Labor is easily the largest input cost in the sourcing sector, and as workers, unions and some forward-thinking retailers increasingly seek living wages for labor, production costs have increased and margins continue to get squeezed.
This year was less like last, with fewer countries raising their wages after the steep and fairly steady increases seen in the last couple years.
With chasing cheap becoming less and less the sole way to do business, brands and retailers are faced with increasing efficiency and improving productivity to keep costs manageable and business afloat.
Here’s a look at which countries watched wages increase in 2016.
The Living Wage Foundation raised the rate of pay for workers in the U.K. to ensure they earn what’s actually necessary for life in the country.
In October, the foundation announced that the U.K. living wage rate would increase 2.4% to 8.45 pounds ($10.34) an hour, in keeping with the higher cost of living, and the London rate jumps 3.7% to 9.75 pounds ($11.93) per hour.
This living wage is a voluntary one—companies aren’t required to pay it. And though it’s quite a bit higher than the government-mandated 7.20 pounds ($8.81) per hour for workers over age 25, many companies are opting to pay it.
Continuing the upward labor cost trajectory, Cambodia is set to raise its minimum wage for garment workers again.
Cambodia’s Ministry of Labor and Vocational Training said in a September statement that it would raise the minimum wage for clothing and footwear workers in the country to $153 a month starting at the beginning of next year, the Associated Press reported.
The 9.2% increase follows last year’s 9.4% jump that saw wages go from $128 to the current $140, though it falls short of the $171 workers were looking for in 2017.
Vietnamese workers will see a 7.3% increase to the minimum wage starting in 2017, Thanhnien News reported.
The increase amounts to 180,000-250,000 Vietnamese dong ($8-$11) more a month depending on the region. The current average monthly wage ranges from 2.4 million to 3.5 million dong ($108-$157), which, according to local labor unions, still only covers 80 percent of workers’ basic needs.
India – Tamil Nadu
Thousands of garment workers in Tamil Nadu got some good news in July.
The Madras High Court, which is the highest court in the Indian state of Tamil Nadu, ordered that garment worker monthly wages be raised from $67 to $97. The 30 percent increase, with immediate effect, is the first minimum wage hike in more than 12 years.
“It is a huge victory in a long drawn (out) battle to get workers their due,” Sujata Mody of Penn Thozhilalargal Sangam, a women’s workers’ union, said. “Workers have been living in impoverished conditions with inflation and prices on the up.”
South African cotton textile workers have scored another pay raise victory.
As many as 4,630 workers from 70 woven cotton textile factories across the country saw their pay increase 8.25% backdated to July 1, 2016, a rate that’s higher than the current rate of inflation (which hovered around 6 percent this year).
Negotiations were fairly quiet and quick to be resolved in contrast to last year when members of the Southern African Clothing and Textile Workers’ Union (SACTWU) went on strike for three weeks demanding better pay. The strike helped secure workers an 8.5% pay increase in 2015.
How Amazon may strip Whole Foods of its touchy-feely ethos—and why that's a good thing—had how cold brew proves you can teach old dogs new tricks.Read more
Loftex Home and GHCL sign CertainT licences, Hollander Sleep Products Buys Pacific Coast Feather and Oeko-Tex certifies Tuft & Needle.Read more
The National Retail Federation continues to lobby Congress with regards to the border adjustment tax, reiterating its claim that it would shift corporate tax savings to consumers.Read more
NRF announced new board members this week, while Topshop hired a new CEO and Macy's stepped up its off-price game with a new executive.Read more
Fashion can’t escape what’s happening in the world whether it wants to or not, and for the Autumn/Winter 2018-19 season, textiles will look to balance all that’s been upended.Read more
The Chittagong Port Authority has taken steps to alleviate the congestion situation at Bangladesh’s top port, but no comprehensive plan is in the works to fix what has been a long-term logistical problem.Read more
Looking to boost cotton quality and exports, Egypt’s Ministry of Trade and Industry has signed a cooperation protocol with United Nations Industrial Development Organization (UNIDO) and the Italian Development Cooperation.Read more