In the face of widespread workers’ demonstration, export oriented apparel makers have decided in principle to increase minimum monthly wages to Tk 13,000, which is likely to be proposed during today’s wage board meeting.
Several former Bangladesh Garment Manufacturers and Exporters Association (BGMEA) leaders and owners have confirmed the matter to The Business Post, on condition of anonymity.
During the previous minimum wage board meeting, the owners’ representative proposed Tk 10,400 minimum wage per month , while the workers representative demanded Tk 20,393.
In the aftermath of the owners’ proposal, workers launched a violent protest and staged demonstrations in Savar and Gazipur.
These demonstrations forced owners to shut factories down in a bid to save establishments and workers' lives, as protests killed at least two and injured several hundreds. A good number of factories were also vandalised and torched.
Amid the situation, owners decided to review the wages proposal, and are going to place a new one before the board. The upcoming proposal is 62.5 per cent higher than the existing Tk 8,000 minimum salary.
While asked, several owners, and former and present BGMEA leaders said they will start the negotiation from Tk 12,000 in the wages board meeting.
A BGMEA leader told The Business Post on condition of anonymity, “The minimum wage amount will likely be up to Tk 13,000, and we are willing to pay this.
“But if the workers refuse to accept this amount, we will not have any other option as our business situation is not good due to the ongoing global and domestic economic crisis.”
Adding they set several meetings with the workers’ leaders to reach a principle decision, and both parties were almost satisfied, he added, “Nevertheless, the wages board failed to reach a milestone so far. Prime Minister Sheikh Hasina will make the final decision.”
Meanwhile, BGMEA President Faruque Hassan said, “We will propose a decent salary hike to the wages board, and we are optimistic that a new salary structure will be set Tuesday.
He, however, did not mention the figure, saying, “The brands should support us in executing the new wage structure as they are also stakeholders, and they have the responsibility to ensure better lives for workers.
“We do not want to wait for a single day to announce the new structure.”
Industry insiders said most of the BGMEA leaders decided to place Tk 11,000 or more as minimum wages proposal to the board. Even many senior leaders also recommended to the BGMEA to set a meeting with the workers leaders before placing the proposal.
But some influential former and existing BGMEA board members did not consider their recommendation and placed Tk 10,400 as minimum salary, which made workers agitated.
As a result, the RMG sector faced a new crisis. The industry is already in trouble and October export earnings are down more than 13 per cent year-on-year.
Terming the owners’ proposal as illogical, State Minister of Labour and Employment of Bangladesh Monnujan Sufian told the media, “Owners should increase wages beyond their initial proposal, and ask workers to rejoin when the new salary structure is announced.”
Finally, the BGMEA joined the negotiation process to normalise the situation, and senior leaders of the apex body said this is a lesson for them, and BGMEA could have avoided the unstable situation easily.
A senior trade leader of the RMG sector said, “We are under pressure from the government and buyers to bring the apparel sector situation under control, and we are also facing huge losses due to the shutdown of factories due to workers’ unrest.”
RMG Workers’ representative of the wages board Shirajul Islam Rony claimed that he does not know how much will be proposed by the owners as minimum monthly wages, but said, “We have learned that they will propose above Tk 12,000.
“Some apparel sector leaders informed me that they have a proposal from the top official of the government, and they are going to propose this. But as a workers’ leader, I am yet to receive any message from the government side.”
Adding that workers will not be satisfied unless they secure a significant wage hike, Rony said, “The new wage structure must be fixed through negotiation between both parties.”
Wage situation in Bangladesh
An analysis of wages paid by different RMG exporter nations show that Bangladesh pays one of the lowest monthly wages to its workers. China pays a minimum $161 in RMG worker wages, while India pays $165, Vietnam $191, Pakistan $110, and Cambodia $200.
Bangladesh had fixed $100 or Tk 8,000 in 2018 as monthly wages for RMG workers. Due to depreciation of the local currency, the wages now amount to $74.5 per month, show central bank data.
Bangladesh’s development partners had earlier said the country should move away from the low wage trap after graduating from Least Developed Country (LDC) status, as the existing minimum pay for RMG workers is not nearly enough to cover skyrocketing living costs.
leading 15 us clothing brands have written to the prime minister of Bangladesh recommending a hike in minimum wages for RMG workers, to a figure that is sufficient to cover basic needs, provide discretionary income, and takes into account inflationary pressure.
Besides, on September 12, the Action, Collaboration, Transformation (ACT), a joint initiative between 19 international garment brands and retailers and IndustriALL Global Union, sent a letter to the BGMEA, EPB and Minimum Wages board to support the development of living wages in the RMG sector.
