Bangladesh: Retailers must help with pay rise

Bangladesh’s clothing factory owners are planning a minimum wage increase of about 50 per cent to 80 per cent and will ask retailers to pay more to defray the cost, as the government tries to end a wave of strikes that hit nearly a fifth of workshops last month.

A worker hangs clothes to dry on the roof of a Dhaka garment factory. Picture: Rafiqur Rahman/Reuters
A worker hangs clothes to dry on the roof of a Dhaka garment factory. Picture: Rafiqur Rahman/Reuters

The world’s second-largest clothing exporter hopes to announce a new minimum wage early next month, bowing to international pressure after a string of fatal factory accidents that thrust poor working conditions and pay into the spotlight.

Workers want the minimum wage, which was last raised in 2010, to go up to 8,000 taka (about £64) a month – which is around two-and-a-half times the current rate.

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Factory bosses have formally offered 3,600 taka (£29). However, several have said they anticipated Bangladesh’s official wage board would set rates in the 4,500-5,500 taka (£36-£44) range, and they intended to seek between 5 per cent and 15 per cent in price rises from retailers.

“These workers’ rights are being discussed all over the world now and the government is nervous,” said Amirul Haque Amin, the head of the National Garment Workers Federation, an umbrella group representing 37 unions. “This has given us the opportunity to raise our voices.”

The wage negotiations must somehow strike a balance between western fashion giants, politically-connected factory owners and protesting staff.

The government did not respond to strikes over wages last year, but since then accidents including the collapse of the Rana Plaza factory complex near Dhaka, which killed more than 1,100 garment workers, have put the authorities on the back foot.

Rock-bottom wages and trade deals with western countries have propelled Bangladesh’s garment sector to become a $22 billion (about £13.6bn) industry accounting for four-fifths of the country’s exports, with retailers such as Wal-Mart and H&M buying clothes from its factories.

Wal-Mart spokesman Kevin Gardner said the retailer “continues to work with other stakeholders in encouraging the Bangladesh government to review minimum wages for workers in the garment industry to ensure worker needs are met”.

H&M said it had urged Bangladesh to raise the minimum wage and revise it annually.

Helena Helmersson, H&M’s head of sustainability, said: “Wages are one of the issues that are at the top of our agenda to drive improvement in the textile industry.”

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The minimum monthly wage for garment workers is 3,000 taka (£24), around half of what those in rival Asian exporters Vietnam and Cambodia earn and just over a quarter of the rate in top exporter China, according to International Labour Organisation data from August. Most Bangladeshis take home at least £33 a month due to overtime pay, according to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

Smaller factories will be hardest hit by the expected wage rise, factory bosses said. Muzaffar Siddique, whose mid-sized factory in Dhaka employs 650 people, said he would have to charge retailers 30 per cent more if wages went up to 4,500 taka.

The government is revising the minimum wage as part of efforts to address the industry’s image problem and hopes to announce the new rate in early November, said Mikail Shipar, the top official at the labour and employment ministry.

Sirajul Islam Rony, a member of the six-person independent wage board, said it was due to announce a figure by next month. It must then be approved by the law and labour ministries.

Garment factory staff went on strike over wages for six days in September, affecting production at almost 20 per cent of the country’s 3,200 factories, according to the BGMEA. The strikes followed similar protests over the summer.

Workers also held a factory owner captive in his office for more than 18 hours earlier this month until he paid bonuses owed to them for the Muslim festival of Eid al-Adha.

“It’s a very simple equation – wherever they get a cheap price, they will go there,” BGMEA president Mohammad Atiqul Islam said of the retailers. “It’s not like they’re here because like the Bangladeshi food.”