Will the temporary new entry-level wage structure for the clothing sector have any real effect on the efficiencies of this sector? Is this not just a short-term strategy to appease certain political constituencies? There is no evidence that increasing labour, albeit initially cheaper will provide the space for a clothing operation to become more productive and sharpen its productivity output. In fact my not the cost of manufacturing actually increase thereby pricing a company out of the market?
How competitive is South Africa’s apparel labour wage compared with overseas? On the other hand increase in labour costs and delivery delays and rising cost in Asia provides an opportunity of South Africa to maybe recapture some of its own market.
The increase of cost of labour in China is have impacting on the apparel and even textile sector and China is having to face new threats from its neighbours and find mechanisms to realign these sectors. Some statistic reflect 5-15% increase in 2010 alone. The prosperous Southern coastal province of Guangdone has had a 20% monthly increase in labour. The input cost of labour in apparel production is 15-22%. Big retailers like Guess Inc, AnnTaylor Stores Corp and JC Peeny are contemplating relocating some of purchasing dollars to India, Bangladesh, Indonesia and Cambodia and Vietnam. It now costs about four times more to employ an apparel worker in China than it does in Vietnam.
Labor costs are high in Lesotho compared to other Sub-Saharan African countries. Hourly wages range from approximately $0.14 to $1.80 in apparel-producing African countries as well as in several non-African coun- tries with significant apparel sectors such as Bangladesh, China, and Sri Lanka. Wages in Lesotho average $0.46 an hour, lower than those in Mauritius and South Africa but significantly higher than those in Ethiopia, Kenya, Mada- gascar, Mozambique, and Swaziland. Even when productiv- ity is taken into account (labor costs per shirt), Lesotho still is an expensive manufacturer compared with Ethiopia, Kenya, Madagascar, and Mozambique (reference: Apparel Exports Lesotho, Chapter 13, 2009)
Labour costs (hourly compensation) in the clothing industry in selected countries (US$/hour, 2002)
Bangladesh 0.39, China 0.68-0.88, Egypt 0.77, India 0.38, Kenya 0.38, Madagascar 0.33, Mauritius 1.25, Mexico 2.45, South Africa 1.38, Sri Lanka 0.48 Source: Economist Intelligence Unit (2004)
Country Hourly Wage
United States $8.25-14.00 , United Kingdom $7.58-9.11, Venezeula $2.73 , Costa Rica $2.19 , Guatemala $1.21 , Colombia $1.20 , Honduras $1.02 , Philippines $0.94-1.00 , China $0.93 , Peru $0.92 , El Salvador $0.92 , Jordan $0.74 , Malaysia $0.73 , Nicaragua $0.65 , Bahrain $0.57 , Thailand $0.56 , India $0.55-0.68 , Mauritius $0.55-0.65 , Vietnam $0.52 , Egypt $0.50-0.87 , Mexico $0.50-0.53 ,
Sri Lanka $0.46 , Pakistan $0.37 , Indonesia $0.35 , Cambodia $0.24 , Bangladesh $0.21
Reference: Institute for Global Labour and Human Rights, 19 August 2010
South Africa: New wage -reflecting the entry-level wages 1 Sept 2011.
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