Document: The Dilemma of Job Creation and Decent Work

In August 2010 South African government officials began closing down clothing and textile factories in Newcastle, in the province of KwaZulu–Natal. This came in the face of angry protests from the workers because the owners were paying less than the statutory minimum wage of R324 ($49) a week. The factory owners said they could not pay more and survive in the face of cheap Chinese textile imports.

Globally, the clothing and textile industry is to a large ex-tent controlled by an oligopolistic group of large retailers and branded manufacturers, who stipulate their supply specifications in terms of low price, high quality and short lead times. But due to the strengthening of the local cur-rency (the rand) since 2003, the end of the Multifibre Agreement (MFA) in 2004 and relatively high labour costs, South Africa no longer has a comparative advantage in an integrated global economy.