South African clothing industry needs to adopt a more differentiated approach to wage-setting that enforces basic standards of employment, but tolerates low wage if it can be supplemented with productivity-linked pay, according to a report written by the Professors of University of Cape Town, Nicoli Nattrass and Jeremy Seekings for the Centre for Development and Enterprises (CDE).
Prof. Nicoli Nattrass told fibre2fashion, “We need to drive out low wage and low productivity employment, in order to support higher wage and higher productivity forms of employment in South African garment manufacturing sector.”
Allowing low-wage producers will accommodate the needs of lower-skilled workers as well as the unemployed and poorer consumers who purchase basic clothing goods rather than the pricier, branded, fast fashion products, says the report.
South Africa’s clothing industry is currently in crisis, squeezed between rising wage costs and intensifying international competition.
“Under the guise of promoting ‘decent work’, clothing jobs are simply being exported to low-wage countries such as Lesotho and China by the South Africa’s labour-market institutions such as the South African Clothing and Textile Workers Union (SACTWU),” say the authors.
The report further says the vision of the SACTWU is that only decent jobs with relatively high productivity and high wage should exist in South Africa, and labor-market and industrial policies should prevent any low-wage, low-productivity production.
“The most labor-intensive firms, producing basic clothes for the mass market, have survived in South Africa by relocating to lower-wage regions,” the Professor mentions.
She explains, “The very existence of the rump of labor-intensive manufacturing in South Africa is now threatened by a compliance drive launched in 2010 by the National Bargaining Council for the Clothing Manufacturing Industry (NBC).”
“The NBC’s objective is to force all firms in the clothing industry to comply with the minimum wages agreed to in the Council by member employer associations and the SACTWU. This has serious implications for the prospects of labor-intensive growth in the industry and the country,” she says.
In the circumstances, a more differentiated approach to wage-setting is needed for the South African garment industry, the report concludes.