Readymade garment industry workers had been demonstrating for a long time demanding a raise in wages. In this context, the government formed a minimum wage board.
Approving the proposal suggested by the factory owners’, minimum wages for the RMG workers was set at Tk 12,500 on Tuesday (7 November 2023) in the sixth meeting of the wage board.
Besides, some changes are being made to the previous wage structure. The new wages will be activated from 1 December. Considering the continued high inflation, market price and living cost
Still there remain questions regarding, how reasonable and realistic is this new minimum wage of garment industry workers, considering the continued high inflation, market price and the cost of living.
Workers’ representatives had proposed hiking the minimum wage to Tk 20,393 in the fourth meeting of the wage board on last 22 October. Factory owners’ representatives on the other hand had proposed a wage of Tk 10,400.
On the following day, agitation arose among the workers in several industrial zones of the country including Ashulia and Mirpur. Two of the workers were killed in the clash.
In connection to the agitation, owners kept more than 600 factories closed. After the new wages were fixed, a woman was killed in a clash with the police during a workers’ protest in Gazipur on Wednesday.
According to the finalised wages proposal, 54.6 per cent of the total wages would be the basic salary. The workers however had proposed the basic salary to be raised to 61 per cent.
Plus, they had also proposed the formation of five salary grades instead of seven, a wage difference of 10 per cent between two grades, gratuity and ration system.
Though the garment industry in Bangladesh is more than four decades old, workers’ wages in this sector is the lowest here compared to the competitor countries.
The last time wages were fixed for the RMG workers was in 2018. The minimum wages were fixed at Tk 8,000 back then. Considering the dollar exchange rate, minimum wage was fixed At USD 95.35 then.
For the last several decades, Bangladeshi garment industry’s branding before the world has been cheap labour. But how cheaper can it be? For how long can it remain cheap?
If the current dollar price fixed by the government is taken into account, the wages should be around USD 113.
After China, Bangladesh is the second largest RMG exporting country of the world. The minimum wages for the workers of this industry in China is USD 303. Bangladesh is followed by Vietnam, Cambodia, Indonesia and India in exports.
According to the data provided by research farm CPD, the minimum wages in Vietnam, India, Cambodia and Indonesia stands respectively at USD 170, USD 171, USD 200 and USD 243.
Bangladesh has to compete in the same global market as these countries. Now the question is, if the garment factory owners of these countries can do it, why can’t the owners of Bangladesh?
For the last several decades, Bangladeshi garment industry’s branding before the world has been cheap labour. But how cheaper can it be? For how long can it remain cheap?
In order to maintain the growth of factory production, workers have to be able to live a healthy life and the residence where they live, has to be hygienic.
But, how plausible it is for a worker to be able to survive well with their families on the wages they have been promised? Or how realistic is this new wages?
Along with the growth in business, RMG industry is far ahead of others in terms of receiving government facilities and incentives as well.
While other industrial factories have to pay up to 45 per cent of corporate tax, the garment factories pay this tax at a rate of 10-12 per cent.
Apart from this, the garment industry owners receive facilities such as cash assistance, VAT rebate, low-interest loans from the Export Development Fund (EDF) and duty free import of raw materials.
Trailing so far behind other competing countries in paying wages to the workers despite having so many advantages, cannot be logical in any possible way.
If workers’ agitation regarding the wages continues, the stability of the RMG industry will be at risk. We believe there’s scope to make the wages of the RMG workers reasonable and realistic taking the current market condition into consideration..