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ILO warns inequality rising as informal jobs dominate Bangladesh’s labor market

Nearly 85% of Bangladesh’s workers are employed without official contracts, benefits, or legal protections says head of Labour Reform Commission

 

Update : 24 Sep 2025, 05:47 PM

Bangladesh’s hard-won development gains risk stalling unless growth is matched with fairness and dignity for all workers, the International Labour Organization (ILO) has warned in a new global report that spotlights how informal jobs and gender pay gaps continue to hold back progress.

The flagship study, “The State of Social Justice: A Work in Progress,” was launched Tuesday night at the United Nations headquarters in New York, on the sidelines of the 80th Session of the UN General Assembly. It comes ahead of the second World Summit for Social Development in Qatar this November and marks the ILO’s first global review of social justice since the 1995 Copenhagen Summit.

Gains, but progress slowing

The report recognized undeniable advances in education, poverty reduction, and productivity over the past three decades. Globally, extreme poverty has fallen from 40% in 1995 to 10% today. In Bangladesh, World Bank data showed the poverty rate declined from 44% in the early 1990s to less than 19% in 2022.

School enrolment, particularly for girls, has expanded dramatically—one of the key reasons Bangladesh is often cited as a development success story. Child labor has also dropped, though nearly 3.5 million children remain engaged in hazardous work, according to national surveys.

But the ILO warned that progress slowed in recent years, leaving deep inequalities intact. “The world has made undeniable progress, but we cannot ignore that millions remain excluded from opportunity and dignity at work,” said ILO Director-General Gilbert F Houngbo said. “Social justice is not only a moral imperative – it is essential for economic security, social cohesion and peace.”

Informality entrenched

The report stressed that economic growth was no longer translating into formal, secure jobs. Globally, 58% of workers remain informally employed. In Bangladesh, the share is far higher.

Syed Sultan Uddin Ahmed, head of the Labor Reform Commission, said that nearly 85% of Bangladesh’s 80 million workers—about 60 million people—are employed informally. This means they work without official contracts, benefits, or legal protections, leaving them vulnerable to exploitation, unsafe conditions, and unfair pay.

“Workplaces have expanded, new sectors like software have emerged, but the largest portion of workers remain outside the law,” Ahmed noted. “From households to secretariat offices, inequality has widened. A large portion of workers at the bottom are outsourced with no rights at all.”

He highlighted that even in booming sectors like construction, all workers are hired informally by contractors, leaving them invisible in official records.

Gender and migration gaps

The ILO also flagged entrenched inequalities in pay and treatment. Globally, women earn just 78 cents for every dollar earned by men. In South Asia, wage parity may still be a century away.

Bangladesh’s garment industry, employing over four million workers—mostly women—illustrated the gap. Studies showed female machine operators earn less than male supervisors despite producing comparable output.

Migrant workers, another pillar of Bangladesh’s economy, faced similar inequities. Bangladeshis remit more than $21 billion annually, yet reports cited widespread wage theft and discrimination abroad. Rights groups said construction workers in the Gulf were among the most exploited.

Taslima Akhter Lima, a member of the Labor Reform Commission and president of the Labor Federation, urged stronger enforcement of women’s rights at work and measures to gradually bring informal workers under formal protections.

Employers’ stance

Industry leaders stressed that progress was uneven across sectors. Kamran T Ahmed, president of the Metropolitan Chamber of Commerce and Industry (MCCI), maintained that “there are no child laborers in the organized or formal sectors,” though he acknowledged that informality accounts for most of the labor force.

Farooq Ahmed, secretary general of the Bangladesh Employers' Federation (BEF), echoed the point, adding that the lack of negotiation culture is a barrier. “Instead of discussions at the table, there is agitation on the streets. We need to increase collective negotiations,” he said. “We have asked the government to follow the Malaysian model for worker protection, as we can learn from those who have signed ILO conventions.”

New pressures: climate and technology

The ILO warned that emerging global challenges could widen inequality further if left unmanaged. Climate change is already reshaping the world of work, with 71% of workers worldwide exposed to heat stress in 2024.

In Bangladesh, outdoor workers from paddy fields to construction sites are especially vulnerable. Yet the country’s labor code contained no clear provisions mandating shaded rest, water access, or breaks during extreme heat.

At the same time, artificial intelligence is projected to transform one in four jobs. Women, overrepresented in clerical and routine roles, may face disproportionate losses. For Bangladesh’s fast-growing freelancing workforce—the second-largest globally—the challenge is securing fair pay and social protections in digital labor markets.

Call for bold reforms

The ILO report underscored that without deliberate policies, environmental, digital and demographic shifts risk deepening divides. But with the right investments—in skills, social protection, fair wage systems and active labor market policies—these transitions could become “engines of inclusion and resilience.”

For Bangladesh, experts argued this meant enforcing equal pay, extending social security to informal workers, preparing the labor force for green and digital transformations, and negotiating stronger protections for migrants abroad.

The report called on governments, international institutions, and social partners to place social justice at the center of policymaking—from finance and industry to health and climate—and to strengthen cooperation for coherent global responses.

As Bangladesh prepares to send a delegation to the Doha summit in November, the ILO’s message is clear: progress cannot rest on economic growth alone. Without fairness and dignity for the country’s 60 million informal workers, its celebrated development story risks losing momentum.

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