Clothes factories threaten closure

According to Edward West from the Business Day (Clothes factories threaten closure, Mar. 30, 2011), “The national bargaining council for the clothing industry says it will take legal action against manufacturers that have not complied with Friday’s deadline to pay 70% of minimum wage levels to employees”. Meanwhile employers in KZN have indicated that they have no intention of complying with the regulations.

If the 471 small factories that are currently on the verge of closure are forced to do so it could jeopardise the jobs of approximately 18,000 clothing and textile workers. But when one considers that roughly half (48.4%) of the population in the Newcastle area are unemployed; it demonstrates the desperate plight of these individuals to retain their jobs. The workers have indicated that whilst they would like to earn higher wages, they could not contemplate losing their jobs due to the high rate of unemployment in the area. Their circumstances are stark and their alternatives are bleak, but no less certain. Their options are to work and gain some experience or face the miserable alternative of being unemployed.

Author: Jasson Urbach is an economist with the Free Market Foundation.

FMF Policy Bulletin/ 29 March 2011