Wage rise worries Sri Lankan apparel exporters

04 Dec '12

2 min read

Garment manufacturers and exporters in Sri Lanka are worried over the Wages Board’s decision to raise the minimum wages in the country by up to 30 percent.

Yohan Lawrence, the newly appointed chairman of the Sri Lanka Apparel Exporters Association (SLAEA), said an increase in minimum wages could become a hurdle in achieving the US$ 5 billion target in apparel exports by 2015.

Speaking at the annual general meeting of SLAEA, Mr. Lawrence said the hike in wages would hurt the bottom line of garment manufacturing companies. He added that the increase in minimum wages by up to 30 percent would affect the production cost, which will then be passed on to the customers.

He urged the Government and the policy makers to stop increasing minimum wages, and instead turn their focus on salary package module which includes some productivity components like attendance bonuses and production incentives, besides the basic wage.

He said mere giving a rise in wages would not result in increase in productivity, unless it is linked to productivity components. Framing a salary structure that is linked to productivity would be a win-win solution for both the employers and the employees as it would increase productivity, resulting in an increase in profitability, which in turn can be shared by the company with its employees, he added.

Fibre2fashion News Desk - India

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