LONDON – See the table above? There is a direct link between that and the violent clashes between protesting garment workers and police currently being witnessed in Bangladesh. Allow me to explain.
Garment industry unions and rights groups in Bangladesh have recently been calling for an increase in the industry minimum wage from BDT8,000 (US$75) to BDT23,000 (US$215). The government in Bangladesh last reviewed the minimum wage in 2018, when it was fixed at US$75 for an entry-level garment worker.
US$75 to US$215 represents an increase of 187 per cent. While significant, there is some justification for it. The last wage rise was five years ago and since then we’ve had a global pandemic, which saw living costs soar. Unions and labour rights groups have presented compelling reasons as to why garment workers deserve US$215 as a minimum to meet their basic daily needs and other discretionary costs.
Garment factory owners, meanwhile, have proposed a new minimum wage of BDT10,400 (US$94), a 23 per cent rise. This offer has been deemed completely unreasonable by unions and worker rights groups. Consequently, thousands of garment workers have taken to the streets in Bangladesh, and police have taken (at times) violent actions to quell demonstrations. At least two protestors have lost their lives in the ensuing violence and dozens have been injured. The run up to the Bangladesh General Election which takes place in January 2024 is adding political tensions to a fraught situation.
In the meantime, 16 major global fashion brands (and members of the American Apparel and Footwear Association) have sent a letter to the Bangladesh government urging a “transparent minimum wage review that involves all stakeholders and that does not lead to any retaliation.”
The letter states: “The consultations should seek to raise the minimum wage to a level that corresponds with a wage level and benefits that are sufficient to cover workers’ basic needs and some discretionary income and takes into account inflationary pressures. We note that the average monthly net wages for garment workers in Bangladesh has not been adjusted since 2019, while inflation has increased significantly over that time.”
The letter goes on: “We acknowledge that apparel brands and retailers sourcing in Bangladesh have a role to play in enabling the above recommendations. We are committed to implementing responsible purchasing practices to fulfil that role.”
We can deduce a few things from all of this. The first is that garment workers in Bangladesh deserve and need a significant wage rise. In real terms, they have seen a large decrease in their wage levels since 2018, with inflation continuing to erode their (already meagre) spending power.
The offer of US$94 is clearly nowhere near enough. While that figure will almost certainly rise as negotiations continue, it is unlikely to end up anywhere near what workers and unions are demanding.
Garment manufacturers in Bangladesh as well as the country’s influential trade body, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), have been painted in a bad light amid the demonstrations. The wage proposals they have put forward have been described as ‘meagre’ and ‘outrageous’ by the Clean Clothes Campaign.
On the one hand, Clean Clothes has a point. On the other, what choice do factory owners have? Our research into the garment sector of Bangladesh shows that prices paid by fashion brands from the European Union and US to garment factories have remained fairly flat across most garment product categories over the past decade. The EU and US are Bangladesh’s two largest export partners.
In the meantime, manufacturers have faced continuous inflationary headwinds over that period, particularly since the pandemic. Prices have soared for raw materials, energy and logistics. The cost of moving products from A to B went through the roof in 2021 and 2022.
Owners have also been under huge pressure to spend on more sustainable production methods in recent years, purchasing infrastructure for solar electricity, better effluent treatment and so on.
If you own a business and your costs keep increasing while the price you receive for your core product remains flat, you have a problem.
Wages and salaries for factory workers, including sewing machine operators, cutters, and supervisors, often account for a substantial portion of a garment factory’s expenses. Labor costs can be the single largest cost category, especially in labour-intensive garment production.
Against this backdrop, does it seem realistic that garment factories will be able to afford a 187 per cent increase in wages for garment workers? Should NGOs have a little more understanding of the commercial straitjacket factories find themselves in?
The overriding point here is that the demonstrations we are seeing in Bangladesh right now, the violence on the streets of Gazipur and Ashulia, is a direct consequence of the unequal buyer-supplier relationship.
Members of the American Apparel and Footwear Association appear to be calling for better wages for garment workers in Bangladesh, but note how their letter lacks any specifics. This letter is a cynical public relations exercise designed to make signatories look like they care about garment workers. Will these signatories back this letter up with a commitment to pay higher prices for apparel which might help fund a major minimum wage rise for garment workers? Obviously not.
In the meantime, factories, trade bodies, unions and rights groups in Bangladesh continue to fight amongst themselves.
All are victims of a fashion sector which says all the right things on purchasing practices but simply fails to follow them through, month after month, year after year. This has been going on for more than a decade and it’s an industry scandal.
