Fashion Organizations Lobby for Bangladesh Minimum Wage Increase
Four human-rights multistakeholder initiatives, along with a member of the Netherlands’ largest workers’ organization, have banded together to advocate for a higher minimum wage for Bangladesh’s garment workers.
Amfiori, the Ethical Trading Initiative (ETI), the Fair Labor Association (FLA) and the Fair Wear Foundation (FWF), together with Mondiaal FNV, revealed Wednesday that they have written to Liaquat Ali Molla, the chairman of Bangladesh’s minimum wage board, in support of an increase in the ready-made garment sector’s floor pay, which they said is currently “well below” the rising cost of living in the South Asian nation.
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Together, the organizations comprise 600-plus member companies, including banner names such as Adidas, H&M Group, Gap Inc., Uniqlo parent Fast Retailing and Zara owner Inditex, which source from more than 2,900 Bangladeshi producers within their respective networks.
In the letter, they not only called for a reevaluation of the current minimum wage, but also underscored the necessity of trade union consultation and overall respect for freedom of association and collective bargaining in establishing a new floor.
“Finally, we recognized the importance of responsible purchasing practices by our member brands to ensure there is appropriate cost-burden sharing with suppliers,” they wrote in a joint statement.
“We firmly believe that every worker should earn a living wage,” they added. “We must strive towards its implementation in our members’ global supply chains to enable all workers and their families to break out of poverty and live a decent life.”
Workers in Bangladesh have held innumerable protests over the stalled minimum wage, which hasn’t budged from 8,000 Bangladeshi taka ($73) since 2018. To meet inflationary pressures, which have caused the cost of everything from food to fuel to skyrocket, the country’s unions are currently demanding a hike of 23,000 Bangladeshi taka ($208.70).
Mollah announced earlier this month that new wages for garment workers will be decided by November and rolled out in December.
“The board members will visit small, medium and large garment factories in the country and submit proposals based on their findings,” he told reporters after a meeting of the board, noting that the next one will take place in September.
Wage data from FLA companies, as reported in the organization’s Fair Compensation Dashboard, indicate that average monthly net wages for garment workers in Bangladesh increased by less than 1 percent from 2019 to 2022. Meanwhile, inflation in the world’s second-largest apparel exporter after China climbed to 9 percent over the past year, the highest average inflation rate in 12 years, according to the Bangladesh Bureau of Statistics.
“Wage data collected by our member companies shows clearly that inflation has sharply outpaced wages in Bangladesh the last few years,” Sharon Waxman, the FLA’s president and CEO, told Sourcing Journal. “An inclusive wage-setting process with unions at the table will be critical to achieving a wage that meets the needs of workers and their families.”
Amfiori’s Business Social Compliance Initiative code of conduct and the ETI’s member charter both require signatories to work progressively toward the payment of a living wage that can sufficiently provide workers and their families with a decent standard of living. Similarly, the FLA’s fair compensation strategy includes “goals, tactics and timelines” for member efforts to achieve the same. FWF’s Fair Price app, in the meantime, facilitates shared responsibility between buyers and suppliers by helping ensure that prices adequately cover labor expenses, including wage increases.
The American Apparel & Footwear Association (AAFA), whose roster likewise covers a wide swath of the industry, with many overlapping members, has also stressed the critical nature of actively engaging “true” worker representatives, labor unions and other relevant stakeholders in discussions in order to “promote an atmosphere of open dialogue and inclusivity.”
In a letter to Prime Minister Sheikh Hasina dated July 27, AAFA president and CEO Steve Lamar said that the minimum wage review will provide a “crucial opportunity to address existing disparities and to establish fair remuneration for garment workers.”
“AAFA’s brands are optimistic that the final increased minimum wage reached will properly reflect the severe economic challenges that garment workers have faced over the pandemic, the subsequent supply chain crisis, and the current state of the Bangladesh economy,” he added.
Cambodia recently announced that it’s kicking off wage talks for the garment, footwear and travel goods industry for 2024, though discussions are still in at their earliest stage.
