PB 14/32 - Job Destruction and Minimum Wage-Setting in the South African Clothing Industry
Nicoli Nattrass & Jeremy Seekings
Date of Publication:
Abstract: Employment in the South African clothing sector has been on a strong trend decline, collapsing by almost 50% between 2002 and 2010 (Nattrass and Seekings 2012). Part of the reason is increased international competition, a product of trade liberalisation in the late 1990s, exchange rate appreciation in 2003 and the dramatic growth of Chinese clothing exports after 2004. But minimum wage setting has also played an important role in the destruction of jobs. The case of the clothing industry suggests that South Africa needs a more differentiated approach to wagesetting that enforces basic standards of employment but tolerates lower-wage employment in specific areas, especially if low basic wages can be supplemented with productivity-linked pay.
View Policy Brief: DPRU PB 14/32