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JOHANNESBURG — As South African president Jacob Zuma visited China last month to court investors to his country, Chinese companies were closing 85 apparel factories they own in Newcastle in the province KwaZulu-Natal because of a wage dispute. The factories employ about 8,000 workers who produce an estimated three million garments a month.
Zuma is under fire because his three-day trade mission coincided with a strike by an estimated 1.3 million South African civil servants — nurses, health and education workers and police — who are demanding higher pay. Workers are seeking an 8.6 percent boost.
South Africa’s National Bargaining Council recently instituted a drive for clothing manufacturers to raise minimum weekly wage levels to 324 rand, or about $45 at current exchange. The factory owners, represented by the Newcastle Chinese Chamber of Commerce, contend they cannot afford the increase. Efforts to resolve the issue in the last year have failed.
Alex Liu, chairman of the Newcastle Chinese Chamber of Commerce, said the lowest paid workers earn 250 rand, or $34 a week, and the highest paid get 500 rand, or $69. He said it was impossible to pay the minimum wage being sought “because we are competing with imports from China and the price from our customers will not sustain us.”
The South African Clothing & Textile Workers’ Union has sued the factory owners, arguing the closures are illegal.
The union and factory owners have called on the government to intervene and union general secretary Andre Kriel has written to Michael Mabuyakhulu, provincial minister for economic development. The union “is very concerned about this state of affairs and its impact on the creation and protection of jobs in the KZN province and nationally,” he said.
“The clothing, textile, leather and footwear industry is a vulnerable sector needing special support measures and, given its labor-intensive nature, steps must be taken to secure its future sustainability and growth,” Kriel said.
The closures come as manufacturers and retailers gear up for the holiday shopping season. Michael Lawrence, executive director of the National Clothing Retail Federation, said the dispute sends the message that there is an increasing lack of confidence in the local manufacturing industry.
“This means that local retailers will have difficulty trusting South African-based manufacturers and could seek other sources of production offshore,” Lawrence said.