DHAKA – Bangladesh garment factory workers appear on the bring of major revolt after factory owners offered them a Tk 6,360 (US$75) monthly wage – massively short of the Tk 16,000 (US$163) many were demanding. The current minimum wage of 5,300 taka (US$63) has not increased since 2013.
The snub from Bangladesh Garment Manufacturers and Exporters Association President Siddiqur Rahman is likely to raise tensions further among the workforce which has become increasingly politicised in recent years.
The existing minimum monthly wage of Tk 5,300 or US$65 came into effect from 2014. The government formed a panel which included a representative each from the BGMEA and a labour organisation to its existing four-strong permanent wage board earlier this year. However, there are now claims that the workers’ representative, who proposed a Tk 12,020 minimum wage with Tk 7,050 as a basic salary, was a government stooge.
A final decision on the minimum wage is expected in the next three months.
While the offer of a relatively small increase in wages may seem paltry – particularly after five years – it also needs to be borne in mind that many factories are operating on very tight margins. The broader issue, for us, is one of brands and their sourcing teams. We interviewed Siddiqur Rahman earlier this year and he reinforced the point about the power imbalance between brands and their Bangladeshi suppliers.
He said: “Given the nature of the industry, volume of production and type of products we manufacture, we are still price taker. So in this buyers’ dominated market where we have less innovation, our capacity is mostly in volume-driven, it’s the buyers who set the price.
“If you look at the price trend of the retail market over the last 20-30 years, you will see price is declining every year. Here the pressure is passed onto the manufacturers. Now is the era of fast fashion, super market, hyper market where competition is very stiff. Price is being decreased to attract consumers. So there is a race to the bottom in terms of product price. It’s a buyers’ market where we have to follow the terms buyers are setting and buyers are setting price depending on the trends and nature of the market.”