Living Wage Pilots in Bangladesh and Vietnam

Since 2011, FLA and our members have worked to turn their fair compensation commitments into higher wages for workers in global supply chains. As part of this work, we conducted two studies in key sourcing countries—Vietnam and Bangladesh—to pilot strategies to raise workers’ wages between 2022-2025.

The first phase of the project, in Vietnam, was a pilot initiative to explore opportunities for multi-buyer factories and global brands to collaborate to advance living wages. The second phase, in Bangladesh, was a case study to examine the impact of a recent minimum-wage increase, building on insights from the Vietnam phase of the project. Both phases included worker and management interviews, reviews of buyers’ and suppliers’ policies and practices, and workshops to share lessons learned.

Buyers and suppliers participating in the project received customized recommendations and began developing individual action plans to improve their practices.

Project partners

Fifteen global apparel buyers participated in this project, along with four manufacturers in Bangladesh and two manufacturers in Vietnam.

This project was funded by the Initiative for Global Solidarity, implemented by the German development agency Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ). We also partnered with other multi-stakeholder initiatives including the Ethical Trading Initiative, and civil society organizations and consultants, including the Research Center for Employment Relations (ERC), Global Worker Dialogue, and InSync Global.

Learnings

In September 2025, FLA released a report on learnings from these living wage studies that includes findings and recommendations across the entire project, as well as information on background and methodology. The report also includes wage data analysis across FLA’s members sourcing from Bangladesh and Vietnam. While wages are steadily increasing in both countries, the living wage gap still remained 45.68% in Bangladesh and 18.05% in Vietnam in 2023.

In 2026, FLA began releasing individual project reports on the six participating factories, which assessed workers’ wages at each factory; interviews from workers about their wages, working hours, and purchasing power; and factors at the buyer-supplier level that impact wages.

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Results and recommendations

Across the project, assessors used living wage estimates by the Global Living Wage Coalition to benchmark wage progress. Notably, average wages for workers fall short of GLWC living wage estimates at all of the factories studied, in both Vietnam and Bangladesh.

In Bangladesh, the median worker was found to be working overtime, sometimes working excessive hours, and was still spending nearly two-thirds of their wages on just two basic necessities – leaving little remaining income for savings, emergencies, or other essential costs such as healthcare, education, or transportation. 

FLA recommends that buyers working to implement a living wage commitment should:

• Pursue a transparent costing process with factories that accounts for payment of living wages to workers.
• Encourage collaboration between sustainability and purchasing teams to ensure that purchasing decisions take living-wage commitments into account.
• Incorporate living wage costs into their production prices and find other ways to financially support their suppliers’ progress toward living wages, such as investments in incentive programs.
• Communicate with their suppliers about their support for strong worker engagement practices and social dialogue.
• Collect wage data from suppliers to better understand workers’ wages and which factories are most in need of improvement.
• Examine ways to collaborate with multi-stakeholder partners and other buyers on supporting worker trainings on living wages and collective bargaining.
• Collaborate with each other and multi-stakeholder partners to increase their leverage with factories in pursuit of living wages for workers.