A NOVEL wage agreement for South African textile workers will lower salaries for new hires by 30%, in a bid to save the industry from cheaper Chinese competition.
The deal is being watched by other industries in a nation where unemployment is mired around 25%. According to unofficial estimates, using a broader definition, it is as high as 40%.
President Jacob Zuma has promised to create 5million jobs by 2020, and his government has already indicated that lower wages could be needed to reach that goal.
Under the deal, the Southern African Clothing and Textile Workers' Union agreed that new hires will be paid a minimum R427 a week, about 30% less than current levels.
In exchange, employers have promised to create 5000 new jobs within three years.
"This is not an unreasonable intervention in a country like ours," André Kriel, the union's general secretary, said.
Employers will not be allowed to sack existing workers in order to replace with lower-paid new hires, he said.
South Africa's textile industry is already battered, shedding half its jobs over the last decade.
Some textile mills have already moved to cheaper neighbouring countries like Lesotho, and others have threatened to follow suit, particularly in eastern KwaZulu-Natal.
South Africa shed nearly 400000 jobs last year, despite an economic boost from hosting the soccer World Cup.
For textiles, South Africa has been swamped by cheaper Chinese imports, which accounted for 86% of the market in 2004, before quotas were scrapped.
South Africa's own clothing exports have tumbled, especially to the US, dragged down by a strong rand and then the economic crisis in 2008.
Aside from costs, South Africa has a problem with production capacity, which has dropped as businesses have folded.
South Africa's labour force also compares poorly with other countries. In the World Economic Forum's Global Competitiveness rankings, the country stands at 95th for labour efficiency.
The same report puts South Africa's labour practices as among the most rigid in the world, while putting labour-employer relations as among the worst on the planet.
Low wage deal aims to save textile jobs
A NOVEL wage agreement for South African textile workers will lower salaries for new hires by 30%, in a bid to save the industry from cheaper Chinese competition.
The deal is being watched by other industries in a nation where unemployment is mired around 25%. According to unofficial estimates, using a broader definition, it is as high as 40%.
President Jacob Zuma has promised to create 5million jobs by 2020, and his government has already indicated that lower wages could be needed to reach that goal.
Under the deal, the Southern African Clothing and Textile Workers' Union agreed that new hires will be paid a minimum R427 a week, about 30% less than current levels.
In exchange, employers have promised to create 5000 new jobs within three years.
"This is not an unreasonable intervention in a country like ours," André Kriel, the union's general secretary, said.
Employers will not be allowed to sack existing workers in order to replace with lower-paid new hires, he said.
South Africa's textile industry is already battered, shedding half its jobs over the last decade.
Some textile mills have already moved to cheaper neighbouring countries like Lesotho, and others have threatened to follow suit, particularly in eastern KwaZulu-Natal.
South Africa shed nearly 400000 jobs last year, despite an economic boost from hosting the soccer World Cup.
For textiles, South Africa has been swamped by cheaper Chinese imports, which accounted for 86% of the market in 2004, before quotas were scrapped.
South Africa's own clothing exports have tumbled, especially to the US, dragged down by a strong rand and then the economic crisis in 2008.
Aside from costs, South Africa has a problem with production capacity, which has dropped as businesses have folded.
South Africa's labour force also compares poorly with other countries. In the World Economic Forum's Global Competitiveness rankings, the country stands at 95th for labour efficiency.
The same report puts South Africa's labour practices as among the most rigid in the world, while putting labour-employer relations as among the worst on the planet.
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