Pressure for wage hike mounting on RMG owners

With prices of essential commodities skyrocketing, RMG workers' demand for pay raise is increasing day by day – one year before the due time for wage restructuring according to the labour law as the last wage board for the RMG sector was fixed in December 2018.

Labour leaders say the movement for a pay hike may spread to other industrialised areas of the country.

A section of factory owners and labour leaders are smelling a conspiracy behind the sudden labour unrest demanding a pay raise.

But workers say they are having a hard time coping with rising commodity prices. Therefore, they are urging a review of the existing wage board.

Meanwhile, the IndustryAll Bangladesh Council, a platform of one of the most influential labour federations in the country, which is affiliated with around 18 labour federations, has written to the government twice demanding an increase in wages for garment workers.

The letter, sent at the end of March, highlighted the current state of living conditions of workers and noted that labour unrest could escalate at any time.

According to the Bangladesh Bureau of Statistics (BBS), inflation has risen by almost 20% in the three-and-a-half years from January 2020 to April last year, following a rise in wages for workers in the sector. Although labour organisations claim, this rate is much higher.

RMG entrepreneurs are feeling the pressure already when it comes to increasing the wages of the workers anew.

At present the minimum wage of garment workers is Tk8,000 per month.

Shovon Islam, managing director of Sparrow Group, which exports garments worth about $200 million a year and employs about 14,000 workers, told The Business Standard, "Inflation has increased, true, so has worker wages."

He also said that, "The price of the product is not increasing according to the production cost. Orders are already declining in the coming months. In such a situation, we cannot take the burden of raising wages anew. It would be suicidal."

He cited a source close to the CEO of Walmart, one of the largest brands in the United States, as saying that the United States now has an inventory of 6.5 billion pieces of clothing.

"The workers in my factory get an average salary of Tk 12,000 a month, more than the government announced wages," he added.

Fazlee Shamim Eshan, managing director at Fatullah Apparel, a Narayanganj-based knitwear factory, told The Business Standard that the demand for workers' wages was reasonable at a time when commodity prices were rising.

"But the current Russia-Ukraine war has turned the tide. Order flow has decreased. We can't even ask them for extra prices," he said.

"It is the responsibility of the government to support the low-earners. They need to be provided food at subsidised rates. But the factory owners can't bear the pressure," he added.

What the labour leaders say:

The workers involved in the road blockade in Mirpur on Sunday, the second day after the unrest started on Saturday, have been demanding an increase in wages.

Md Sabuj, a worker of Snowtex garments told the media that the salary they are getting from 2019 did not increase a single penny in the last four years.

"We are getting the same salary from 2019 but the household cost and commodity prices have doubled within this time," he added.

Labour leader Nazma Akter, president of the Bangladesh Sammilito Garment Sramik Federation, told The Business Standard, "You all know how much commodity prices have risen in the last three years. Workers are not able to run their families even after working 14 hours. Salary needs to be increased."

What does the labour law say:

The existing Labour Act of 2006 (amended in 2018) provides for a review of workers' wages every five years. The last minimum wage board for garment workers was formed in 2018 and implementation started in January 2019.

However, through the amendment of the law in 2013, which in section 140 (a) states that in special circumstances, the government can review even before five years if it wants.

There are examples of this in the past. Workers' wages were increased in 2013, three years after 2010.

The first minimum wage in the RMG sector in Bangladesh was formed in 1984 at Tk560. So far, the wages of workers in this sector have been revised a total of 6 times. The latest minimum wage is Tk8,000.

According to Statistia's data of December 2021, Bangladesh has the lowest wage among the seven countries. Pakistan, Sri Lanka, India, Myanmar, Cambodia and Indonesia were respectively above Bangladesh.