Worker protests: How higher wages and the viability of industry can be the win-win India needs
Retrospective hikes, however, are bad policy. For labour-intensive sectors such as textiles where wages account for a large share of costs and margins are in the 5-7% ballpark, a sharp percentage increase in the wage bill can wipe out profits entirely. What’s more, manufacturers operate on annual or seasonal production cycles, locking in orders, costs and contracts several months in advance.
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