee provided by the company, she has to endure an hour's walk to work every day. She carries the weight of debt from a nearby kiosk but has not dared to ask how much she owes.

Earning a meagre 1,500 Br a month, basic expenses such as shelter are barely met, leaving nothing for other necessities. Living with her unemployed sister and a child, they rely on food shipments from their mother's farm to survive.

“What can I do with this salary?” she desperately asks.

Returning home is unsafe. Her health suffers as a result; she battles a lung disease worsened by the cold weather. Adama, located 90Km from the capital, has a warm climate, but it has gotten to a point where the daily struggle to survive overshadows the environmental comfort.

“Some resort to sex work as a secondary source of income,” she revealed, showing the desperation of workers facing low wages and rising living costs.

Wages remain alarmingly low, with many unable to meet basic needs, compromising their health and quality of life. High inflation exacerbates their plight, eroding the purchasing power of already inadequate salaries.

At the same industrial park, a 36-year-old man (name withheld to protect identity) also struggles to provide for his wife and two children on a monthly salary of 1,200 Br. His younger child’s education alone consumes half of his income.

“We’re living off fruits that grow in our backyard,” he said.

To make ends meet, he takes on extra jobs like cutting wood on Sundays. For workers like him, the concept of rest is a luxury.

“It’s not like I have a choice,” he told Fortune.

Many industrial park employees work extended hours or take on side jobs just to scrape by. The lack of any meaningful upward mobility in their earnings leaves them trapped in a cycle of poverty, with little hope for improvement.

Their stories are emblematic of the widespread hardship faced by industrial park workers, particularly in the garment and textile sector. Workers endure long hours in poorly ventilated factories, with minimal safety measures in place. They described fainting from exhaustion during a shift, only to be reprimanded for slowing production. Others spoke of crowded living spaces shared by up to eight workers, which may not always be convenient for tenants.

The low-wage labour force has attracted foreign investment, particularly in the garment sector, where global brands seek to cut production costs. The government has promoted low wages as a strategy to lure investors, but the human cost is evident. Workers struggle to afford essentials like food, housing, and healthcare, resulting in declining well-being.

Adama Industrial Park currently has 7,115 employees with 6,177 being female within 13 factories.

Government officials claim limited authority to intervene in wage issues. Getachew Tafa, employee & social affairs department head at the Adama City Administration, said although there are multiple complaints, salary negotiations are left to employers and workers.

However, some factories outside the Park have agreed to raise salaries by up to 40pc based on profits, according to Getachew.

According to the Ethiopian Statistical Service, year-on-year food inflation in October 2024 reached 19.2pc, driven by price hikes in staples like bread and cereals (17pc), vegetables (22pc), and meat (15pc). Non-food inflation has also surged, with transport costs rising by 35pc and healthcare by 21pc.

The absence of a minimum wage law compounds the issue. Labour leaders argue that the lack of a wage floor leaves workers vulnerable to exploitation. While Ethiopian labour laws guarantee freedom of association and collective bargaining, these rights are often undermined in industrial parks.

Union leaders report resistance from employers against workers’ attempts to unionise. Industrial park management rarely responds to complaints, citing external pressures to keep costs low to remain competitive globally.

Tesfaye Abdisa, education & training international relations officer at the Confederation of Ethiopian Trade Unions (CETU), says that workers, particularly manufacturing industrial employees, are paid extremely low wages. Low wages, averaging 900 to 1,300 Br, made many resort to only eating the limited food provided at their factories.

“They are not living; they are selling themselves,” he told Fortune.

The suspension of Ethiopia’s African Growth & Opportunity Act (AGOA) privileges in January 2022 has further strained the garment industry, leading to over 10,000 job losses. The Hawassa Industrial Park (HIP), which employed over 35,000 workers and generated 95 million dollars in exports in 2020-21, was particularly affected. A 2020 International Labour Organisation (ILO) report on worker well-being in HIP cited low wages, inadequate occupational safety, and limited healthcare access as major concerns.

ILO’s recent study found that the median monthly wage in Ethiopia is 3,000 Br, or 24 dollars at current exchange rates. Dissatisfaction among workers is widespread, according to the study, with many leaving jobs due to poor wages.

A formal request was made by representatives from CETU to the federal government to establish a minimum wage law, along with mechanisms to influence private employers to raise wages and reduce income tax rates.

Ayalew Ahmed, communication director and former deputy president of CETU called for a minimum wage law to protect private sector workers from exploitation.

The 2019 Labour Proclamation mandates the establishment of a Wage Board comprising representatives from the government, employees, and trade unions to periodically revise minimum wages.

Although representatives of CETU and the Ethiopian Human Rights Commission (EHRC) have been calling on the government to set up the Wage Board, government officials doubt its practicality. Last year, Minister of Labor & Skills Muferihat Kamil told parliamentarians that introducing the minimum wage legislation would be difficult.

Rising living costs, driven by inflation, are not limited to industrial park workers. Fixed-wage earners across sectors are similarly affected.

The federal government recently announced a salary raise for civil servants, but the increase has yet to materialise for many.

For Getaneh Kasse (MD), a doctor at Fenoteselam Hospital, the dream of opening a clinic was shattered due to rising rental payments. His landlord increased the rent by 700 Br, after hearing of the civil servant salary raise, bringing it to a quarter of his income.

“Wage increments have yet to materialise,” he told Fortune. “I doubt it will improve my situation.”

Working at Fenoteselam Hospital in Amhara Regional State for the past five years, his gross salary saw a modest increase of 12pc, now standing at 10,150 Br, owing to promotions. However, living costs have surged to unprecedented levels.

A quintal of teff, which was 5,000 Br, now more than doubled to 13,000 Br; Cooking oil, priced at 90 Br a litre soared to 250 Br; and onions have climbed from 15 Br to as high as 130 Br a kilo.

He has now resorted to starting a small business. Selling some of the equipment he once bought with hopes of starting a clinic, he redirected the funds to complete unfinished touches on his pending house, making it livable. On his social media platform, he called for a rally to support his plan to start a poultry farm with his wife, aiming to diversify his income.

In a LinkedIn post, he outlined the strengths of his proposal: “Our spacious place, my wife’s expertise, and the Prime Minister’s stand on such initiatives.”

Mussa Muhaba, a lecturer at Arba Minch University, has also turned to animal husbandry to support his family. As a post-doctoral student at the same university, he receives 650 Br in pocket money, unchanged for over a decade despite its dwindling purchasing power. He noted how the rising cost of living has outpaced any financial gains.

With food inflation accounting for 58pc of total inflation, affording necessities has become a struggle for many.

Fixed-wage earners are the primary victims of high inflation, according to Dawit Teshale, an economist. He recommended a review of population policies to address the growing unemployment and underemployment resulting from a rapidly growing demography.

“Access to finance for starting side businesses and the availability of overtime work could provide some relief,” he told Fortune.

PUBLISHED ON Dec 15,2024 [ VOL 25 , NO 1285]

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