Newsletter Wethica .Proyecciones 2016
2016 is still quite new and the Chinese year of the Monkey is still to come. We are then at a time of greeting and analysis, but also a time of projections. It is obviously a difficult exercise and many too detailed previsions will be proven wrong. Still, let’s try for some trends.
One of the most noticeable country of 2015 was the Turkey. It has been involved in several geopolitical events and, in the labor point of view, the key point was clearly the massive flow of migrants. Media have mainly talked about migrants just crossing the country to go to Europe, actually many have settled in Turkey for few months or expect to stay few years. Therefore, the number of potentially illegal workers has greatly increased. At first the migrants lived on their savings, but there is no more, so they are ready to take any type of work at almost any wages. Thus, we expect to see the average wage dropping in the coming month in Turkey. On the contrary, the non-conformity related to illegal wages will likely to increase a lot in 2016. We have actually started to see that in the falls audits in the less structured companies. This obviously impact the production costs and then the competitive advantage of these small subcontractors and lead to a global pressure on prices, leading factories to reduce their costs. All the more there is an easy solution on workers available.
Subcontracting is also at the heart of our second guess. 2015 has been quiet for Bangladesh on a media point of view. It has been a more stable time allowing the implementation of needed improvements. It was a necessary time. However, the checking of the building lead to some paradox. Many buildings are considered as not safe and can’t be used anymore for the export market. But they haven’t been destroyed either (but some rare cases). The local market for garment is not that big for all these factories not allowed to export. Massive subcontracting will continue to rise in Bangladesh in unauthorized but also unaudited factories. We can only be worried of the possible maltreatment on workers and about accident in these still unsafe factories.
Recently, western media have talked of financial and economic difficulties of China. Indeed, manufacturing is clearly in a troubled time this year and we have audited many factories running well below their capacity. So the working time has been a little lower in 2015, with more factories close to 65 hours a week and even sometime some factories with only a little more than 60 hours a week. We should celebrate this situation which has a positive impact on working conditions. However, it seems 2016 won’t be as good. Factories are usually hiring for a one-year period after the Chinese new year, even though it is not always written like that. As the orders are low currently, it is likely the factories will hire fewer workers in February. Thus, when the orders arrive, the factory capacity will be lower and the workers will have to do more overtime to compensate.
The first semester will confirm or not these projections. But, anyway, that remind us the world is changing and so should the audits and assessment analysis.
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