Hundreds of garment workers and union leaders took to the streets of Dhaka on Friday after rejecting government plans to raise their minimum wage to Tk 8,000 (US$96) per month.
Union leaders and workers described the new wage as a “joke” and a “slap on the face.”
Mujibul Haque Chunnu, Bangladesh’s State Minister for Labor and Employment, on Thursday declared the new minimum wage, a 51% increase from the previous Tk 5,300 ($64).
Prime Minister Sheikh Hasina had held meetings with stakeholders to placate disgruntled workers in a sector considered to be Bangladesh’s golden goose as the country heads for national elections this year.
The new wage was fixed following the Bangladesh Labor Law, which has a provision to fix wages after a five-year interval.
On Sept. 14, the leaders of 14 garment worker unions staged protests and made statements against the wage. Mahbubur Rahman Ismail, the coordinator of the Movement for Garment Workers’ Rights, said the new wage is not acceptable.
“We had demanded Tk 18,000 ($215) and the government declared only Tk 8,000 ($96). It’s like a slap in our face,” Ismail said at a demonstration against the wage hike in Dhaka.
Demand for higher wage
This new wage comes after a series of debates about the wage between factory owners and workers in the past few years. The minimum wage was last revised in 2013, right after the collapse of Rana Plaza, one of the worst industrial disasters in history that killed 1,129 people.
After the disaster, the government’s wage board increased the minimum wage for entry-level jobs in the garment industry from Tk 3,000 ($36) per month to Tk 5,300 ($64).
Shamim Imam, a leader of the Bangladesh Garments Sramik Mukti Andolon (Bangladesh Garments Labor Liberation Movement) union, said that within the new fixed amount of Tk 8,000, the basic salary was only Tk 4,100 ($49). The previous basic salary was Tk 3,000 ($34). With a 5% yearly increment, according to the provision of the wage board rule, the basic salary automatically stands at about Tk 3,828 ($45) after five years.
“So, it means that our basic salary has increased by only Tk 372 ($5) in five years. It’s a cruel joke to us,” Imam said.
While the workers have been demanding a minimum wage of Tk 18,000 ($215) per month, the owners’ association placed a proposal to the minimum wage board formed by the government to revise the wage, saying they could at best offer Tk 6,300 ($75). The wage board finally fixed it at Tk 8,000 per month.
The garment sector is significant for Bangladesh’s economy. Its export earnings were $30.61 billion in the last financial year. It employs 40 million workers, mostly women, and contributed 83.49% to Bangladesh’s total exports of $36.66 billion in the FY 18.
Bangladesh has now set a target of earning $50 billion from apparel exports by 2021 – when the country will complete 50 years of its independence. Experts say, in doing so, there is no option but to improve worker’s wages and living conditions.
Not enough for a decent life
Hasnat Kabir, the Office Secretary of the workers’ union Garments Labor Front, told Asia Times that the government had fixed the minimum wage of laborers at state-owned industrial organizations at Tk 17,812 ($213) on July 2 this year.
“By fixing that wage, the government in a way has agreed upon the fact that without that amount [at least], it is not possible for a worker to survive. So our demand of increasing the minimum wage of a worker to Tk 18,000 ($215) in the sector, which earns the country the lion’s share of its export income, was legitimate,” he said.
Saying the new minimum wage would not work, Kabir added: “Out of this [Tk 8,000] wage, Tk 2,050 ($25) is fixed as house rent. It’s ludicrous. No house is available near any industrial area under Tk 3,000 ($36). With that amount, it’s not even possible to find a house even in a slum far from the industrial area.”
MM Akash, a Professor of Economics of Dhaka University and one of the consultants on the wage board, said Tk 8,000 ($96) was nowhere near the amount he suggested.
He said, in reality, a six-member family of a worker needs about Tk 28,620 ($341) per month to lead a decent life with basic facilities. “Considering the economic condition of the whole country and the capacity of the owners, I had recommended Tk 16,000, which is the minimum,” he said.
Md Harunur Rashid, a data investigator for the French development agency AFD, said the minimum salary for a government employee in Bangladesh was Tk 15,250 ($182). He asked if it was possible for a garment worker to make do with one-third of that amount when both purchased their essentials from the same markets.
Higher cost of production
Factory owners say the revised salary of Tk 8,000 ($96) was, in fact, too much for them to bear. Siddiqur Rahman, President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) – the apex body of apparel manufacturers and traders – said in the last few years a number of garment manufacturers had to shut their factories as they could not cover their costs.
“After the Rana Plaza accident, we needed to go through a lot of reforms in our infrastructure, which cost us significant investment,” said Rahman. “We needed to improve the working conditions by freeing up the factory space and by bringing in new machines. This cost us lots of money. Besides, we needed to give the workers the increment. Under the circumstances, it has become hard for many of us to survive,” he said.
The former president of the association, Md Atiqul Islam, said the cost of production went up while product prices went down in the global market. “Now that the minimum wage is increased by 51%, the government should incentivize the apparel sector in other ways,” he said.