The wage board set up in June in Bangladesh on Monday recommended a 77 percent increase in the minimum wage for textiles and apparel industry workers to 5,300 taka, or $68, a month, from $38 a month.
This story first appeared in the November 5, 2013 issue of WWD. Subscribe Today.
The second-largest garment exporter in the world after China, the garment industry in Bangladesh has been under pressure from workers as well as international organizations after a series of disasters in the past year have taken the lives of more than 1,250 workers.
Workers have been demanding higher wages and better working conditions with a series of protests that have intensified over the last two months. They have been seeking 8,112 takas, or $102, as a minimum wage, a figure that employers say is unacceptable. The Bangladesh Garment Manufacturers and Exporters Association had proposed a minimum wage of 4,200 takas, or $54, on Friday, prompting a fresh round of discussion before coming up with the 5,300 takas.
The six-member wage board, which is made up of representatives of the government, labor and the BGMEA, has been attempting to negotiate a rate that would be acceptable to the different stakeholders.
“The board proposed this amount considering the present reality both from the point of owners and workers,” said A.K. Roy, chairman of the wage board.
RELATED STORY: WWD CEO Summit — ‘Bangladesh: The Fallout’ >>
After the BGMEA made its latest proposal on Friday, workers again staged protests, with blockades on the highway on Sunday as well as violent attacks on factories. Meanwhile, employers feel that this amount is higher than what they can factor into their budgets.
The wage board’s proposal on Monday was met by the garment industry with a mixture of silence, relief and downright disapproval and threats of protest.
“It is a reasonable increase, and the workers’ representative should be happy with this,” Rubana Huq, managing director of the Mohammadi Group, said. “The wage market is not standardized in Bangladesh, and many sectors draw a lot less, and many don’t even have a minimum wage ceiling.”
Industry analysts said the final number will be approved by the Ministry of Labour and Employment, which could have a say in raising or lowering the proposed amount. Given that elections in Bangladesh are coming up in the next three months, the government must factor in the financial support of the business community as well as a large mass of votes from the four million workers employed by the garment industry, according to analysts.
The wage has been calculated to include various expenses, including 3,200 takas as the basic salary, 1,280 takas as house rent, 300 takas for food subsidy, 320 takas as medical expenses and 200 takas for transport.
Wages were last increased in 2010, when they went up from 1,662 takas ($21.39) to the present 3,000 takas ($38.62).
Reactions to the plan will be tempered over the next few days by the 60-hour shutdown that has been called by the opposition — the Bangladesh Nationalist Party, led by Khaleda Zia. Government officials told WWD that they were hoping for more temperance from both sides.
The wage increase was partially based on a visit to Cambodia and Vietnam that representatives of the board took in October. Organized by the International Labor Organization, “the study tour was a good opportunity for us to better understand each other’s arguments,” said Fazlul Haque Montu, executive president of the Jatiya Sramik League, who is a member of the board.
The minimum wage increase is expected to become effective as of Nov. 1.