Demands for higher wages and better working conditions are migrating from China, Bangladesh, Cambodia, Indonesia and Malaysia to India, the world's second-largest manufacturer of footwear, which had remained relatively unscathed so far. Observers feel that the internet has led to an easier and quicker exchange of information among workers on a global basis, fostering the creation of a more balanced playing field among producers and their employees in the various countries.
We could not obtain any precise information on the new trends in workers' compensation in India's footwear industry, but some of the Indian companies that we interviewed at the Expo Riva Schuh show in Italy a few days ago confirmed reports that they had bowed to demands for higher wages at their factories on an individual basis, without signing a new collective labor agreement.
The wage increases granted by the companies that we met ranged from 20 to 30 percent, compared with previous annual increases of around 10 percent that have been more or less in line with general inflation. The higher wage increases concerned individual companies from the clusters around Agra and Chennai as well as the region of Mumbai.
Contrary to a rumor heard at the fair, no actual strikes were organized in Agra earlier this month, but there were some scattered and relatively peaceful demonstrations at some plants. Some workers refused to take the bus to go over to their factory, but bowed to the management's request to go back to their work
Indian shoe workers' salaries remain among the lowest in the world. According to Peter Mangione, the American consultant, they grew by 13.3 percent last year to an average of 85 U.S. cents an hour. Some of their employers said that they could live with high wages because the domestic market is beginning to accept higher prices for footwear and because the recent devaluation of the Indian rupee is facilitating their exports. They said they were more worried about rising prices for finished leather, which tends to represent about two-thirds of their manufacturing costs.
In China, meanwhile, reports indicate that workers in Shenzhen and Yangzzhou have been given wage increase of between 13 and 15 percent for this year. Peter Mangione, the well-known American footwear industry consultant, continues to believe that China will maintain its high production volumes in the future because of the infrastructure that has been built to support the industry.
Another American consultant is targeting Ethiopia, where workers' wages are among the lowest in the world, the supply of leather is plentiful and the establishment of new infrastructures is in full swing.