Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Faruque Hassan has urged brands, retailers and buyers to help them implement the new minimum wage for apparel workers by raising product prices.
In a letter sent to the representatives of valued brands, retailers and buyers on Thursday, he made the request.
On December 20, the government of Bangladesh published the final gazette of minimum wage 2023, which will be effective from December 1.
The Minimum Wage Board has increased the minimum wage for garment workers to Tk 12,500 from Tk 8,000 now. It will come into effect from December 1 and workers will receive salaries under the new structure in January.
However, some buyers said they will not be able to increase product prices until June next year. Industry insiders are blaming the buyers for not keeping their commitment, made during RMG workers’ demonstrations.
Meanwhile, eight US congressmen criticised for not to accept workers’ demand of Tk 23,000 as minimum monthly salary, and asked the American Apparel and Footwear Association (AAFA) to take initiative to ensure decent wages for Bangladesh's RMG workers. They also asked the AAFA to ensure fair prices, and raise garment prices to help implement decent salary for nearly four million RMG workers in Bangladesh.
The congressmen also believe that Tk 23,000 salary is logical, and brands and buyers are bound to increase product prices.
In the letter Faruque said, "Ensuring decent living of the workers is also a top priority for us as well as for global brands and retailers. Since we've accepted the new minimum wage, we will ensure its implementation. We need your support in terms of responsible purchasing practice."
“The implementation of the new wage will undoubtedly have a significant impact on the costs of each factory. Not only garment industry, allied industries have also raised their wages, leading to higher prices of accessories and other materials,” he added.
The overall situation is made complicated by the fact that the costs of utilities and transportation have gone up, along with bank interest rates.
Faruque said, “Production costs rose due to electricity, gas and diesel price hike, similarly increase in transport cost and other cost factors are having a significant impact on production costs. Since July this year, Bangladesh Bank has increased interest rates to curb inflation.”
He further said that they have also received official letters from several brands, who have confirmed their stance on pricing in line with wage hikes. “I strongly urge to consider the impact of wage increases as well as cost increases due to huge investments in sustainability of factories. It is critical that we support each other on this agenda if we are to keep our supply chain intact, - to be able to better serve you.”
