Minimum Wage ‘Mockery’: Bangladesh Unions Pan Paltry Pay Proposal

Trade unions representing Bangladesh garment workers say the latest minimum wage proposal makes a “mockery of their demands.”

Submitted during the fourth round of wage negotiations Sunday in the capital city of Dhaka, the monthly minimum of 10,400 taka ($94.34) suggested by garment manufacturers factors in searing inflation and shrinking orders from Western brands.

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That’s just a modest increase over the current 8,000 taka ($72.58) standard, and a far cry from the 23,000 taka ($208.62) that unions demand.

Sirajul Islam Rony, the workers’ representative at the minimum wage board, proposed 20,393 taka ($184.95), nearly double what the manufacturers put forth but still too low by most union estimates.

At stake are the wages of more than four million workers—more than 80 percent of whom are women—in Bangladesh’s apparel export industry, the world’s second largest after China.

Although six months passed since the wage board formed, the usual deadline to submit wage proposals, neither party had come up with a number until last week.

Both sides are well aware that they have their work cut out for them.

Wage board chairman Liaquat Ali Mollah reportedly said the parties will have to narrow down the “quite wide” gap separating workers and employers by the time they meet again for the next session on November 1.

Workers have organized protests in recent weeks, denouncing the manufacturers’ minimum wage proposal as a “mockery” and referencing research on the pay issue by the Bangladesh Institute of Labour Studies (BILS), Dhaka-based think tank studying union and related matters.

Manirul Islam, BILS deputy director, told Sourcing Journal that the institute carefully calculated its minimum wage proposals in its report, “Mind the Gap, A study on garment workers in Bangladesh” and a separate update in the policy brief, “RMG Sector Minimum Wage: Proposition, Calculation and the Rationale.”

BILS recommends location-based minimums. It suggests 22,850 taka ($216) for Dhaka, 21,000 taka ($198) for satellite cities, and 20,400 taka ($192) for Chattogram.

These average out to 21,415 taka, or $202, Islam said, adding that the report follows a considered minimum wage calculation.

Referring to the manufacturers proposal of 10,400 taka ($94.34), he said that 2018’s minimum wage of 8,000 taka was equivalent to $98 at the time (when the taka was approximately 82 to a dollar.)

Since then the taka has lost value, and the wage being proposed is actually less than the $98, coming down to an approximate $95 (the taka is approximately 110 to a dollar.)

“Meanwhile, the apparel growth has been remarkably high,” Islam said, citing 35.44 percent growth in just the fiscal 2021-22 year alone. “Our estimate suggests that export earnings ratio per worker has been more than double [in] the last five years only.”

Meanwhile, a recent study by think tank Centre for Policy Dialogue calculated a minimum wage of 17,568 taka ($159.35), which manufacturers dismissed as impossible to meet. They cite global volatility, orders trickling in, gas and power tariff hikes, high inflation and uncertainty over what lies ahead. Many have invested in factory safety, giving Bangladesh 157 LEED certified factories.

Both workers and employers agree that factories should carry subsidized groceries on premise to help workers cope with food inflation and easily access necessities.

Major global brands including Adidas, American Eagle Outfitters, Gap Inc., Hugo Boss, Levi Strauss & Co., Lululemon, Patagonia, Puma, Calvin Klein owner PVH Corp. and Under Armour have supported the call for higher wages and inclusive purchasing practices.

But the brands that stay silent on Bangladesh’s wage woes are urged to do more.

“Brands’ failure to commit to increasing their purchasing prices in line with a wage increase to 23,000 Tk could result in the adoption of the outrageously low employers’ wage proposal of just 95 USD per month,” said Anne Bienias, living wage coordinator at Clean Clothes Campaign. “The silence of buyers encourages employers to continue violating the human right to a living wage that ensures workers and their families a life with dignity. Living wage commitments by brands that refuse to listen to trade unions’ desperate call for support clearly cannot be taken seriously.”

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