Bangladesh Wages May be Set to Double

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Area of Dhaka, the Capital of Bangladesh

The Bangladesh Garment Manufacturers and Exporters Association wants to establish more reasonable wage standards for the country’s ready-made garment sector—and any potential shifts could come with a wage hike, too.

The BGMEA has asked the government to form a wage board for workers in order to review existing rates, establish a monthly minimum wage, and potentially create a framework for more regular increases.

Workers’ wages in Bangladesh haven’t increased from the current 5,300 taka ($63) rate that took effect in 2013.

That fact has led to sporadic unrest over the years, and that coupled with its ongoing factory safety concerns have led entire regions to take caution where Bangladesh is concerned. The European Union has urged Bangladesh often over the course of this year to improve its working conditions, or else face forfeiting its duty free access to the region under the Generalized System of Preferences (GSP) trade privilege program. In December last year, workers in the Ashulia area went on strike demanding a threefold increase to their wages, which, for many, ended in pink slips rather than paychecks. The unrest forced some factories in the region to shutter for a week, leaving production orders piling up.

Bangladesh has faced ongoing scrutiny since the Rana Plaza building collapse in 2013, and many remain divided over how much progress the country has made since then. The move to establish a wage board is expected to help settle the minds of some who still believe the garment sector in Bangladesh to be unstable.

[Read more about Bangladesh: Alliance Says Bangladesh Factories “Demonstrably Safer” Than Pre-Rana Plaza]

In a letter to the labor ministry, BGMEA president Siddiqur Rahman wrote, “…Despite adverse situation the sector is currently undergoing, we have made request to take necessary measures to form minimum wage board for re-fixing the minimum wages for garment workers in line with the provision of the labour law and to uphold our image both at home and abroad,” according to RMG Bangladesh.

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Wages in Bangladesh’s Garment Sector Could Triple This Year

Rahman reportedly went on to note that the ready made garment sector in Bangladesh has dedicated significant funding to improving workplace safety and that production costs have increased 18 percent in the last two years, while garment prices have been down trending, which has forced many factories to close.

“It has become difficult to be competitive due to a strong appreciation of local currency against U.S. dollar whereas competitors’ currencies depreciated with various supports coming from their respective governments,” the letter continued, according to RMG Bangladesh. “It is the responsibility of the factory owners to negotiate the product prices with buyers and they can’t just pass their failure on to the workers.”

For now, the first fix the BGMEA is focusing on, is getting a reasonable wage set—though there seems to be concern the government will fix a wage that doesn’t factor in the current cost of living.

The BGMEA is urging that the current wage be doubled in line with the rise in cost of living since 2013, which would bring the wage rate in the country to 10,600 taka, or $126 a month at current exchange rates.


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