Bangladesh’s Wage Protests, Explained
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As thousands of workers continue to spill into the streets of Bangladesh in protest of the impending minimum wage increase, Miran Ali, an executive of the South Asian nation’s trade group for garment manufacturers and exporters, wants to correct some misconceptions.
The 10,400 Bangladeshi taka ($93.98) floor wage that the factory owners have proposed and demonstrators are clamoring against, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) vice president told Sourcing Journal, is not their final offer.
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“This year has been no different from any previous years,” Ali said of the negotiation process, the first since 2018, when the minimum wage was set at 8,000 taka, which at the 2023 dollar value was worth $177, but is now the equivalent of $72.29 because of currency depreciation.
“It works the same way, where the owner side gives a proposal, which may or may not be a lowball figure,” he said. “And the worker side gives a counter proposal that is usually much higher than they expect to get. We then have a second or third meeting where we come to a compromise between those two numbers.”
On Wednesday, however, a fifth wage board meeting failed to come to an accord, despite union representatives dropping their demand from 23,000 taka ($207.85) to 20,393 taka ($184.29).
While the issues stoking the current situation are manifold, Ali said, chief among them is the fact that simmering political tensions over the country’s upcoming general election have finally come to a boil, with anti-government demonstrators taking to the streets of Dhaka this week to call on Prime Minister Sheikh Hasina to cede her power to a neutral government that can oversee the polls.
Some of that conflict is getting conflated with the current worker unrest, he said.
“I’m not going to comment on the electoral process; that is not relevant to our business,” Ali said. “What is relevant, however, is that it is having an effect on us in the sense that when we are seeing pictures of hundreds of workers protesting on the streets. I know for a fact that in many cases, those weren’t workers at all, they were political activists.”
Also not helping, he said, are the “deliberately unnecessary rumors” being posted on social media—Facebook, in particular—proclaiming the 10,400 taka figure to be the factory owners’ last proposal. Those rumors then spread like wildfire.
“That was what set it off; they thought it was fixed,” Ali said. “There’s a lack of trust—that is what we need to deal with.”
Ali said that the next wage board meeting is scheduled for Nov. 7, though unless tempers have cooled, this is likely to be less of a negotiation than an argument. But if calmer natures prevail, he expects to have a new minimum wage finalized by mid-November and going into effect by Dec. 1.
That’s not to say that there hasn’t been progress. At the most recent meeting, factory owners agreed to reduce the grading system that decides the pay scale from the existing seven to five, with workers arguing that having so many grades only created confusion.
And while there is a general consensus that the 4.1 million people who toil for the world’s second-largest exporter of clothing after China cannot afford to live on their poverty salaries, particularly as inflation continues to spiral upward, workers say they understand that suppliers also feeling the squeeze from declining orders and their own skyrocketing costs.
“Wages should be increased so that a worker can live well with his family, but manufacturers must also be able to afford wages and not shut down the factories,” said workers’ representative Sirajul Islam Roni, who was present at the negotiations. “We have to consider the current industry capacity amid the global economic turmoil.”
Unless Western brands and retailers change their purchasing practices, many say, the math will never add up.
“Day by day, buyers are reducing the price of products. And the workers have to increase the salary and allowances; how will the garment owners run their factories?” Uzzal Chakraborty, manager of BS Apparels in Dhaka, told Sourcing Journal. “To keep this garment sector alive in Bangladesh, buyers must increase their prices. Now if the buyers do not increase the price of their products, the bank loan will burden the factory owners.”
In a study published in January by the University of Aberdeen Business School and the fair-trade nonprofit Transform Trade, 76 percent of the 1,000 Bangladeshi manufacturers surveyed said they were selling at the same price as they did in March 2020, while 8 percent reported that they were making clothes for less than they cost to produce, even for prominent retailers like C&A, H&M Group and Zara owner Inditex. As a result, nearly one in five said they struggled to meet the existing minimum wage.
Ali, who is also the managing director of Bitopi Group and Tarasima Apparels, both located in Dhaka, agreed. He said that while there have been a number of brands that have been actively “signing open letters and stuff like that,” they are sometimes the same ones that are privately telling their suppliers to bear the cost increases themselves. Only a handful of brands have taken a different tack, Ali said, among them H&M, which has informed its network that it will impose a blanket increase on prices paid to factories whenever the new minimum wage goes into effect, no matter their size or relative importance.
“Other brands, you will hear, ‘Yes, we will discuss with our suppliers and come to an amicable understanding,” he said. “What does that mean? That’s buyer speak for saying, ‘We’re going to call up our suppliers and say, you want a higher price? Well, you better watch out next season.’ And they’ll be like, ‘Oh s*** no, I don’t need a higher price, I’ll absorb it.’”
H&M aside, while most of Bangladesh’s major customers, including Adidas, Gap Inc. and Levi Strauss & Co., which penned a letter to Hasina last month asking her government to determine a minimum wage that will cover garment workers’ basic needs and include some discretionary income, have touted their fair pay commitments, including their participation in voluntary schemes such as IndustriALL Global Union’s Memorandum of Understanding on living wages, or ACT, none responded to Sourcing Journal’s questions about whether they’ll be paying their suppliers higher prices. Only Patagonia has come out publicly in support of the 23,000 taka figure workers initially asked for, though even it too speaks of “long-term partnerships, transparent negotiations and open dialogue” rather than outright committing to shelling out more.
