Poverty Wages No More: Time for a Real Wage Increase in Bangladesh!

photo credit: newagebd.com

Factory owners say a dollar an hour is too much to pay the people who make our clothes

On August 29, the Minimum Wage Board for Bangladesh’s garment industry will come together to set the new minimum wage for an industry that employs four million people. Garment workers in the country have been demonstrating for a desperately needed increase in the minimum wage since 2016. In the course of these peaceful protests, more than 1,500 workers were fired by factory owners in retaliation, and hundreds of workers faced unsubstantiated criminal charges. During December 2016 to February 2017, 34 garment workers, union leaders and labor rights advocates were arrested on falsified charges and jailed as part of a crackdown on dissent. Despite these protests, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has most recently proposed a wage increase of only 1,060 taka, or about $12 US dollars per month.

Bangladesh is notorious for some of the lowest wages in the global garment industry. The current minimum wage of 5,300 taka (US $63) per month hasn’t been adjusted since November 2013, despite the cost of living increasing significantly. Workers’ groups are calling for a monthly 16,000 taka (US $191) minimum wage. Currently, many Bangladeshi garment workers earn less than the 2016 World Bank poverty line wage for the country at 7,418 taka/month (US$87). To rise above that poverty line, the current minimum wage would need to increase by more than 230 percent.

In Bangladesh, minimum wages are set at the industry level, and there is no national floor wage; for instance, the minimum salary for a sweeper on the government pay scale is 15,250 taka (US $180). In the garment industry, the Minimum Wage Board convenes to review the wage every five years. The board, comprised of representatives from employers, the government and trade unions, is already facing a fraught negotiation process. The Bangladesh council of the global trade union federation IndustriALL, on behalf of 16 trade union federations, submitted the name of their preferred representative for workers in the negotiations. But when the government formed the board in January 2018, they instead installed the women affairs secretary of Jatiya Shramik League, Shamsunnahar Bhuiyan, as representative. Bhuiyan was a controversial appointment to the board, given that she has never represented workers in negotiations prior to this position, and that she was not the person recommended by the unions. Her presence puts the meager proposal by the Board in context.

Industry groups and their supporters have raised the need for Bangladesh to remain competitive in the global apparel industry, and insist raising wages will hamper that effort. Factory owners point to downward price pressure created by major clothing brands seeking the cheapest possible production price as a reason for no more than a meager increase. It’s true that it is critical that international brands step up and pay rates that allow factory owners to pay workers a living wage. Their failure to act, however, doesn’t release the Bangladesh government from its obligation to raise the minimum wage to a level where workers can survive. The raise proposed by the BGMEA doesn’t even keep up with price inflation and even fails to fulfill the basic legal obligations of employers. According to the Bangladesh labor law, the minimum wage should be increased by 5% every year. Yet, there have been no adjustments to the wage level since the last minimum wage hike in 2013 and the new wage proposed by the Minimum Wage Board falls short of a 5% per year increase.

The lifetime earnings of a garment worker in Bangladesh are equivalent to four days of earnings by CEOs of leading fashion brands, according to a report by Oxfam. At the new wage proposed by the Minimum Wage Board, the workers responsible for 80% of Bangladesh’s export earnings can barely afford to support themselves, much less their families. The inequity between the acceptable standard of living for garment workers and for their companies’ apparel executives is nothing short of grotesque. And consumers, once they learn that workers are merely demanding a new wage of $1 per day, will stand for nothing less.