Benchmark Report: Living Wage Report for Tiruppur City, Tamil Nadu, India
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Series 1, Report 18
By Sandhya Barge, M. E. Khan, Richard Anker, Martha Anker, Banwari Periwal and Mital Petiwale
Abstract
The concept of a living wage (LW) is that it should allow the worker and her/his family to live a decent life. This decent life should allow for a low cost nutritious diet, basic healthy housing with essential amenities of water, electricity and sanitation facility, and other essential needs including adequate health care, education of children through secondary school, transport, personal care, entertainment, etc. along with some savings for unforeseen events. This report establishes a living wage for Tiruppur, a city in the state of Tamil Nadu, India. Tiruppur is the biggest center for exports of knitwear in India. Nearly 600,000 people are dependent for their livelihood on 6,250 garment and textile manufacturing factories spread in and around Tiruppur. In 2014, this industry had an annual turnover of US $ 3.6billion. This study, undertaken by Centre for Operations Research and Training (CORT), India was funded by the TransFair e.V. (Fairtrade Germany).
To estimate a living wage for Tiruppur, we used the Anker methodology that uses a combination of primary and secondary data. Primary data collection started with visiting three factories and interacting with key personnel and workers; 52 workers were interviewed on issues like their working pattern, family members, housing, schooling for children, food items consumed, and health. To determine the cost of a nutritious model diet based on WHO recommendations, a market survey was carried out in different locations of Tiruppur from where workers buy their food to find out the cost of common foods eaten by workers. Similarly, information on the rental and utility costs of more than 50 houses was collected and 31 houses were visited. While almost all the houses that were rented by workers did not meet a minimum decency standard, as most were much too small for even a small family (often being 100 square feet in size), we were able to locate and visit 8 basic but decent houses not rented by garment workers that met our minimum decency standard for healthy housing. We also discussed with workers and others the cost of health care from private and public providers, and the cost of schooling. We used available secondary data from the National Sample Survey (NSS), other surveys and the population census for Tamil Nadu to help determine non-food and non-housing expenses and needs, typical family size, typical number of workers per family, and typical wages in Tamil Nadu.
Considering that a typical family in Tiruppur consists of four people (2 adults and 2 children), the living wage for a full-time worker was estimated to be Rs. 13,725 ($205). This allows for a healthy and nutritious diet plan with 2291 calories per family member costing Rs. 7,792 ($117) per month (after taking into consideration free school lunches for children which reduces the cost of meals prepared at home), decent housing with living space of at least around 388 square feet (36 square meters) and basic utilities at a cost of Rs. 4,788 ($72) per month for rent and utilities, and Rs. 5,353 ($80) per month for all other non-food and non-housing needs (such as for health care, children’s education through secondary school, clothing, recreation, transportation, personal care, and other household expenses). Further, the estimation of our living wage also includes a small provision for unexpected expenses of Rs. 897 ($13) per month, as well as the amount of mandatory deductions that would be taken from pay at our living wage (12% for provident fund and 1.75% for ESI) of Rs. 1,807 ($27) per month.
The prevailing wage for cutters, tailors/operators, ironers, and packers (who are the majority of workers in the garment and textile industry) agreed by TEA (Textile Exporters Association) and trade unions in 2016 was Rs. 9,553, which is more than the government minimum wage (Rs. 7,962) notified in 2016. Our estimated living wage (Rs. 13,725) is around 45 percent more than what workers are currently receiving, thereby indicating a big gap that needs to be addressed. The living wage estimated in this report indicates how much garment workers in Tiruppur would need to earn to be able to afford a decent basic living standard in Tiruppur.
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