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Coming into force on January 1, theincrease in the legal minimum wage of 5% in non-agricultural and agricultural activities sets the minimum hourly wage in non-agricultural activities at 17.1 dirhams, from the start of the current month.
What about its application in the textile sectore which counts, according to the latest figures, a few 235,000 employeesthe equivalent of 24% of industrial employment in Morocco?
“The increase in the SMIG has automatically entered the sector. Some companies respect the application of the increase, others no. Failure to comply with the application of the increase in the SMIG unfortunately creates a distortion of competition“, observes Hammani Amahzoune, president of the Moroccan Association of Textile and Clothing Industries (AMITH) for the Rabat region.
The textile sector does not live outside the law. If there are operators who live outside the law, they must be punished
A major industrialist in the sector underlines: “The textile sector, like all other sectors, is affected by the increase in the SMIG. The textile sector does not live outside the law. If there are operators who live outside the law, they must be punished“.
What impact on competitiveness?
“In a market which is not very flourishing, the increase in the SMIG will provide relief especially for textile SMEs. Now the increase in the SMIG will also have direct repercussions on sales prices and export prices“, explains for his part Abderrahmane Atfiformer regional president for Casablanca of AMITH.
Our interlocutor believes that the increase in the minimum wage will have a direct impact on competitiveness.
“We will not be able to offer reduced and competitive sales prices and export prices since we do not have the best productivity. This is not linked only to the SMIG. The minimum wage is one element, but there is also has other cost factors which come into play (logistics, energy consumed, inputs, etc.) which make the price composition competitive or not,” he explains.
“The impact of the increase in the SMIG is enormous because the margins in the sector are not extraordinary. We rely mainly on labor to produce. Unfortunately, Morocco does not manufacture finished products. It depends on the way , or even the transformation of the fabric that belongs to the customer, which means that the added value is really minimal. This is why the impact of the increase in the minimum wage on businesses is of great importance,” continues Hammani. Amahzoune.
Morocco at a disadvantage compared to its competitors
“We are disadvantaged compared to our competitors, in particular Tunisia, Egypt and especially Turkey. Not only does Turkey guarantee its textile employees a higher SMIG than ours, but it also has the advantage of having direct access to the raw material, which allows it to gain in competitiveness whether at the level of deadlines or prices. Turkey also intends to develop its presence on the Syrian market where it will transfer its production with unbeatable prices. This effectively adds to the problem of national competitiveness and the impact of the SMIG on businesses,” explains the president of AMITH Rabat region.
We are at a disadvantage compared to our competitors, notably Tunisia, Egypt and especially Turkey.
Beyond the question of the impact of the increase in the minimum wage, the real problem the sector is suffering from today remains the drop in production due to the decline in orders from Inditexwould like to clarify the latter. “The majority of units in Rabat, Salé and Témara are currently at a standstill, awaiting the resumption of orders from Inditex, particularly for its Zara brand. The situation is observed throughout the territory. The impact is felt mainly in Tangier.
The increase in the SMIG must be correlated with the improvement in productivity
“It is clear that it is not easy to increase in these phases of industrial tension and tension on profitability. If it is imperative to improve purchasing power, we must also ensure that we improve, at the same time, productivityto prevent the company from going into debt. What is therefore necessary is to index the improvement in the added value created by employment on the SMIG”, rebounds the industrialist surveyed by Médias24.
“In Morocco, the SMIG increases faster than added value. Over the last ten years, wages have increased almost twice as fast as productivity. So there is risk of dropping out many sectors, apart from cutting-edge ones, notably aeronautics and automobiles, because they are supported by companies, training centers and technical centers. In traditional industries, there are still efforts to be made in terms of training, innovation and support for businesses with regard to new technologies and robotization.
“It is all the easier to increase the SMIG if we have the support in terms of R&Dproductivity, quality and skills”, recommends our source.
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