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Hike in labor wages. Curse for clothing enterprises
09 Jun '10
1 min read
Recently, rising labor costs have become issues of common concern in China. Increased social minimum wages have brought labor cost pressures on textile and clothing enterprises, since both the sectors are very labor intensive industries.
According to experts, a back of the envelope calculation reveals that a wage increase by 10-12 percent, will mean a dip in net profits by 5 percent for a few and around 7-8 percent for others.
They also add by saying that, textile and garment processing enterprises working with low-margins but high labor costs, will witness their whole profits getting wiped out if salaries are increased by 10-12 percent.
According to experts, a back of the envelope calculation reveals that a wage increase by 10-12 percent, will mean a dip in net profits by 5 percent for a few and around 7-8 percent for others.
They also add by saying that, textile and garment processing enterprises working with low-margins but high labor costs, will witness their whole profits getting wiped out if salaries are increased by 10-12 percent.
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