Wage hike may lead to layoffs in Bolivian textile sector

06 May '13

1 min read

The recent hike in minimum wages may lead to layoffs in Bolivian textile and apparel sector, El Conglomerado Textil Boliviano (COTEXBO or Bolivian Textile Conglomerate), has said.

The textile sector in Bolivia, a land-locked country in central South America, is a labour-intensive sector, and hence the increase in salaries might lead to layoffs, said Jesus Acosta, president of COTEXBO, reports La Patria.

Last month, the Bolivian Government issued the Supreme Decree 1549, which marks an 8 percent increase in base salary and 20 percent rise in national minimum wage.

To compensate the hike in salary, the textile sector may have to suspend about two employees in microenterprises that employ a maximum of ten workers.

Similarly, small textile enterprises may layoff about four employees, while large scale textile firms might have to let go about five to ten employees, in order to compensate for the rise in wages, Mr. Acosta said.

He added that the increase in salary can also be recovered by raising the price of final products, but it may mean losing competitiveness in the market.

COTEXBO’s membership consists of various spinning, weaving, and apparel firms. Its mission is to articulate and boost competitiveness, and thereby to develop the Bolivian textile and clothing industry.

Fibre2fashion News Desk - India

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