In August 2010, government officials began closing down clothing and textile factories in Newcastle, in the KwaZulu-Natal Midlands, in the face of angry protests from the workers because the owners were paying less than the statutory minimum wage of R324 a week. Dudu Mabaso, who works in one of these factories, said that as much as she wanted conditions to change at her company, closing down was not an option. ‘People will revolt against closure. It's their source of survival and working for these textile companies is the only way to survive. The wages are low at R250 per week but they are better than nothing.’ (Olifant, 2010:10). The factory owners said that they could not pay more, and survive, in the face of cheap Chinese textile imports. As Alex Liu, chairman of the Newcastle Chinese Chamber of Commerce, asserted, ‘It is impossible for us to pay the minimum wage because we are competing with imports from China and the cut, make and trim price from our customers will not sustain us if we paid the minimum wage of R324 a week’ (Khanyile, 2010a: 3).
South Africa has a sophisticated collective bargaining and dispute resolution system, and by December 2010 agreement had been reached between the South African Clothing and Textile Workers’ Union (Sactwu) and employers’ organisations that manufacturers paying less than minimum wages would have until 2012 to get their houses in order. Manufacturers were granted a further sixteen-month extension in which to resolve their noncompliant status. They would have to be at least seventy per cent compliant by the end of March 2011, with further phase-ins over the following thirteen months, culminating in full compliance by the end of April 2012 (Khanyile, 2010b:1). By the end of March 2011, fifty-nine per cent of the inspected factories were complying with the target of paying seventy per cent of the minimum wage, effective from April (Khanyile 2011).
But from the employers’ point of view this was a reluctant agreement. ‘Our view remains,’ commented Johann Baard, director of the Apparel Manufacturers’ Association (Amsa), ‘that many noncompliant factories, and currently compliant factories, cannot afford the current wage structure’ (Marais, Sunday Times, 2011). Renato Palmi, director of the Redress Consultancy, described the agreement as ‘upsetting and worrying’.