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DHAKA – The Bangladesh Minimum Wage Board for readymade garment workers has set Tk8,000 (US$95) as the new minimum monthly salary. State Minister for Labour and Employment Md Mujibul Haque Chunnu made the announcement at a press briefing in his Secretariat office on Thursday. Employees will start receiving the new level in December 2018. The rise represents a 53 per cent increase, albeit the last rise in wages workers received was five years ago.

In 2013, the minimum wage was fixed in Bangladesh at 5,300 BDT (US$62) per month, which was an increase from 3,000 BDT (US$35) which had been adopted in 2010. This time around, unions were asking for 12,020 BDT (US$142) while employers had proposed an increase to a minimum of 6,360 BDT (US$75).

Oddly, we believe both unions and employers groups will be disappointed with the wage rise. Unions had claimed that a rise to US$142 was required to meet increases in living costs, while employers will argue that the new wages will deter inward investors, who see Bangladesh as a safe bet for low cost sourcing.

There are a couple more things to consider. Firstly, why not put the figure at a more headline-grabbing US$100 per month? Hitting three figures might have been enough to ward off the inevitable union backlash.

Secondly, the issue once again raises the question of why wage reviews take place only every five years. Such an archaic way of doing things only serves to increase frustrations and tensions on both sides. Moreover having waited that long, workers are now told they will not see any more in their pay packet until December.

There has to be a better way of doing things.

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