Jaipur: Companies paying less wages to offset rising cost burden

JAIPUR: Contrary to the concerns of labour shortage at factories that manufacture apparels, home furnishing products and handicrafts for domestic markets, depressed wages are a worry for many labourers who chose not to leave for their native places and stayed back during the lockdown.
Jaber Ali, a tailor from Malda district in West Bengal, working in a textile company in Sitapura industrial area said his income per piece had reduced by 20% and there was not enough work to do overtime and make up for the losses.
“I used to make Rs 20,000-22,000 per month before the lockdown. Now, that has come down to about Rs 12,000. If I was getting Rs 50 per shirt earlier, now I get Rs 40,” said Ali who chose to stay back unlike some of his friends at the factory who left for their homes just before the lockdown came into force.
As markets, malls and retail outlets remain closed, manufacturers catering to retailers like Reliance, Shoppers Stop, Westside and others have slashed production to about 25%. While about 60% of the workers have gone home, there is not enough work for those who stayed back.
Digvijay Dhabriya, chairman of PHDCCI-Rajasthan said, “The reduction in wages is factory specific. About 30% of operation cost is fixed. Whether a factory works at 80% of capacity utilisation or 30%, this component remains same. That’s why when a factory runs at a lower capacity, the cost of production per unit of product rises because of the fixed cost. Maybe some companies rationalizing that by reducing some wage cost.”
However, he said it is important for a company to engage as many workers as it can during the current situation. Otherwise, they will leave Jaipur and go to other places like Delhi, Noida, or Gujarat, he added.
Ali may represent a small group, but most of the tailors are from Bihar. The apparel industry is dependent on them. While the companies catering to domestic market are facing demand headwinds, the work orders for exporters are in a better position and they need the tailors to come back.
Vimal Shah, president of the Garment Exporters Association of Rajasthan said, “Tailoring is a major part of the production. We need them and they are willing to come back. But the cancellation of bus service is a hurdle for them. The bus services to Bihar should be restored. Many prefer buses as they are picked up from their villages directly.”