Historically one of the biggest garment producers on the African continent, South Africa has experienced falling production over the last 15 years. But 2015 has seen new energy injected in the textile industry where new jobs have been created.
The once mighty South African garment sector has been in steady decline for at least two decades and has shed thousands of jobs. Trade liberalization, increased imports from Asia and the relocation of South African producers to neighbouring and lower wage regimes in Lesotho and Swaziland have hacked away at the South African garment industry.
Over the last 15 years, an estimated 150,000 jobs have been lost in the industry. When South African clothing manufacturers were unable to compete with the influx of cheaper clothing from Asia, they were put out of business.
According to IndustriALL Global Union affiliate, the Southern African Clothing and Textile Workers Union (SACTWU), 2,000 – 3,000 workers have been losing their jobs every year. But now the garment industry in South Africa is growing again with an added uptake of new workers.
Despite job losses, SACTWU has remained well organized with about 80 per cent of workers in the sector belonging to the union. SACTWU is fighting back hard against retrenchments, downsizing and closures while building its influence and engaging on policy at a national level.
The union has upheld its tradition as a fighting union, yet it engages employers and government in dialogue and has made significant gains on sourcing locally and pushing back on trade liberalization.
Simon Eppel, researcher at SACTWU, tells how the union is working to save and increase decent jobs in South Africa’s textile sector:
“The industry continues to lose jobs today, but the number is down substantially. At SACTWU we try to save jobs where they would otherwise be lost, and we have recently been able to actually grow jobs in the industry.”
On balance employment in South Africa’s textile industry is growing – it is up by 1.5 per cent in the last year.
"This is an endorsement that government support for the industry, coupled with our union’s active campaign for jobs, continues to bear fruit,” says Eppel. “After a period of stabilization following years of job losses, employment in our industry appears poised for growth."
Eppel adds that he is “cautiously optimistic” of this tentative turnaround, which is largely due to the energy put in to revive the industry.
One example is the South African government advocating a greening of the industry to make it more sustainable. Among other things this means looking at energy efficiency and assisting companies to replace old machinery with more modern equipment.
Another example is SACTWU’s ‘buy South Africa campaign’, where the union enters into agreements with major companies and institutions to support the local industry.
Since the early 2000s, SACTWU has been running a campaign to buy locally-produced textile products by appealing to consumers on how buying South African will affect the community.
Through mass campaigns and fashion shows with factory workers to showcase the clothes they make, SACTWU engages with consumers to influence the choices they make.
“Our message is received better and better. Consumers are increasingly receptive and positive, and the awareness of the difference they can make in their choices is growing.”
But SACTWU is not only targeting individual consumers to buy South African manufactured products, public procurement is another area where the union is working to influence decision-making. Government departments and state-owned companies are encouraged to buy South African products when tendering for public procurement.
Retail companies have been the target of a very deliberate campaign by SACTWU, where the trade union can alert local factories to public tenders. If a company is compliant with South African labour laws, SACTWU will pass on the information and encourage the company to submit a tender.
Eppel says that these measures have been successful due to a combination of reasons. When new legislation was passed making it easier to participate in public procurement, SACTWU acted to ensure that policy was turned into practice.
Bargaining councils for industry wide bargaining
There is a strong labour architecture in South Africa and the working conditions in the garment industry are better than in many other parts of the world. This is due to the bargaining strength of the union, which has also resulted in better wages in the South African garment sector.
Like in many other parts of the world, South Africa’s garment workers are predominantly women, often single mothers and their family’s soul breadwinner. Wages in the garment sector can be very low, so these are usually vulnerable workers who are more than likely very poor with very few other employment opportunities available to them due to South Africa’s high unemployment rates.
There are several minimum wages in South Africa and the unions are working to close wage gaps. A top wage for a skilled garment worker is around 950 Rand (US$67) per week. For a lower skilled worker it could be around 700 Rand (US$49) per week.
SACTWU prioritizes centralized bargaining as the mechanism to achieve the best wage outcomes for workers. SACTWU negotiates in three national bargaining councils for the clothing, textile and leather sectors and the outcomes affect over 100,000 workers. In 2015 sectoral wage increases were above inflation.
“Although the wages are mutually agreed in the bargaining councils, we would not call them living wages. We are working to develop the industry along decent lines and there are discussions on going towards a living wage.”
“The cost of living is high in South Africa, so unions try to compensate our members and offer additional services like health services for example,” says Eppel.
Changes in retail sourcing
In June 2015, a South African clothing textile and leather tripartite seminar called by SACTWU, was held in Cape Town. The event was held alongside the Cape Town Fashion Festival with the key address given by Minister of Economic Development Ebrahim Patel who spoke of the government’s commitment to a green manufacturing sector.
Presentations at the seminar included supportive policy and initiatives from the government to maintain the sector and jobs as well as best practices by industry for greater efficiencies in production and energy and water consumption that have been achieved with state support.
Fresh hope for the sector may also be offered through the model known as quick response.
South African retailers mostly depend on the traditional retailing model which often results in two scenarios. The first is the steady supply of relatively few items. This often results in excess supply that then requires markdown. The second is under supply when the demand for an item is greatest resulting in lost sales.
South African retailers are under pressure to change their model because of increased competition from foreign retailers that have entered the domestic market. Many multinational retailers use quick response retailing which provides improved retained margins and enhanced stock turn, offering the merchandise customers find most attractive, resulting in less lost sales.
Eppel says that changes in retail sourcing practices, resulting in demand driven supply chains are mostly good news for garment workers in Southern Africa:
“Retailers use technology to analyze what is being bought in store, understanding what customers want, when they want it. So instead of basing orders on forecast demand for a whole season ahead, current trends are analyzed to present the customers with the most attractive products in the shortest possible time.”
Together with inflation in Asia and a weak Rand, many believe that quick response provides opportunities for South African producers. The model relies on close proximity of the producer to the retailer, with a maximum lead time of six weeks, so distant off shore suppliers are not an option. South Africa is well placed because industry support and a commitment from local producers has resulted in better standards and efficiencies, reducing lead times.
South Africa has been seeking niche market development as a strategy to keep the sector alive and there is a strong tripartite commitment to maintaining existing production capacity and jobs. As a result many producers have already achieved international manufacturing standards and have quick response capabilities.
“The garment supply chain has an important role to play and this tripartite seminar called by SACTWU created a very important space of debate and generation of proposals,” says Fernando Lopes, assistant general secretary IndustriALL.
“Investment in the garment sector has traditionally favoured environments of weak labour standards enforcement, low wages and poor trade union organization. But changes in sourcing practices mean workers that share proximity to major market can, if united, take on issues as global supply chains become more regional in nature.”
The opportunities for South African producers coming from the quick response retailing model applied in South Africa and even Europe are real, but the general pattern of comparative advantage in low wage neighbouring countries remains unchanged. This underlines the need for SACTWU to continue to drive an industrial policy agenda in the interest of workers, putting pressure on government and manufacturers for policies that support the continued growth of the textile and garment industry, creating more jobs.
The Southern African Clothing & Textile Workers’ Union (SACTWU) is the largest trade union in the clothing, textile, leather and footwear industry in South Africa and globally, with nearly 100,000 members.
SACTWU’s membership covers around 80 per cent of the textile and garment workers in South Africa.