Readymade garment workers have expressed utter disappointment as the apparel sector owners’ representative proposed Tk 10,400 as monthly minimum wage at the fourth meeting of Minimum Wage Board on Sunday.
Since the beginning of last year, workers have been demanding Tk 23,000 as monthly minimum wage considering high inflation in the country, but their representative has proposed Tk 20,390 as minimum wage.
Both the parties, however, agreed to reduce the grade from existing seven to five in the new wage structure, which is likely to be announced this November and it will be effective from next January for five years as per the Bangladesh Labour Act.
“It is disappointing to us that the owners have proposed Tk 10,400 as minimum wage at a time when the prices of almost all commodities rise two-threefold. In the 2018 wage structure, the government hiked wage by 60 per cent than earlier. But now they proposed a 30 per cent hike,” Robiul Islam, a senior operator of a Dakshin Khan area’s garment factory, told The Business Post.
Sounding a warning that they will take to the streets if they are deprived of labour rights, he said, “The owners must have to consider our demand. We came to know from our union leaders that their proposal is less than the existing wage considering foreign currency [government fixed $100 as minimum wage in 2018 when the rate was Tk 80 which is now Tk 110.5].”
On April 9 this year, the Ministry of Labour and Employment formed a four-member permanent new wage board, headed by Senior District Judge Liaquat Ali Molla, to review RMG workers’ wages.
The other members of the board are: Employers’ representative Moksud Belal Siddiqui, workers’ representative Sultan Ahmed, and independent member Professor Md Kamal Uddin. Former BGMEA President Siddiqur Rahman and worker leader Sirajul Islam Rony are non-permanent members of the board and representing the owners and workers respectively.
The proposal
As both the parties failed to propose wage structure in the first three meetings, owners and workers’ representatives put forward their proposal on Sunday. All the six members of the board were present in the meeting.
Meanwhile, trade unions individually submitted wage proposal to the wage board and demanded Tk 23,000-25,000 as minimum salary considering high inflation and workers’ better life.
Besides, the Centre for Policy Dialogue (CPD) recently recommended Tk 17,568 as monthly minimum wage for the RMG workers against the backdrop of skyrocketing inflation.
The think tank said that it will be possible for a garment factory to execute this plan if the buyers hike the cost of manufacturing (CM) by just $0.07.
In the written wage proposal to the wage board, workers demanded Tk 12,462 as basic and Tk 20,393 as gross salary for an entry level worker. The figures were Tk 4,100 and Tk 8,000 in the last wage structure respectively.
They also demanded Tk 13,708 as basic and Tk 22,262 as gross salary for grade 4 such as ironman and cutter man. The wages were Tk 4366 and Tk 8,399 in the 2018 wage structure. For grade 3, they demanded Tk 15,079 as basic and Tk 24,319 as gross salary which were Tk 4,670 and Tk 8,855 in the last wage structure.
For grade 2, workers demanded Tk 16,586 as basic and Tk 26,579 as gross salary, which were Tk 4,970 and Tk 9,245 in the last wage structure. For grade 1, workers demanded Tk 18,245 as basic and Tk 29,068 as gross salary. The amount was Tk 5,152 and Tk 9,578 in the last wages structure.
In addition, workers’ representative demanded 10 per cent yearly increment which is now 5 per cent, auto grade promotion after every two years, 6-month maternity leave instead 4 months, two festival bonuses every year and the amount will be minimum one month basic salary for more than six months’ working period, and 15 days’ basic for less than six months.
They also demanded implementation of rationing system for RMG sector workers, providing education bonus for workers’ children, and gratuity for RMG workers.
On the other hand, owners proposed Tk 5,330 as basic and Tk 10,400 as gross salary for grade 5, Tk 5,700 as basic and Tk 10,955 as gross salary for grade 4, Tk 6,090 as basic and Tk 11,540 as gross for grade 3, Tk 6,500 as basic and Tk 12,455 as gross for grade 2, and Tk 6,930 as basic and Tk 12,800 as gross salary for grade 1.
In the written paper, owners’ representative Siddiqur Rahman said that the wages should be set considering owners and workers’ interests. Due to the Covid-19 pandemic and ongoing Russia-Ukraine war, the world faces severe economic crisis, and these impacted their business. They made the proposal, and believed that this will help protect the interests of both the parties.
Workers’ representative Sirajul Islam Rony told The Business Post, “Wages should be set based on workers’ livelihood. Our labour law’s section 141 states that during the fixed wages, the board must consider workers’ life expense and living standard. We submitted our proposal assessing everything.”
Citing the owners’ proposal contradictory of the labour law Rony said, “Owners must have to increase their proposed figure. I think that they will do this.”
Owners’ representative Siddiqur Rahaman also said, “We have already proposed to increase wages by 30 per cent assessing inflation in last five years. And how much we can afford?”
Refuting the claim that proposed wages are less than previous wage structure considering the USD rate, he said, “We are receiving our export proceeds through taka, not USD. So, assessment should be based on local currency.”
Wage scenario in Bangladesh
An analysis of wages paid by different RMG exporter nations show that Bangladesh pays one of the lowest monthly wages to its workers. China pays a minimum $161 in RMG worker wages, while India pays $165, Vietnam $191, Pakistan $110, and Cambodia $200.
Bangladesh had fixed $100 or Tk 8,000 in 2018 as monthly wages for RMG workers. Due to depreciation of the local currency, the wages now amount to $74.5 per month, show central bank data.
Bangladesh’s development partners had earlier said the country should move away from the low wage trap after graduating from Least Developed Country (LDC) status, as the existing minimum pay for RMG workers is not nearly enough to cover skyrocketing living costs.
Leading 15 US clothing brands, have written to the Prime Minister of Bangladesh recommending a hike in minimum wages for readymade (RMG) garment workers, to a figure that are sufficient to cover basic needs, provide discretionary income, and takes into account inflationary pressure.
Besides, on September 12, the Action, Collaboration, Transformation (ACT), a joint initiative between 19 international garment brands and retailers and IndustriALL Global Union, sent a letter to the BGMEA, EPB and Minimum Wages board to support the development of living wages in the RMG sector.
