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Raise real wages, raise productivity

  • Published at 06:24 am July 18th, 2013
Raise real wages, raise productivity

While it is certainly a good sign that Bangladesh's RMG exports have grown in the past year despite the Tazreen Fashions and Rana Plaza incidents, it certainly brings up other issues that still need to be addressed.

Unfortunately, our retained competitiveness is simply a result of the fact that most of our workers are paid such a meagre sum. A recent study done by the Center for American Progress/Workers Rights Consortium shows that workers pay in Bangladesh, has decreased in real terms.

As we push through reforms, this is an issue that cannot be left by the wayside.

If the country's development is to continue apace, we must ensure that we are actually allowing a working, middle-class to arise. As things stand, at least when it comes to labour wages in the garment sector – this is clearly not the case.

If one considers income in real terms, the wages of those working in this important sector have decreased over the last few years, when increases in the cost of living are taken into account.

This means that they have less purchasing power, a factor that has significant knock-on effects with regard to the rest of the economy.

The living wage that is paid in the country now must be restructured so that it can keep up with the rate of inflation. Organisations would do well to incorporate a yearly salary increment in addition to a cost of living adjustment. This would allow companies to retain employees and thus become more productive.

After all, a content workforce is a productive workforce.