BGMEA urges brands, retailers and buyers to adjust prices in line with new wage policy

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has urged all brands, retailers and representatives of esteemed buyers to adjust/up-charge prices of all goods to be shipped from December to cover the increment in wage component.

According to the labour ministry's announcement on 7 November the new minimum wage, the gross salary of the 7th grade workers is set at Tk12,500, a 56.25% increase of the gross wage while the basic wage has gone up by 63.41%.

So, to ensure uninterrupted and smoother operation in the industry, it is important that prices of all goods which will be shipped from 1 December 2023 are duly adjusted /up-charged covering the increment in wage component, BGMEA President Faruque Hassan said in a letter addressed to all brands, retailers and representatives of esteemed buyers.

Furthermore, from now onward, all business negotiations and deals will have to be made adhering to the new minimum wage policy, reads the letter published on 8 November.

Exporters urge buyers to pay more for future orders considering workers' living costs

"With every effort and action we take, we mean to complement our long-term goal, which is to grow mutually and sustainably. We are working with our government relentlessly to ensure a more favourable environment for business," said the BGMEA president.

The Government of Bangladesh declared the new minimum wages for garment workers on 7 November. The declaration was made based on the proposal submitted by the Minimum Wage Board, which was widely consulted and agreed upon by the stakeholders including workers' and employer's representatives.

The new minimum wages came at a time when the global economy is passing through an unprecedented time, along with the economy.

"The RMG industry in Bangladesh is feeling the heat of this crisis, especially with soaring inflation all our input costs have increased significantly including fuel, gas, electricity, transportation, etc. From the first of July this year the Bangladesh Bank has increased interest rates which made trade and investment finance more costly," reads the letter.

The raise in the minimum wage, especially a 63.41% raise in the basic wage leads to higher benefits for the workers in terms of overtime benefits, earned leave encashment, festival bonuses and other allowances. The implementation of the new wage structure would exert a huge financial impact on the factories. This will be challenging for many of the factories to implement the new wage in the current economic and financial circumstances, said Faruque Hassan.

"However, ensuring decent living for the workers also is a top priority for us, as well as for global brands and retailers. Since we have accepted the new minimum wage, we will ensure implementation of it, and we need your support in terms of responsible purchasing practice," he added.