Don’t destroy ‘sweatshops’
Next week five Newcastle clothing firms are taking the labour minister and the National Bargaining Council for the Clothing Manufacturing Industry to court.
At stake is the survival of 450 firms employing 16 700 workers currently in the process of being closed down by the council for failing to pay the legislated minimum wage.
The five applicants are so-called Chinese producers, in that they came from Taiwan, Hong Kong or China and form part of Newcastle’s Chinese community.
Originally recruited by the municipality in the 1980s and 1990s to create jobs, Chinese producers brought the skills and networks needed to operate at the labour-intensive end of the clothing industry.
Most of them now produce basic clothing for middle- and low-income consumers – in competition with imports from low-wage countries.
When minimum wages were first extended by the Wage Board in 1991, many Newcastle firms ignored it and by 1995 the SA Clothing and Textile Workers’ Union (Sactwu) had more than 30 labour disputes with them.
Ebrahim Patel, then general secretary of Sactwu, was unsympathetic, announcing he would eat these “fly-by-nights” for breakfast.
As minister of economic development, he later made support for state incentives and upgrading initiatives conditional on compliance with minimum wages.
There is simply no place in this approach for low-wage, labour-intensive production and the bargaining council is actively destroying it.
This will exacerbate South Africa’s unemployment crisis and is already doing so in Newcastle.
Conditions in the bottom end of the clothing industry are tough, to be sure, and the workforce does bear most of the strain.
Sactwu is committed to ending sweatshop conditions in Newcastle and to narrowing wage differentials (to 20%) between metro and non-metro areas.
Since the National Bargaining Council for the Clothing Manufacturing Industry was created in 2002, minimum wages in Newcastle have risen from half to two-thirds of the level in Cape Town.
The Newcastle Chinese, however, feel betrayed by the transformed labour environment, by what they perceive to be racist slurs and by the demonising of their methods.
Some do impose hierarchical and harsh conditions on workers, and many fail to comply with the Basic Conditions of Employment Act. But the situation defies stereotyping.
Supporters of the council argue low-wage firms in places like Newcastle outcompete the higher-wage firms offering decent jobs in places like Cape Town.
But high-wage metro firms have survived because they compete in different markets.
Destroying low-wage firms in Newcastle will only benefit their competitors in China and Lesotho, and result in higher clothing prices for the poor.
» Nattrass is a professor of economics at the University of Cape Town