Textile units in Tirupur, the town in Tamil Nadu known as the industry’s export hub, have raised employee wages by 3% effective 1 January even as they battle slowing demand in key markets. A garment stitching factory in Tirupur. The export hub has about 350,000 workers in some 6,000 units. The textile industry’s troubles have been aggravated by a power crisis that has pushed up costs. The raise is part of an agreement signed in December 2006 between industry lobby Tirupur Exporters’ Association, or TEA, and five trade unions.
“We are honouring our commitment,” said A. Sakthivel, president of TEA. “It is a four-year agreement; in the first year, there was a hike of 10%, second year, 4%, for the third and fourth years, 3% each.” Tirupur has about 350,000 workers in some 6,000 units engaged in knitting, dyeing, garment making, printing, embroidery and other related work. Exports fell to Rs9,950 crore in 2007-08 from Rs11,000 crore in the previous year, and are expected to be hit by recession in key Western markets this fiscal.
According to Sakthivel, export orders may shrink by 20% from January-end onwards. The industry’s troubles have been aggravated by a power crisis that has pushed up costs and reduced productivity. “We have to give the hike since we have agreed to it earlier. It is not that only the textile industry has been hurt; all the industries have been affected. New orders may be slightly lesser but the wage hike will not affect the margins that much,” said S. Duraisamy, promoter and chief executive of Prem Group of Companies, which is engaged in making cotton-knitted garments. The wage increase will apply to the entire textile industry workforce of Tirupur.
Workers at textile units that have no union may not be paid the increased wage unless the workers demand a hike, said K. Ramakrishnan, a leader of the Labour Progressive Force, one of the unions. “If we are requested to step in, we will help them get their hikes,” he said. Workers engaged in cutting, tailoring, ironing and packing get paid the highest in the textile industry, and their basic salary after the hike would be Rs113.96 per shift of 8 hours, while their overall wage, including allowances, would work out to Rs175.24.
A Tirupur-based non-governmental organization called Social Awareness and Voluntary Education, which is studying the impact of the global economic slowdown and the power crisis situation on the Tirupur industry, says the increase doesn’t cover the cost of living. “The wage hike is very meagre compared to the increase in living expenses in the area. We have been critical of this agreement since it was signed,” said A. Aloyisus, director of the group.