Pros and cons of wage hike for apparel workers in Bangladesh


The government has announced Tk 8,000 as minimum monthly wage, up from existing Tk 5,300, for the country’s readymade garment workers amid protests from labour groups demanding higher pays.

Both the factory owners and labour rights groups have expressed their dissatisfaction over the wage although the owners’ and workers’ representatives to the minimum wage board are said to have agreed on the amount.

On September 13, state minister for labour Md Mujibul Haque announced the wage at a press conference at the secretariat following the fifth meeting of the minimum wage board held at the board’s Topkhana Road office in the capital.

In the new minimum wage, basic was fixed at Tk 4,100 up from the existing Tk 3,000, house rent at Tk 2,050 up from Tk 1,200, medical allowance at Tk 600 up from Tk 250, transport allowance at Tk 350 up from Tk 200 and food subsidy at Tk 900 up from Tk 650.
Immediately after the announcement of the new minimum wage, most of the garment sector trade union leaders rejected the amount, demanding Tk 16,000 instead.

The leaders of garment factory owners apparently have accepted the minimum wages but indirectly expressed dissatisfaction saying that they are not yet ready to allow minimum wages more than Tk 7,000.

During the announcement of the wage, the state minister said that prime minister sheikh Hasina proposed Tk 8,000 as minimum wage for the garment workers and all the parties in the minimum wage board agreed to it as the representatives of workers and factory owners to the board failed to reach a consensus over the minimum wage.

He said that after forming the minimum wage board for the RMG workers in January, the board held few meetings but failed to reach any consensus over the minimum wage. Factory owners were not willing to increase the wage beyond Tk 7,000 while workers representative would not accept anything below Tk 12,000.

Against this backdrop, he said, the prime minister sat with the owners and workers representatives and proposed Tk 8,000 as minimum wage for the RMG workers.

‘The prime minister has made a realistic decision over the minimum wages for the garment workers and I hope all the workers and workers’ leaders will accept the amount,’ Mujibul said.

Syed Aminul Islam, chairman of the minimum wage board, narrated how the uncompromising stance of the two sides caused a standstill in the negotiation process of the wage board as owners and workers representatives could not agree to any review of their wage proposals.
At one stage, he said, the factory owners expressed their willingness to discuss it with the prime minister and after the discussion they agreed to increase the minimum wage to Tk 8,000.

In the fifth meeting of the wage board, he claimed, the workers representative also agreed to the owners’ proposals and the board finalised the recommendations on minimum wages of garment workers unanimously.

Md Siddiqur Rahman, factory owners’ representative to the wage board, said in the press conference that they agreed to the directive of the prime minister and the new minimum wage would come take effect in December.

Following the announcement of the wage, coordinator of Garment Sramik Odhikar Andolan, a platform of 12 labour organisations, Mahbubur Rahman Ismail said that they would stick to their demand for a minimum wage of Tk 16,000.

Rejecting the new wage, Garment Workers’ Trade Union Centre general secretary Jolly Talukder said that the wage board announced an unrealistic and unfair wage, deceiving the workers.

The government on January 31 issued a gazette notification announcing the name of the owners’ and workers’ representatives of the board to review the monthly minimum wages for garment workers of Tk 5,300, which was set in 2013.

In the third meeting of the board on July 16, the factory owners’ representative formally proposed Tk 6,360 as the minimum monthly wage for RMG workers, while the workers’ representative proposed Tk 12,020.

In the fourth meeting on September 3, the minimum wage board requested the representatives to reconsider their respective wage proposals
to reduce the gap.

Following the decision of the wage board, BGMEA on September 9 arranged an emergency general meeting of its members and sought their opinion over the revision of wage proposal.

Factory owners gave the mandate to the BGMEA leaders to review the wage proposal and demanded that the government must give them tax or cash incentives for increasing wages of the workers.
On the day, the government reduced source tax for the RMG sector to 0.60 per cent from one per cent and corporate tax to 12 per cent from 15 per cent.

The first meeting of the wage board was held on March 19 and two groups of trade union platforms held separate demonstrations in front of wage board office demanding Tk 16,000 and Tk 18,000 as minimum wage respectively on the day.

During the meeting, Garment Sramik Odhikar Andolan, a coalition of 12 garment labour unions, and Garment Sramik Trade Union Kendro submitted memorandum to the wage board chairman demanding Tk 16,000 as minimum wages for the RMG workers.
At the same time, Garments Sramik Karmachari Oikya Parishad, a platform of 22 labour unions, held demonstrations in front of the wage board demanding Tk 18,000 as minimum wages for garment workers.

Faruque Hassan, senior vice-president of Bangladesh Garment Manufacturers and Exporters Association, told New Age on Monday that considering the economic situation of the country and prices of products in the global market, the demand of Tk 16,000 as minimum wage was not logical and it would put the factory owners in great difficulty.

‘Before placing any demand,’ he stressed, ‘you have to consider that an entry level worker will get Tk 8,000 while the skilled workers will be paid more. Besides, Bangladeshi garment factory owners increased many other facilities for the workers in the last five years.’
He observed that Bangladesh would have to go for high value added products to remain competitive in the global market as the minimum wage and cost of doing business increased.

‘For managing orders of high value added products, the sector will need skill training of its workforce and we have to pay more for the skilled workers,’ Faruq argued.

He said that Tk 8,000 a minimum wage would pose many difficulties for the RMG sector and the government should provide support to the sector.

Meanwhile, commerce minister Tofail Ahmed on Sunday said that the government was mulling over more benefits for the country’s readymade garment sector so that the sector remained competitive in the global market as the worker wages increased to Tk 8,000 from Tk 5,3000.
The minister, addressing a dialogue titled ‘Policy Framework for post-LCD Graduation of Bangladesh: Business Perspective’ at Hotel Sonargaon in the city, said that the prime minister had discussed with him how the government could provide more support to the RMG sector as the workers’ minimum wages increased.

‘I would be happy if the workers’ minimum wages was set at Tk 12,000 but I am not unhappy with Tk 8,000 set by prime minister Sheikh Hasina,’ workers’ representative to the wage board Shamsun Nahar Bhuiyan told New Age.
‘I kept to my demand for Tk 12,020 as minimum monthly wage but considering the practical condition of the sector, I compromised… I would like to congratulate prime minister who finally interfered and made the decision,’ she said.
Shamsun Nahar also said that if the workers and their leaders were united, strong negotiation was possible for setting an increased amount of minimum wage.

The first minimum wage board for garment workers was constituted in 1994 that had fixed Tk 940 as minimum wage per month and the second one formed in 2006 had fixed the minimum wage at Tk 1,662.50 while the third board formed in 2010 had set minimum wage at Tk 3,000.

Categories: Apparel, Asia, Bangladesh, Business

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