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Wage Strategies and Minimum Wages in Decentralized Regions: the Case of the Clothing Industry in Phuthaditjhaba, South Africa

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  • Nicoli Nattrass

Abstract

During the apartheid era, many South Africans were forcibly relocated to ‘bantustans’ and other decentralized regions with little economic basis. The only manufacturing employment was provided by industries attracted to the areas by selective incentives and low wages. After the transition to democracy, the remaining incentives were removed and minimum wages were extended to these (previously exempt) areas. This study of workers and managers in the clothing industry in Phuthaditjhaba, the old capital of the QwaQwa homeland, indicates that such developments may exacerbate unemployment and poverty in the region. Taiwanese export‐oriented firms (the largest employers) are most threatened by the changes as they prefer to pay new employees low wages, and then increase them in line with experience and productivity. Falling employment will translate directly into rising poverty as very little welfare support is available for the unemployed in South Africa. Given that people (whether employed or unemployed) consistently rank increases in employment over wage increases, this suggests that minimum wage determination should be particularly sensitive to local conditions and potential employment losses. Pendant le règne de l'apartheid, de nombreux Sud‐Africains ont été réimplantés de force dans les ‘bantoustans’ ou autres régions décentralisées à faible base économique. Le seul emploi industriel provenait des secteurs attirés dans ces zones par des mesures d'incitation et des salaires avantageux. Après la transition vers la démocratie, les dernières primes ont été supprimées et les salaires minimum étendus à ces régions (jusque lá dispensées). Cette étude des ouvriers et cadres du secteur de l'habillement à Phuthaditjhaba, ancienne capitale du QwaQwa, indique que ces changements sont susceptibles d'aggraver chômage et pauvreté au plan local. Les exportateurs taïwanais (les plus gros employeurs) sont les plus menacés puisqu'ils préfèrent payer peu les nouveaux embauchés, puis les augmenter en fonction de l'expérience et de la productivité. Une chute de l'emploi se traduirait directement par une accentuation de la pauvreté, les chômeurs bénéficiant d'une aide tès limitée en Afrique du Sud. Étant donné que les gens (qu'ils aient un travail ou non) classent systématiquement la progression de l'emploi avant celle des salaires, on peut en déduire que le minimum salarial devrait varier très sensiblement selon le contexte local et les pertes d'emploi potentielles.

Suggested Citation

  • Nicoli Nattrass, 2000. "Wage Strategies and Minimum Wages in Decentralized Regions: the Case of the Clothing Industry in Phuthaditjhaba, South Africa," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 24(4), pages 873-888, December.
  • Handle: RePEc:bla:ijurrs:v:24:y:2000:i:4:p:873-888
    DOI: 10.1111/1468-2427.00284
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