The readymade garment (RMG) makers are planning to propose Tk 9,000 monthly wages for grade 7 workers to the Minimum Wages Board, despite the workers’ demand for Tk 23,000 per month.
If they propose this figure, it will be lower than the 2018 wage structure when comparing USD rates. During that period, the Minimum Wages Board had fixed Tk 8,000 or around $100 for workers – the lowest figure compared to competitor nations, including Pakistan and Sri Lanka.
The USD rate has since then rose from Tk 80 to Tk 110. So, this means the RMG owners are going to propose around $82 per month as minimum wages for garment workers.
On April 9 this year, the government formed a six-member wage board for RMG workers, headed by senior district judge Liaquat Ali Mollah.
The board’s six months tenure already expired, and it received multiple extensions. But it has yet to put forward any proposal for the new wage structure for nearly four million RMG workers across the country.
This board’s fourth meeting is scheduled to be held on October 22 in the capital, and the chairman has asked both the RMG owners and workers’ representatives to submit their wage proposals there.
Industry insiders say the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) held a board meeting on October 8, which was presided over by board President Faruque Hassan.
In the meeting, the BGMEA directors discussed what amount should be proposed to the wage board for an entry level worker.
Preferring to be anonymous, an official who was present at the meeting said, “Directors said that it will be tough to increase wages for entry level workers under the current business atmosphere.
“It is required by the law to increase wages every five years, and the government has already formed a wage board for this purpose. But the minimum wages for workers should not cross Tk 9,000.”
The directors, however, agreed to hike the general operators’ wages from Tk 8,399 to Tk 11,000, and reduce the number of grades – which is now seven.
Speaking to The Business Post on condition of anonymity, a BGMEA director said, “We will propose the figure to the board, despite the workers demanding Tk 23,000 or more. Some factories will not be able to pay such a salary due to bad business.”
When asked whether the workers will accept this amount, he said, “If we propose Tk 23,000, the workers will demand even more. We cannot make everyone happy. People will always want more.”
Since early 2022, RMG workers have been holding demonstrations seeking a hike in wages to tackle skyrocketing inflation. Though several trade unions are demanding different minimum wages, most of them are proposing Tk 23,000 as monthly minimum salary.
On the other hand, the Centre for Policy Dialogue (CPD) on Sunday recommended Tk 17,568 monthly minimum wages for readymade garment (RMG) workers on the backdrop of skyrocketing inflation.
The think tank said it will be possible for a garment factory to execute this initiative if the buyers hike the cost of manufacturing (CM) by just $0.07.
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.
They pointed out that along with the government and industrialists, brands and buyers also have the responsibility to help Bangladesh leave behind the trend of low wages.
Bangladesh Garment Sramik Samhati President Taslima Akhter said, “In the last five years, minimum living expenses nearly doubled, and RMG owners’ income also increased by a lot. But our wages have stagnated.
“A four-member family needs to spend at least Tk 40,000 per month to cover living expenses. But taking into account the situation, we are proposing Tk 25,000. If the board does not consider our demand, we will take to the streets for our rights.”
At a recent CPD programme, Charge D’affaires at the Netherlands Embassy in Bangladesh Thijs Woudstra said, “Bangladesh (should] move away from the low wage trap when graduating [from the LDC status]. There are no alternatives to improving working conditions and wages.”
At the same event, European Union (EU) Ambassador and head of delegation in Dhaka HE Charles Whiteley said, “It is very important to take into cognizance the workers’ health complaints. It is hard to avoid the wage issue. We are now at a very pivotal moment.
“It has been five years since the last wage revision, and the minimum pay stands at only TK 8,000. By any stretch of the imagination, it is not a very healthy way to live on, particularly if you have kids to feed.
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.
The ATC letter reads, “We sincerely hope and urge that the RMG Minimum Wages Board members reach a negotiated consensus that allows the setting of a new minimum wage in Bangladesh that will cover the minimum income necessary for a worker to meet the basic needs of himself/herself and his/her family including some discretionary income.
“This should be earned during legal normal working hour limits.”
In response to these concerns, BGMEA President Faruque Hassan had sent individual letters to all stakeholders, including brands, buyers, trade unions and consumers, seeking their support to implement the upcoming new wage structure for the readymade garment sector.