TEXTILE workers have threatened to go on strike over wages.
They want the government to review the minimum wage from M900 to M1 500.
This, they argue, is a compromise because they initially wanted M2 020.
Their demands are certainly justified. The prices of basic commodities have steadily increased over the past 12 months.
There has also been a spike in rent, fuel and education costs.
Surely an increase of just below M70 on their salaries won’t make much difference.
There is no doubt that given the price increases over the past 12 months most textile workers are actually worse off than they were last year.
It is obvious that almost all textile workers are not coping with these increases.
In fact, they have never coped because their salaries have always been low. They have always lived from hand-to-mouth.
It is therefore clear that they certainly need better salaries.
But the problem is that their employers have already said they cannot afford to pay M1 500.
When there is a wage dispute between the employer and employee the temptation is to blame the employer for being tightfisted.
We can see that the same is about to happen in the deadlock in the textile industry. There will probably be a strike and fingers will be pointed at the employers for being stingy.
The problem with this approach is that it does not consider the challenges that employers are facing.
The textile industry in Lesotho is already in dire straits.
The global financial crisis has reduced orders from the United States, the biggest market for Lesotho’s textile products.
Volumes have been low and margins thin.
Fabric prices have galloped while the prices buyers demand have remained largely unchanged.
In the textile industry the buyers normally decide what price they want to pay.
If the textile firms in Lesotho cannot do the job at the required price, the buyers will take their contracts to Bangladesh, China, Indonesia, Vietnam, Cambodia and other Asian countries.
It is important to note that Lesotho is already considered an expensive place in which to operate a textile factory.
In Bangladesh, for instance, the minimum wage in the textile industry is M361 (US$43).
In Cambodia the minimum wage is M512 (US$61) while in China it is pegged at around M840 (US$100).
The recent increase puts Lesotho’s minimum wage at M900 (US$104).
If the unions are granted their wish the lowest paid textile worker in this country will earn M1 500 (US$175).
That will be good for the workers but disastrous for the textile firms which are already under pressure.
Many textile firms are likely to pack their bags and move to cheaper countries.
What makes Lesotho’s situation particularly worse is that apart from having lower labour costs most Asian countries also offer huge incentives to investors in the textile industry.
They have the financial muscle that little Lesotho lacks.
All these mean that the future of the textile industry in Lesotho is bleak. Recent trends indicate that there is steady disinvestment in the textile sector.
There has not been a major investor in the textile industry over the past five years. Instead, investors have been fleeing Lesotho.
At its peak in 2000 the textile sector employed just over 42 000 people but now that number has come down to around 35 000.
Managers in the sector say more jobs are likely to be shed in the next few months unless orders from the US improve.
But as the US’ economic recovery remains sluggish it is highly unlikely that there will be an avalanche of orders to Lesotho anytime soon.
The labour unions must therefore be careful what they ask for.
They might arm-twist the employers to pay M1 500 but then see more of their members being empted onto the streets.
Granted the current wages in the sector are low but any improvements must take into account other dynamics.
There is a difference between what the employees believe their sweat is worth and what the employers can afford.
To have jobs you need employers. Employers are scarce.
The unions might succeed in bullying employers into submitting to their demands but they might not be prepared for the backlash when employers start leaving Lesotho in droves.
They say they have already compromised but they might have to swallow their pride if they want their people to remain in jobs.