JOB DESTRUCTION IN THE SOUTH AFRICAN CLOTHING INDUSTRY: How an alliance of organised labour, the state and some firms, is undermining labour-intensive growth
Today, five small Chinese firms in Newcastle, a low wage region in KZN, are in court to challenge the Minister of Labour and the National Bargaining Council for the Clothing Manufacturing Industry (NBC) on their right to extend minimum wage agreements agreed by NBC parties to non-parties. At stake is the survival of 450 firms nationwide, employing around 16 700 workers.
The NBC, which is backed by the South African Clothing and Textile Workers Union (Sactwu) and one of the key employer bodies in the industry, has closed down and attached the assets of companies that do not comply with the terms of agreements reached at the NBC if these are extended by the Minister of Labour, potentially putting thousands of people out of work.
To coincide with this landmark case, the Centre for Development and Enterprise is releasing a new report by Professors Nicoli Nattrass and Jeremy Seekings of the University of Cape Town. The CDE publication, JOB DESTRUCTION IN THE SOUTH AFRICAN CLOTHING INDUSTRY: How an alliance of organised labour, the state and some firms, is undermining labour-intensive jobs, chronicles the events that have led to the Pietermaritzburg High Court and why the future of South Africa's low-wage manufacturing industry, depends on its successful outcome (see here - PDF).
"The struggle of the Newcastle clothing producers to remain in business is symptomatic of the difficulties involved in promoting labour-intensive growth in South Africa," says the CDE.
According to Ann Bernstein, executive director of CDE: "This report is a stark indictment of the current approach to collective bargaining and the government's exclusive high-wage, high-tech strategy that ignores the reality of millions of South African work-seekers with little or no skill who desperately need jobs. If the country is serious about increasing employment, we must stop destroying jobs and deal with the contradictions in current policy.