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Lesotho’s Minimum Wage for Factory Workers Just Went Up 62 Percent

After months of negotiations and setbacks, worker’s unions in Lesotho are celebrating an increase in their national minimum wage.

The new monthly minimum wage in the country ramping up its apparel manufacturing, has climbed 62 percent from $85 a month to $138, according to to IndustriALL Global Union.

The hike comes as a huge victory for local unions, who had begun to mobilize after talks with the Minister of Labor had stagnated. The Independent Democratic Union of Lesotho (IDUL) was ready to enforce full labor stoppages in major centers like Maseru and Maputsoe if their demands weren’t met. But the threat of lost production spurred the government into action ahead of the potential setback.

Talks to raise the mandated minimum wage had been ongoing in Lesotho for months before the latest breakthrough. The Ministry of Labor, which is required to release changes to the mandated minimum in a government periodical, began facing increased scrutiny and nationwide protests in response to a proposed 7 percent increase announced last year. Unions alleged that the proposal was insufficient to combat increased costs and inflation.

“Whenever we demand salary increments, we are told the ‘ridiculous’ amounts that [we ask for] will chase away investors. We understand that, but in these investor’s home countries, the basic salaries are way higher than those of our country,” the Lesotho Sunday Express reported Rathakane Rathakane, an IDUL board member as saying in response to the earlier proposal.

According to the World Bank, more than half of Lesotho lives in poverty and around 30 percent of the population can be described as living in “extreme” poverty with some families subsisting on nearly no income. The textile and garment sector in Lesotho is the largest non-government employer and employs more than 35,000 workers—more than 80 percent of whom are female.

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The change in the minimum wage is likely to have some impact on the textile industry in Lesotho, as one of the major sticking points in negotiations centered around a fear that factory owners would not be able to cover the sudden increase in cost. Employers had favored a more graduated approach that would have seen the same wage increase applied over two years and capped in 2020.

But labor unions and workers weren’t having it. Recently, factory workers in Lesotho have seen their buying power eroded due to an increase in consumption taxes and a transportation price hike that saw some modes skyrocket to 150 percent of their previous rate. The added economic pressure on workers made the demand for higher wages that much more strident and fueled union mobilization efforts.

“After sustained pressure, the government addressed our demands exactly the way we wanted,” Daniel Theko, general secretary of IDUL told IndustriALL about the announcement.

Lesotho’s viability as a sourcing locale may come into question for U.S. companies just starting to source there in light of the wage uptick. Currently, 80 percent of Lesotho’s textile factory exports are bound for the U.S., according to the Sunday Express. However, Lesotho’s wages were below other low-cost sourcing countries before the increase, coming in lower than China, Taiwan and neighboring South Africa.