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January 2, 2019

Tunisia garment sector prepares for 7% wage hike

The Tunisian Textile and Garment Federation (FTTH) has signed final papers agreeing a process of salary increases over the next two years with the country’s National Labour Union (UGTT).

The move, set out on 20 December, gives textile and garment industry managers the chance to encourage productivity by giving their workers financial stability, as well as improving international market confidence in Tunisia’s social responsibility. 

The president of the FTTH (La Fédération Tunisienne du Textile et de l’Habillement), Hosni Boufaden, told just-style: “Salaries in the industry will increase by 7% for each year until 25 December 2020, applicable to the gross salary.” The increase is for all clothing and textile industry workers from the most junior to production managers.

According to the re:source by just-style sourcing tool, garment worker wages in Tunisia range from US$158-183 per month

This could be regarded as a bold step when the country is suffering a tough economic crisis. At the end of 2017, GDP in Tunisia was at a 10-year low at US$40.26bn, with inflation hitting 7.8% in August – and according to data service Trading Economics will settle around 7.2% in the last quarter of 2018.

But it could also be regarded as good common sense, given 2018 saw a pay freeze, hardly surprising after the hugely unpopular Financial Act of 2017 was passed in December that year to appease International Monetary Fund (IMF) demands, sparking widespread demonstrations throughout December and January with many violent clashes.

Food, petrol, data and transport costs have risen sharply, causing many Tunisians to struggle.  The Tunisian dinar has also suffered in the past 12 months, falling from TND2.92 to EUR1 in December 2017 to TND3.34 in December 2018, making manufacturing more expensive due to the cost of imports as well as rises in fuel and energy costs.

So, guaranteeing pay rises may help preserve industrial peace in a clothing and textile sector that has been suffering, explains Boufaden. “From 2011- 2016, the textile industry was very bad in Tunisia. We lost 400 companies and 40,000 jobs.”

He cites the lack of effective promotion of the industry by government agencies, and government institutions being ineffective due to heavy bureaucracy. In response, industry leaders collectively decided to take charge of the industry’s development and promotion, setting up the FTTH in 2016. This has given members greater autonomy over how the sector develops and is marketed, and means they are better able to negotiate labour standards including pay rates and increases.  

“Before the revolution [of 2011] government asked the private sector to enhance salaries in line with inflation” – but since the revolution things have changed. “We are more democratic now and the industry is no longer legally obliged to create pay increases,” says Boufaden, adding that the federation is prepared to take social responsibility seriously and look after its workers.

“The social solution for our workers is buying capacity. We agreed to give a 7% increase in the basic wage to give stability to our industry and ensure productivity. Also, we want to give a strong message to our customers – particularly in Europe – to confirm stability and that we are serious about social responsibility in Tunisia.”

He adds: “800 [out of 1,062 Tunisian textile and clothing] companies belong to the FTTH. And in order to join, companies have to sign a 12 point charter, two points of which concern social responsibility.”

He believes the future for the country’s industry is brightening, with trade missions exploring new markets, including to the UK. Turnover for the sector as a whole has risen 3% on 2017 to EUR3bn (EUR2.3bn in export and EUR700m in the domestic market).

Tunisia is one of the top ten suppliers to the EU’s garment industry, with its apparel exports enjoying duty free access to the European Union through Euro-Mediterranean Economic Partnership Agreement.

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