MASERU — At least 300 South African textile firms have threatened to relocate to Lesotho in protest over plans to significantly hike the minimum wage for workers.
The companies have already said they could relocate to either Lesotho or Swaziland if the government insists on hiking the minimum wage for textile workers.
“Members of the Newcastle Chinese Chamber of Commerce have threatened to retrench unskilled workers, shut down factories and relocate to Swaziland and Lesotho if a resolution to force clothing factories to comply with the minimum wage within 16 months was implemented,” said a report in Business Report, a business section for newspapers published by South Africa’s Independent Group.
Alex Liu, the chairman of the Newcastle Chinese Chamber of Commerce, told the Business Report that the minimum wage, which was expected to increase to R336 a week by the end of March before rising to R465 by the end of the year and then topping R516 by April next year, was not sustainable for members of the chamber.
“If you look at the resolution, it is different to our proposal,” he said.
“We proposed to the (bargaining council) that they should lower the entry wage to accommodate more workers and to allow the operator to operate.”
Three months ago, the chamber proposed that a general worker be paid R220 a week in rural areas and R300 in metro areas.
A qualified machinist from a non-metro area would earn R280 a week, while the metro-based counterpart would take home R450, the chamber said.
In terms of the agreements at the National Bargaining Council for the Clothing Manufacturing Industry the current minimum weekly wage for a qualified machinist working in a city is R740 and in a town it is between R451 and R522.
Liu told the Business Report on Thursday that the Newcastle Chinese Chamber of Commerce did not agree with the council resolution for minimum wages.
The companies are attracted to Lesotho because of its low minimum wage for the textile industry.
The lowest paid textile worker in Lesotho gets M760 per month.
Last year wages in the sector were increased by as little as two percent after textile companies pleaded poverty.
The companies are also attracted to Lesotho because its labour movement is less militant.
The fact that Lesotho’s government is willing to accommodate the textile industry’s pleas for lower minimum wages only makes Lesotho a preferred destination for factories seeking a cheaper operating environment.
With over 37 000 people on the payroll the textile industry is the biggest private sector employer in the country.
Only the government employs more people than the sector.
The government of Lesotho is desperate to reduce the 45 percent unemployment rate.
The Lesotho National Development Corporation (LNDC)’s information manager Lesa Makoalibe told the Sunday Express that no South African textile firm had expressed interest in relocating to Lesotho.
“No one has approached us about relocating their firms to our country. But we would accept investors to improve our economy,” Makhoalibe said.
But trade unions are not impressed.
“We do not appreciate investors who relocate to our country because they cannot follow the laws in their host countries. If trade unions in Lesotho had a say over who can invest in Lesotho, such factories would not be allowed,” said Daniel Maraisane, the secretary general of the Lesotho Clothing and Allied Workers Union.
“The factories are relocating to Lesotho because they don’t want to pay reasonable salaries. They are not the kind of investors we want,” he said.
“It would be wrong if our government allows such companies to invest in our country when we are still negotiating better salaries for factory workers,” said Factory Workers Union’s boss Macaefa Billy.
The companies would only be coming to Lesotho for cheap labour, Billy said.