“Brands hold the power to shape the industry, yet they are staying silent,” said Thulsi Narayanasamy, director of international advocacy at the Worker Rights Consortium, a Washington, D.C.-based think tank. “They urgently need to make it clear that they support a wage of at least $215 a month and, crucially, that they will pay suppliers the money that they know they need in order to absorb these costs.”
Though protests have been restricted to the districts of Ashulia and Gazipur near Dhaka, tragedy has already struck as clashes between protestors and security forces escalate and damage to factories increases. Md. Rasel Howlader, a 25-year-old maintenance machinist, was one victim, allegedly shot by police on Monday despite not participating in the demonstrations. Gazipur police would only say, however, that a garment worker was injured during the clashes and died as he was taken to a hospital.
Another man, 32-year-old Emran Hossain, died from suffocation after his factory, ABM Fashion, was torched by arsonists on the same day. It’s unclear if the fire was set by disgruntled workers.
“At this stage, without a proper investigation, it is impossible to know how the fire started,” Bogu Gojdź, public outreach coordinator at the Clean Clothes Campaign, the garment industry’s largest consortium of trade unions and non-governmental organizations, told Sourcing Journal. “The wage protests are coinciding with intensifying political clashes between [Hasina’s] Awami League and [the opposing] Bangladesh Nationalist Party, and we are receiving informal reports of hired agitators in the streets who are not garment workers.”
Gojdź said that the organization maintains its position that the unrest among workers is the product of desperation and a “sign of a lack of confidence in the unjust minimum-wage-wetting process,” one that failed to recognize 23,000 taka as a “legitimate demand.”
“We specifically point towards living-wage-committed brands as complicit in this situation, because despite their code of conduct commitments, they refused to explicitly back the 23,000 taka demand or condemn the outrageous proposal of 10,400 taka tabled by the factory owners,” she added.
Nazma Akter, founder and president of Sommilito Garments Sramik Federation, an IndustriALL-affiliated union to which Howlader belonged, has been trying to gather more information about both deaths but the chaos has been making it difficult.
“It’s a very scary and tough time,” she told Sourcing Journal.
The police have accused protestors of damaging up to 50 factories by smashing windows and destroying furniture. By Thursday, hundreds of facilities were shuttered as a safety precaution, not only in Ashulia and Gazipur but also in Mirpur, Savar and Narayanganj.
“We will have to shut down production and withhold wages if demonstrations like these continue,” said a factory owner, who asked not to be named for fear of backlash.
But workers say they feel helpless and angry, and they’re determined to persist despite efforts by security forces to disperse them with tear gas and rubber bullets.
“It is essential to get our point across, and that we can make a living wage that can cover our costs,” Ruksana Begum, a factory worker, told Sourcing Journal.
Speaking at a webinar on Tuesday by fashion advocacy group Remake, sewing operator Jahanara Begum said that if her salary doesn’t increase, she will have to force her child to forgo school for work in order to meet household expenses.
“The brutality used in quelling legal demonstrations, which has resulted in death, must end immediately,” Christina Hajagos-Clausen, IndustriALL’s director for the textile, garment, shoe and leather sector, told Sourcing Journal. “We call on the government of Bangladesh to ensure the right to democratic protest, and to increase the long overdue minimum wage. Currently, garment workers in Bangladesh do not earn enough to make a living.”
Ayesha Barenblat, founder and CEO of Remake, said that the violence, both real and purported, tells a bigger story.
“You have brands, on one hand, sending these very vanilla letters to the authority saying that we must have a transparent wage process, but we haven’t managed to get a single brand to show solidarity for the letter that we are circulating that shows the 23,000 taka number,” she said. “In many ways, this is a very disingenuous thing to do for brands and retailers to say we support the minimum wage process, but we’re not going to increase our prices. They’re essentially pushing all the costs, all the risks to the manufacturers.”
Narayanasamy said that brands need to ensure that workers are paid in full for the period of any factory closures, and that any charges brought against workers for exercising their right to protest are dropped.
“The factory owners association is threatening not to pay already hungry workers for the past seven days of factory closures which are likely to continue as the wage board moves towards possibly setting a new poverty wage level,” she said.
Narayanasamy was referring to recent comments by BGMEA president Faruque Hassan who said the workers unwilling to continue their jobs and engage in unrest should be subjected to a section of the labor act that includes a “no work, no pay” provision.
“These punitive actions against the workers—violence, threats of shut-downs and even death—are all happening in the name of big brands that have refused to step up and take real responsibility for the routine exploitation of workers,” she added.
Ali said that once matters have stabilized, the BGMEA intends to be more “proactive” and engage with buyers that have not increased their prices.
“You cannot pass the entire burden of the wage increase to factories,” he said. “You cannot use your power to squeeze weaker suppliers and give weaker suppliers less. And whatever you do has to be fair and transparent.”
