Rising wages in China, workers’ protests in Cambodia and
collapsing factories in Bangladesh means the sweatshops are switching to
Africa.
China has already lost its appeal as cheap garment producing
country – with current wages at around $500 a month in major industrial hubs
along the country’s coast and $250 in the interior, and foreign apparel
retailers have turned to factories in Bangladesh and Cambodia in recent years. Bangladesh’s
textile sector has grown to a $25bn industry that employs 4.4mn people, and
Cambodia`s grew to $5.5bn with more than 650,000 factory jobs. But workers in
these cheapest garment production countries are increasingly agitating for
better pay. Bangladesh last year raised the minimum wage for the country’s
garment workers by 77% to $68 a month following serious labour disputes. In
Cambodia, the labour ministry in November 2014 set the new monthly minimum wage
for the country’s garment workers at $128, up from some $75 a month just a few
years back and now almost double than in Bangladesh. Higher wages are squeezing
the profits of local textile production companies.
Now the garments industry have already found alternatives to
Asia as a production hub. H&M, together with Tesco and Primark, have begun
sourcing clothes from Ethiopia, an African country without industrial minimum
wages where unskilled garment workers receive$35 to $40 a month, clearly
undercutting labour costs in Bangladesh. Foreign textile investors are highly
welcomed and benefit from an abundance of cheap labour – with urban
unemployment rates close to 20% –, cheap energy and locally produced cotton.
In Kenya, the textile
industry is also expanding. Monthly salaries there are at around $120, but the
government is trying to lure manufacturers with generous incentives plus African
countries have duty-free access to the US textile market under a special trade
agreement signed in 2000.
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