A wage too far?

30 September 1998



The National Minimum Wage is a priority on the new Labour Government’s agenda. Philip Garner reports on how UK textile rental operators can meet additional costs.


The National Minimum Wage could be closer than we think, judging from Trade Union Congress and Government announcements. It was, after all, one of the strongest platforms in New Labour‘s pre-election manifesto.

The most likely figure, it seems, will be a basic rate of £3.50 per hour. And it will be no use employers pointing to extra allowances such as overtime. Allowances will be at the employers discretion and the onus will be on employers to prove they pay the minimum.

In an interview in Laundry and Cleaning News (February 1998), TSA director Murray Simpson surprised me by describing the textile services industry as labour-intensive and by saying that labour costs were higher than in any comparable industry.

How can you compare textile services with any other industry? I doubt if unit shop drycleaners can be classed alongside consumer-oriented sectors such as hotels and catering, motor servicing or domestic appliance repairers. I had assumed—quite wrongly, it would appear—that British textile care managers, particularly in the rental sector, had followed the examples of their European contemporaries and invested in capital-intensive textile rental plants.

I admit that since I officially retired from the post of technical editor of Laundry and Cleaning News, I have not been invited to visit one single British textile rental plant. But I have visited dozens of European plants, including those in former Eastern Bloc countries, and have seen how their managers have countered increasing labour charges by improving efficiency in order to keep prices down for their customers.

From Mr Simpson’s suggestions, I take it that British managers will have to shed labour and so jobs will go. Assuming, however, that managers need to employ a given number of staff to process a given daily workload, then cutting numbers can only lead to lower production, lower daily volumes, a reduction in turnover and a decrease in profitability.

Even worse, it could intensify the long-running price war between rental companies, especially those fighting to retain market-share. It is a route which can only lead to disaster.

The way forward

The solution to the problem created by a regulated minimum wage lies in capital equipment-intensive operation, as is common on the continent. When modern methods are put into place and machines replace people, jobs will naturally disappear.

The use of controlled work-station supply from overhead conveying systems helps to eliminate production time lost through pushing barrows or trucks. Modern management systems maximise staff efficiency too. Multi-skilled operators can be moved around the plant, clocking on and off the job as they do so.

This form of balanced production—a combination of employee time management with maximum machine utilisation—is the only way to keep labour at a minimum, volume at a maximum and control the impact of a minimum wage. Even in automated plants, the use of these techniques can increase the volume of work per operator by 15, 20 or even 30%. The availability of machine fault diagnosis from the equipment suppliers service department and the fast relay of fault correcting instructions to the resident engineer, will minimise downtime even further.

This is the way forward. It was the route chosen by continental textile managements when faced with increased costs imposed by minimum rates, equal pay and high social security obligations. These factors pushed continental wage bills up to levels unheard of in this country, but their impact was contained by using modern methods. At the same time, staff were paid higher wages and enjoyed more take-home pay.

I enquired about the market in the UK for these systems. A spokesman for a leading company told me that demand left much to be desired; most production went for export.

The textile care industry was labour intensive when I came into it decades ago. That it is still so today astounds me. I believe that supervisors and junior managers are on salary levels of around £9000-£9500 a year. If this is true, then that is roughly £1500 less than an average floor worker receives on the continent where minimum wage rates apply.

I conclude that a junior management position in textile care and rental does not offer the young and ambitious good career prospects.

If textile care plant managers had taken advice and adopted balanced production systems to minimise production costs, then they would have been better placed to meet the challenges of the national minimum wage, and to compete with their European counterparts.

If they persist in keeping closed minds, how many will survive into the next millenium?



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