Ethiopian workers found to be earning lower than “poverty wages”

By Birhanu Fikade, June 17, 2019

Chinese firms pay lowest wage in manufacturing, construction

(The reporter) — Economists of UK-based institutions have found out that Ethiopian semi-skilled and unskilled workers are employed in the construction and manufacturing sectors earing the least livable wages in the world and are forced to spend more than 50 percent of their wages on food, The Reporter has learned.

A policy study undertaken by researchers of London School of Economics and University of London in collaboration with Renmin University of China and Ethiopian Economics Association (EEA) have found that Ethiopian semi-skilled and unskilled labor force populating the Construction and Manufacturing sectors receive a stiflingly less wages and is unable to cover expenditure for food, housing, clothing and transportation and the like. Carlos Oya (PhD) principal researcher and Florian Schaefer (PhD) co-researcher of “employment patterns and conditions in construction and manufacturing in Ethiopia” who work with SOAS, University of London and London School of Economics, respectively, has announced the findings of the study today in Addis Ababa.

Even comparing it with the internationally set “poverty wages” of USD 58 per month, a poverty wage on basis of purchasing power party (PPP) standards for low income countries, Ethiopian wages were discovered to be much to small. Based on the 2017 market exchange rates, both Chinese and other foreign owned-firms in Ethiopia do pay small wages of USD 53 and USD 55, respectively, the study noted. Ethiopian owned manufacturing firms pay USD 63 per month.

According to Schaefer, the cash take-home pay is what the survey looked at to analyze wage patterns and he argued that it is a “good measure of the command over commodities workers enjoy, as fringe benefits such as food and transport are the most in kind”.

Though, relatively, construction workers are paid higher than manufacturing across the Chinese and other foreign-owned or Ethiopian firms, the Chinese, however, were found to be paying the least FDI wages in Ethiopia.

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Comments

  1. Hello, I am one of the authors who wrote the report this article covers. This article gravely distorts our research findings. The headline is completely untrue and the article contains numerous factual errors. All firms in our study pay wages far ABOVE the international poverty line. The article has been taken retracted by the Reporter Newspaper for that reason. Please take the article down. Many thanks, Dr Florian Schaefer

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