Labour Shortage : A Global Problem

According to a recent study conducted by Assocham – involving HR heads of nearly 100 textile firms across the country – the country is facing acute shortage of labor force limiting the textile units to use only 50 to 60% of their total production capacity. It is posing a great challenge to mill owners some of whom are even thinking of shifting their production plants to rural areas where they hope to get the required labour at a lower cost.

The textile and clothing industry in India employs about 35 million heads which has to grow to at least 47 million in order to keep pace with the opportunities available and to effectively compete with countries like Bangladesh, Sri Lanka, Vietnam, Cambodia, Indonesia and China.According to Assocham, most textile workers get a salary of about Rs. 7,000 a month. These workers are of migratory nature who move from the agricultural sector to textile cities after the sowing season for half of the year and get back to villages when the harvest season starts adversely impacting the production levels of mills where they are employed.The shortage of workers from villages is also attributed to the effect of government’s successful social sector schemes like the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) which guarantees rural folks100 days of wage employment in a financial year. This is discouraging labor migration from rural to urban areas. It has been observed that the acute shortage of labor is prevalent in all segments of textile value chain  beginning from cotton crop to branding and retailing.

However, this problem is not unique to India. Almost all growing economies are adversely affected by the shortage of labor as well as increasing labor costs. The Vietnam Textile Association aims to achieve an export target of $13 billion but is worried about a likely shortage of workers this year. Their story is similar. Workers from rural areas have to move to cities where textile plants are located, but due to the rising prices of almost all goods and services, they find this unaffordable and choose to stay back and look for other jobs.

China has still a bigger problem because the majority of its 150 million internal migrant workers are from farming families. While the first generations of migrants were content to toil in factories for relatively low wages that were still higher than those their parents could have earned back home, the current crop of young workers is not so eager. The younger generation wants to see the world, make friends and learn things. If they want to stay in the Pearl River Delta, they need to think about marriage and their future, and they can’t keep doing these simple jobs indefinitely, argue experts who track the labor movement. Thousands of factories have closed in China due labor related issues.

The current labor shortage, unlike in the past, appears difficult to resolve due to quality-of-life concerns and other social and economic reasons unless the industry, with the active support of the government, addresses this issue on a war footing by implementing labor friendly CSR, decent wages and global work culture with the matching environment. Remember, workers on the shop floor cannot be neglected any more.

Managing Editor

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