Bad, though not surprising news from South Africa. Textile firms are fleeing rising wages and strong unions in South Africa for the greener pastures of Lesotho, Swaziland, and Mozambique. Ekkehard Oelz, chief executive of clothing maker Peter Blond & Associates, told the WSJ:
A business is a business, and investors want their returns…There is no growth potential in South Africa. I, as a business operator, am increasingly concerned.
The big question mark hanging over the future of democratic South Africa is the problem of the black middle class. To build a middle class you have to have many jobs that pay high wages. If you raise the wages you can’t get the jobs; if you don’t raise the wages, where’s the middle class?Watching South Africa wrestle with this problem tells a lot about the future of that country and of the region. So far: no answers in sight.Stay tuned. The only thing worse than a dark Satanic mill exploiting the workers is a dark Satanic mill closing down.