The Centre for Policy Dialogue (CPD) on Sunday proposed to set Tk17,568 as the minimum wage for readymade garment (RMG) workers as per grade 7, which is the entry-level grade in the sector.
CPD Research Director Khondokar Golam Moazzem made this proposal based on their survey.
He also said: “If the buyers increase price by only $0.70 per cm of a garment that will be enough to afford the additional costs for the RMG manufacturers.”
The study has been conducted by analyzing both primary and secondary data.
Regarding the proposals by the CPD, manufacturers said that considering their ongoing business situation and low product prices, the execution of the proposed wages is almost impossible.
Meanwhile, workers' leaders said that considering the ongoing soaring inflation, minimum wages should be Tk 23,000-25,000. The current minimum wage is Tk8,000 under the current wage board since December 1, 2018.
However, Minimum Wages Board Chairman Liaquat Ali Mollah said the board is reviewing RMG workers’ salary structure to make both workers and manufacturers happy in trying to strike a happy balance.
They were speaking at a dialogue titled “Readjusting Minimum Wages in Garments Sector: Observations and Recommendations,” organized by the CPD in Dhaka.
An entry-level RMG worker is currently receiving Tk8,000 per month under the 2018 wage structure, which is the lowest among Bangladesh's major RMG competitors.
The CPD survey was conducted on 228 RMG workers from 76 RMG factories from Dhaka, Narayanganj, Gazipur, and Chittagong, said the think tank.
The survey said that while the standard family food cost should be Tk16,529, the RMG workers are able to spend Tk9,198, which is 56% of the required.
In fact, for grade 7 workers, the gap is even higher, as they can only spend Tk5,344.
CPD study finds that 27.6% of surveyed factory management believed that the minimum wages could be TK12,000-21,000, however, workers demanded Tk25,000.
By evaluating living cost, CPD proposed Tk17,568 as minimum wage for a month and also proposed six grades instead of seven.
In the discussion, Sirajul Islam Rony, a worker’s representative to the minimum wage board, said that when the wages increase, the house rent in the RMG industrial areas also increases.
He urged the government administration, BGMEA and BKMEA to monitor this. To tackle the inflationary pressures, he urged the introduction of a rationing system in the industrial hubs for the RMG workers.
He also said that the maternity leave for the workers should increase to six months and he said to include the apprentice workers in a grade after three months of apprenticeship.
He thinks the wage grade should be 5 not 7.
Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Executive President Mohammad Hatem said that they need to assess the efficiency of their workers in comparison to workers in competing nations.
However, the buyers are not practicing ethical pricing and brands act like bloodsuckers, he added, saying that many factories are being forced to cease operations due to financial burdens owed to banks.
“The unethical purchasing behaviour of brands stands out as a significant contributing factor to these difficulties.
“Is it fair when a buyer pays $2 to a factory in Vietnam or China, but offers us $1.5-$1.6 for producing the same item?” He asked.
RMG sector owners' representative of the Minimum Wage Board Siddiqur Rahman said that the sector earned nearly $47 billion in FY23, and the four million workers are the main contributors.
“We want to pay more than the CPD proposal. But we will propose a figure, which is affordable to both parties,” he added.
He also said that by November, they’ll be able to set a minimum wage, and by December, the gazette will be published and from the next month, the workers will be getting their wages based on the new minimum wage board.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Director Faisal Samad said that the aim is to understand the obligations of buyers and brands.
“Specifically, we seek transparency regarding the compensation provided to us for an item compared to the payments made to factories in Vietnam, China, and India for producing the same goods,” he added.
Samad also raised a question saying if they are receiving less than the competitors, who is responsible for this?
Minimum Wage Board Chairman Liaquat Ali Mollah said that they have completed three meetings already and the fourth meeting is expected to be held at the end of this month where both parties will place their minimum wage proposals, he hopes.
“We have visited several factories at the various industrial hubs and come to know that the manufacturers and workers both have problems. We are discussing the demands of all parties and we will fix a minimum wage based on a win-win situation for both parties,” he added.
He also urged the buyers to pay fair prices for the RMG items imported from Bangladesh.
BGMEA President Faruque Hassan said that the opportunities and facilities for the workers are being increased gradually in areas like earned leave, medical leave, casual leave and maternity leave.
“We also want the wages for the RMG industry to increase amid the global inflation. The wage board is working independently and they will take a reasonable decision regarding the wages,” he added.
Advocate Montu Ghosh, president of the Garment Workers Trade Union Center urged for lowering the grading system, mid-level training, and facilitating the right to form trade unions.
The research team included Dr Khondaker Golam Moazzem, research director of CPD, Tamim Ahmed senior research associate, and MM Fardeen Kabir, surveyor.
BGMEA President Faruque Hassan, BKMEA Executive President Mohammad Hatem, owner's representative to the minimum wage board Siddiqur Rahman, worker's representative to the minimum wage board Sirajul Islam Rony, chairman of the minimum wage board Liaquat Ali Mollah, representatives from manufacturers, workers, brands, buyers and government officials were also present at the event.