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Wage Increases Continue in Low Cost Sourcing Countries

Global Sourcing Minimum Wage Increases 2013 Core Solutions Global Sourcing Update

Traditional low-cost sourcing countries are becoming more expensive

Most major sourcing countries have seen significant minimum wage increases over the past year and this trend is expected to continue. Where no increase incurred, in places such as Indonesia and Bangladesh, unrest continues. Below is a brief update.

Bangladesh: The minimum monthly wage in Bangladesh stands at around $38. One of the largest buyers of Bangladesh textiles, H&M had urged for wage increases in 2012, to no effect, despite increased despite inflation. Periodic unrest continues

Brazil: Brazil raised its minimum monthly wage to 675 Reals or US. $326 in January, an increase of 8% from the 2012 rate.

China: According to China’s Ministry of Human Resources and Social Security, 23 regions across the country increased wage levels in 2012. In 2013, Shenzhen will have the highest minimum wages, at RMB 1,500, followed by Zhejiang at RMB 1,470 and Shanghai at RMB 1,450.

India: Wages increased in many regions in India, such as Delhi which saw a 5% increase to Rs 7,020 (US $130) for unskilled, Rs, 7,748 ($144) for semi-skilled and Rs 8,528 (US $158) for skilled labour. Set by each province, minimum wages vary greatly in India, but the trend of increases continues.

Indonesia: A 44% minimum wage increase for workers in Jakarta, to 2.2 million Rupiah (US $ 228) was approved in December 2012, however it has been delayed and protests continue.

Malaysia: Malaysia pledged to bring in a minimum wage of US $300 per month, which will give some 3 million workers an increase averaging 5%.

South Africa: The South African Clothing and Textile Worker’s Union negotiated a 6.76% wage increase in late 2012.

Thailand: Credit Suisse forecasted that wages in Thailand would rise by 10% in 2013 following a 12% increases in 2013.

Turkey: The minimum wage increase by 4.1% to 774 liras or US $441 in the first half of 2013 and will rise to 804.70 liras (US 456) by July.

Vietnam: The Vietnamese prime minister signed a decree on December 4 raising the minimum wage for laborers by 16 to 18 percent, to anywhere between 1.65 million to 2.35 million dong ($79-$113) per month.

 

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