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Wage hike may hit Jordanian garment sector
17
Oct '11
Image Courtesy: USAID
Image Courtesy: USAID
The Jordanian government has emphasized the need to increase the minimum wages paid to Jordanian workers from the current JD150. Towards that end, an ad hoc committee compromising the employers, workers and officials from the labour ministry has been constituted, which met last week to deliberate on the issue.

The Labour ministry has also exhorted employers to reduce dependence on recruitment of staff from overseas countries. The garment sector, which contributes around 20 percent of overall export earnings, employs about 27,000 foreign workers and 16,000 locals.

The ministry has also underscored its commitment to garment sector investors by offering to impart necessary skills to Jordanian workers through vocational training programs.

Speaking exclusively to fibre2fashion on the outcome of the meeting, Mr Mohammad Mustafa Khorma, President, Jordan Garments, Accessories and Textiles Exporters' Association (JGATE) said, “We could not arrive at any agreement at the meeting as the labor union is trying to push for a minimum wage hike to JD300, i.e. a 100% hike.

“The private sector does not consider this as logical and has agreed to hike the wages to JD180. The unions are demanding the 100 percent increase, by putting forth the argument of high inflation. Now it is for the Prime Minister's Office to decide quantum of hike in wages.”

Providing more details he said, “JGATE is trying to push as much as possible for employing more locals to add better value in the industry. Our message to the government is that the Jordan garment industry cannot afford any increase in minimum wages at all, as profit margins are already very low at 4-5%.

“Jordan faces competition from countries like China, Bangladesh, Vietnam, Sri Lanka, etc. Buyers are asking for cut throat prices, so in order to compete, we have to slash our profit margins. If wages are raised, there will be a direct 10% increase in production costs. So, we will be losing out on 6%, which will make the business precarious.”

Fibre2fashion News Desk - India

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