RMG exports surge 24-fold in three decades, wages increase only 13 times 

RMG workers held processions and rallies in Dhaka on 10 November, 2023, demanding a wage hike and justice to deceased workers.
Suvra Kanti Das

A decade ago, the wage board initially proposed a minimum wage increase for garment workers from Tk 3,000 to Tk 3,600. However, this proposition sparked discontent among the workers, leading to a strike. Eventually, in 2013, the wage was set at Tk 5,300. 

Recently the owners proposed a Tk 10,400 wage, only half of the amount recommended by worker representatives to the wage board. Workers responded by going on strike. Following this, the owners revised the wage to Tk 12,500. This proposal has been confirmed, but the workers are unsatisfied with this wage. 

Continuing their protest, garment workers argue that a wage of Tk 12,500 cannot meet their needs, especially with the high inflation. The owners emphasise the potential of the garment industry, but express concerns about the feasibility of meeting this proposed wage, stating that many might struggle to afford it. 

While export of readymade garments has surged significantly by 24 times over the last 28 years, the wages of garment workers have only increased by 13 times. 

The rise of the garment industry in the country began in the early eighties, coinciding with jute and jute products emerging as the top export sector in the early 1990s. During this period, the minimum wage for garment workers stood at Tk 627. In 1994, the Wage Board was established, marking the first time the board increased the minimum wage, raising it by 48 per cent to Tk 930. However, there was no change in the minimum wage for 12 years, despite a consistent increase in readymade garment exports. 

In 2006, the newly established Minimum Wage Board substantially increased the minimum wage for garment workers by 79 per cent, setting it at Tk 1,662.50. Another significant increment occurred in 2010, raising the minimum wage by 80 per cent to Tk 3,000. 

Tragic incidents like the fire at Tazreen Fashions in 2012 and the collapse of Rana Plaza in Savar the following year sparked widespread criticism regarding the working environment and worker wages in the garment industry, both locally and internationally.

Responding to this, the government established the Minimum Wage Board in 2013 to review garment worker wages. The board increased wages by 76 per cent, setting it at Tk 5,300. According to labour laws, wages are reassessed every five years. In line with this, the wage board formed in 2018 increased garment worker wages by 51 per cent, setting it at Tk 8,000. 

The export figures clearly reveal that the growth rate of readymade garment exports has surpassed the rate of wage increases. According to the Export Promotion Bureau (EPB), the value of readymade garment exports stood at USD 1.88 billion in 1994, escalating to USD 45.70 billion last year.

This accounts for a staggering 24-fold increase in garment exports over the past 28 years. In contrast, the lowest wages for garment workers have only increased 13 times during the same period.  

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Bangladesh has maintained its position as the world's second largest exporter of ready made garments for over a decade, primarily due to the consistent growth in this sector.

As per World Trade Organization (WTO) data, China holds the largest market share in global readymade garment exports, amounting to 31.7 per cent, while Bangladesh secures 7.9 per cent.

Following Bangladesh, Vietnam holds a 6.1 per cent share, with Turkey at 3.5 per cent and India at 3.1 per cent. 

Despite leading in exports, Bangladesh falls behind in terms of wage competitiveness compared to its counterparts. Garment workers in countries like India, Cambodia, China, Indonesia, Vietnam, and Pakistan earn higher wages than those in Bangladesh. Remarkably, this crucial sector, one of the country's top export earners, offers lower wages than several other sectors. 

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An analysis of currency exchange rates and minimum wages for garment workers highlights significant fluctuations over the years. In 2013, with a dollar exchange rate of 77.75 taka, the minimum wage stood at USD 68 (equivalent to 5,300 taka). By 2018, the exchange rate increased to 83.90 taka, correlating the minimum wage to USD 95 (8,000 taka). Presently, with the dollar rate at 110.5 taka, the projected minimum wage for garment workers would be USD 113 (12,500 taka). 

Comparative research reveals varying minimum wages for garment workers across different countries. While Bangladesh's minimum wage lingers at USD 113, other nations exhibit higher rates, such as USD 171 in India, USD 303 in China, USD 200 in Cambodia, USD 242 in Indonesia, USD 170 in Vietnam, and USD 110 in Pakistan. Notably, the lowest wages for garment workers in Bangladesh account for only 2.93 per cent of the GDP per capita, positioning other countries, except China, ahead in this aspect. 

An industry association director, speaking anonymously, addressed the wage scenario, suggesting that incorporating overtime and attendance bonuses could significantly augment the minimum wage of 12,000 taka. Additionally, workers demonstrating enhanced skills can swiftly progress to higher salary grades within a year. 

The new wage board structure outlines apprentice workers' wages in the garment industry at 9,875 taka, with a basic salary of 4,950 taka. These apprentices have a training period lasting up to 6 months before advancing to grade 5 with a salary of 12,500 taka. 

In 2006, during the period when Nazma Akter, the president of the National Garment Workers Federation, represented the workers in the Minimum Wage Board, negotiations were pivotal. Initially, the owners agreed to a wage of 1,600 taka, but through negotiations from 10:00 am to 7:00 pm, the workers' representative secured an additional 62.5 taka. 

Confirming these negotiations, Nazma Akter highlighted the historical struggle of workers for fair wages. She pointed out that although this movement has persistently advocated for wage increments, this year, tragically, it resulted in the loss of four garment workers' lives.  

She stressed the need to revise the methodology employed in raising wages. Nazma Akter emphasised that the workers' voices must be heard to prevent labour unrest. Moreover, she criticised the approach of suppressing labour movements through methods like police intervention, lawsuits, and factory closures, suggesting instead a dialogue with workers for a reconsideration of wages. 

*This report, originally appeared in Prothom Alo print edition in Bangla, has been rewritten in English by Farjana Liakat