Textile Sector Loses Competitiveness

In recent years, the sector in Guatemala has lost nearly 30,000 jobs, because the high costs resulting from having one of the highest minimum wages in the region, makes it more profitable only to export raw materials, rather than making them in the country.

Monday, June 17, 2019

Vestex figures show that in recent years several jobs have been lost in the sector, given that between 2006 and 2018 the industry lost a considerable number of jobs, going from 82,109 to 53,636 places, equivalent to a 35% decrease.

You may be interested in "Textiles: Regional Purchases up to September 2018

Alejandro Ceballos, president of Vestex, explained to Elperiodico.com.gt that "... the decrease is because clothing is not sustainable so its production is in exporting raw material and not generating labor within the country. The fabrics we send already have an added value, it is stamped, dyed, the yarn is made and woven, but it is easier to export it to be made here. With this we lose."

Regarding foreign sales of raw materials, it was reported that during 2018 Guatemalan companies exported $202 million worth of fabrics to other Central American countries, being El Salvador and Nicaragua the main destinations, since together they accounted for 75% of total purchases.

Ceballos added that "... one of the biggest disadvantages is the handling of the minimum wage, because it is one of the highest in the region. The salary plus the bonus in the nation is US$508.75, while in El Salvador it is US$368.04; Honduras, US$406.79 and Nicaragua US$247.28. 'It's not that we don't want to pay. It's the conditions that make the investment go away.

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More on this topic

Change Promise for the Labor Market

June 2019

Finally, in Guatemala the agreement was approved that will allow companies to hire part-time workers, which promises to be part of the solution to the unemployment problem affecting the country.

On June 27, Governmental Agreement 89-2019 was published in the Official Gazette, establishing the Regulations of Convention 175 of the International Labor Organization (ILO), which will regulate the hiring of part-time workers in the country.

Textile Sector Needs More Job Flexibility

May 2019

Because there is still no regulation for part-time employment in Guatemala, textile businessmen estimate that the country loses between 40 and 70 thousand jobs.

For representatives of the Costume and Textile Commission (Vestex), the high operating and labor costs in Guatemala cause businessmen to send cut pieces to Honduras, El Salvador and Nicaragua to be assembled.

Asian Textiles Tariff-Free in U.S.

July 2009

A group of Democratic senators proposed a law to eliminate tariffs on textile products from 14 Asian countries.

Textile imports from those countries currently pay up to 28% when entering the United States.

Should the proposal be approved, a very likely scenario, the Central American countries would lose the trade advantage obtained with the U.S.

Guatemalan Textile Industry Lost 18,000 Jobs

February 2009

The 30% contraction in exports during the month of January affected the workforce directly with a reduction of 18,000 jobs.

Alejandro Ceballos, President of the Garment and Textiles Commission (Vestex) informed Prensalibre.com: "In five years, we have lost 60,000 jobs.

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