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RMG workers yearn for beefy wage structure

Arifur Rahaman Tuhin
24 Jul 2023 22:58:22 | Update: 24 Jul 2023 22:58:22
RMG workers yearn for beefy wage structure

Fatima, an assistant operator with ten years of experience in the readymade garment industry, currently gets Tk 9,500 per month – under a workers’ wage structure set by the government back in 2018.

Back then, both Fatima and her husband worked at Fashion Plus Garment in the city’s Uttar Khan area for the same pay. Their income used to be enough to support the duo and their son Shafiqul, but then came the Covid-19 crisis, and the Russia-Ukraine war.

Skyrocketing inflation kept pushing up the prices of essential commodities, effectively putting their back against the wall.

The family had cut meat and fish from their daily diet in a bid to afford three square meals with their meagre salaries, and to send their 21 year old son to a university. The family was dealt another financial blow after Fatima’s husband became too ill to work in 2021.

Because of this, Shafiqul’s studies came to an abrupt end, and he started working as a quality inspector at another garment factory in the area for Tk 9,568 per month. Fatima and Shafiqul’s combined income of around Tk 19,000 per month is not enough to support a family of three.

Like them, several lakhs of garment worker families are now waiting for the government to announce a new wage structure for the RMG industry, which is revised every five years. The country’s RMG workers are looking forward to a significant hike in pay to battle the inflation.

Detailing his predicament, Shafiqul said, “Before the Covid-19 pandemic, we had a good life. I was studying, and most of the day we had fish or meat. But since the pandemic, most of the essential commodities prices have more than doubled.

“I stopped my studies, and started working. But our financial situation saw little improvement. The net monthly income of my family has remained near Tk 19,000 since 2018. But during this period, our house rent rose by Tk 2,000 to Tk 4,500, and my father’s treatment costs Tk 3,000.”

Shafiqul says the minimum salary of a RMG worker should be Tk 20,000 per month.

What’s the status?

The RMG wage structure is revised every five years. The Ministry of Labour and Employment formed the four permanent-member new wage board on April 9 this year for another revision. This board is headed by senior district Judge Liaquat Ali Molla.

Two persons representing the workers and owners are also on the board.

The board held its first meeting in the capitals’ National Wage Board office on May 24 this year, but failed to reach a decision. Board Chairman Liaquat Ali Mollah asked the representatives to place a concrete proposal in the next meeting, a date for which is yet to be fixed.

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, India $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.

Worker’s representative to the new wage board Sirajul Islam Rony, who also serves as the president of Bangladesh National Garments Employees League (BNGWEL), said, “We have already held a meeting with leaders from trade unions to set up a wage structure proposal.

“We have received proposals for different minimum wage structures, and are currently assessing the options. We will hold another meeting in this regard soon, and finalise the new wage structure proposal.”

He hinted that the proposal will likely seek TK 20,000 as monthly wages for an entry level worker.

Industry insiders however say the factory owners’ representative is yet to hold any meetings with the stakeholders. They however said they will set up a proposal within the next week.

The wage board’s second meeting may be held at the end of this July.

What should be the minimum salary?

Back in December 2018, the government-nominated board declared a new pay structure fixing minimum wages at Tk 8,000 per month. Since then, demanding a raise in wages, many workers have held demonstrations throughout 2022 and 2023.

Workers leaders say considering the ongoing inflation, the new minimum wage should be at least Tk 24,000 per month.

Speaking to The Business Post, Bangladesh Garment Workers Trade Union Centre (GWTUC) General Secretary Joly Talukder, said, “Countries such as Vietnam and Cambodia are paying their RMG workers $190-$200 per month, why cannot Bangladesh afford this?

“When workers’ wages go up, buyers readjust their prices. If owners fail to secure fair prices from buyers, it is their failure, not ours.”

Owners, however, point out that most of the factories are incurring losses as buyers are placing a lower volume of orders due to the ongoing global economic crisis. They claimed that no factories in Bangladesh can even afford Tk 15,000 minimum wage for workers per month.

A garment factory owner, on condition of anonymity, said “If the minimum wage is set at Tk 12,000, it would be affordable by everyone.”

The Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Vice President Fazlee Shamim Ehsan said, “The new wage structure should be realistic. The board should consider the interest of both the workers and owners.”

What do experts say?

Commenting on the issue, Policy Research Institute of Bangladesh Executive Director Ahsan H Mansur said, “The workers have been receiving a 5 per cent annual increment every year, but inflation is much higher than the figure. That is why the workers’ lives became much tougher.

“The board must consider actual inflation while proposing a new salary structure.”

The economist added, “The board needs to adjust inflation of the last five years with the annual increments. Alongside a raise, the new salary structure should cover for the shortfalls.

“The new wage board needs to consider two things – workers minimum standard wages and competitiveness in the international market – while setting the new wage structure.”

Experts say in the last five years, the country faced nearly 10 per cent annual inflation, though the Bangladesh Bureau of Statistics (BBS) showed less than the figure.

Besides, the USD appreciated against Taka by at least 35 per cent during the five-year period, and the RMG factory owners benefited from the local currency depreciation. That is why a significant hike in workers’ wages is a realistic demand.

Centre for Policy Dialogue (CPD) Distinguished Fellow Mustafizur Rahman said, “The board will have to protect workers’ rights while setting new wage structures.

“We have to gradually ensure a wage capable of supporting workers’ livelihoods. The board should increase wages based on $100 using the current conversion rates.”  

The eminent economist added, “Factory owners are saying they will not be able to afford the new wage structure if it goes up significantly. The previous wage increment in 2018 was 60 per cent, while it was 66 per cent in 2013.

“If the owners were able to afford the previous wage structures, they can certainly afford the new one.”

He then said, “Buyers are currently paying lower prices to the manufacturers because they are also paying less to the workers. When new wages come into effect, brands will increase product prices.

“Even after setting standard wages, we will continue to hold an advantageous position in the global market because our competitors are paying their workers significantly more than us.”

The CPD fellow recommended that the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) should set up meetings with global brands to discuss the new wage structure after its implementation.

“Factory owners should develop their bargaining capacity to ensure fair prices.”