South African union slams minimum wage compliance criticism

14.02.2013

Sactwu has taken issue with a report by the Centre for Development Enterprises that claims efforts to establish minimum wage compliance in the clothing sector is destroying the sector and resulting in massive job losses.

The report asserts that the clothing sector provides an example of how sector labour market institutions and industrial policy creates collusion between government, trade unions and big business that adversely affects jobs in labour intensive sectors.

The report criticises the tough stance taken by the clothing industry bargaining council to ensure that workers are paid the minimum wage. It was released about the same time that five small clothing companies are challenging having to comply with the legislated minimum wage.  

Andre Kriel, General Secretary of the South African Clothing and Textile Workers Union (Sactwu) has spoken out on the attack on minimum wages in the sector, which start at USD42 a week and even at the highest pay grade, clothing workers are the lowest in South Africa’s manufacturing sector.

Kriel contests circulating information that the bargaining council intends to close down 450 factories for non wage compliance, which would result in 16,000 job losses. He reports that the council holds writs against 297 companies that employ 5,500 workers and that many of these companies are taking steps to become compliant.  

“The issue is not a trade off between jobs and decent work, almost as if the two issues are mutually exclusive. Competitive advantage cannot be based on illegality and a race to the bottom,” states Kriel.

Kriel blames massive job losses in the sector on trade policies and a fast tracked tariff reduction regime introduced more than 15 years ago. Whilst this is true, it is no secret that many South African companies looking to escape minimum wages in the sector have relocated their operations. In Lesotho, a haven for such companies that is surrounded by South Africa on all sides, factory shells can’t be built fast enough for South African clothing companies that want to move in.

Clothing workers in Lesotho are challenging their low wages. An IL0 study in 2011 showed that real wages had declined over a five year period and that the minimum wage in the clothing sector was below that of the general minimum wage in Lesotho. At the time minimum wage in the sector ranged from USD92 to USD113 a month according to job tasks.

Unions demanded a massive increase of up to 172 per cent to USD238 a month and a massive stay away was orchestrated but secured a wage increase of less than 10 per cent. This seemingly unrealistic demand was supported by an ILO Living Wage study in 2012 and efforts continue in Lesotho to push up wages in the clothing sector, which if successful would erode Lesotho’s competitive advantage.

There is no easy solution to achieving decent work in the clothing sector, which is characterised by unfair competition based on wage exploitation and the race to the bottom. In a globalized world, unions need to look beyond national labour legislation to protect wages in labour intensive sectors. International solidarity is required to address competition in the sector that drives down wages and maintains poor compliance with international labour standards.