Readymade garment factory owners have been slow to respond to workers’ demands for increasing minimum wage.
Despite the risks of continued protests, given that global retailers are watching the industry to see how the situation is handled, the owners’ associations have not responded with due urgency as workers’ agitations have spread.
In Gazipur, Savar, Ashulia and Narayanganj another volatile day passed with workers vandalising vehicles and factories, prompting owners to shut units and police to swing into action.
On Monday night, industry leaders assured Shipping Minister Shahjahan Khan, one of the labour leaders negotiating between workers and factory owners, of an amicable solution.
Workers want minimum wage to be raised to Tk8114, factory owners suggested Tk3600, which is 20% up from current wage of Tk3000, which was implemented after many delays three years ago.
On Tuesday, an independent research institute proposed Tk6560 as starting salary, however, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) as well as the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) haven’t bothered to respond, even though the owners are aware of the potential loss to business if the volatile situation persists.
A European retailer’s representative said if the chaotic conditions continue it would disrupt production of orders already placed. He said buyers are worried about supply disruptions.
Australian brand Target was monitoring the situation closely.
The company however imports products worth $150m from 35 factories locally, which is relatively moderate, compared to big US and European buyers.
“Buyers are very, very scared,” said Rubana Haq, managing director of Mohammadi Group, who supplies leading brands such as H&M, Zara, Esprit as well as Wal-Mart.
She said: “The chaotic situation needs to be settled immediately to save the industry.” Haq thinks the situation might worsen next month in the run up to the general election.
At a press briefing, the BGMEA’s acting president SM Mannan said: “A conspiracy has been started locally and internationally to destabilise the industry at a time when negotiations are ongoing to fix minimum wage for garment factory workers.”
Labour leader Nazma Akter said the demand for minimum wage to be increased is only logical, when we consider the rising costs of living, because since 2010 wages have not been adjusted to take into account higher rents and prices of commodities. Akhtar said rising costs have “pushed workers to stand with their backs against the wall.”
She said fears about higher production costs could be handled by factories if they demanded that buyers increase the rates charged for CM (cutting and making) so as to offset the cost of production.
A representative of a Scandinavian brand said buying houses and factories lacked marketing capacity and ability to negotiate prices.”
Europe’s second-biggest retailer H&M joined IndustriALL Global Union, which supports increased wages. According to a Bloomberg report, H&M’s spokesperson Andrea Roos said: “We strongly support the workers’ demand (for increased minimum wage).”
A reputed brand’s local representative spoke for everyone when he said: “If the situation is aggravated from October when political movement leading to general elections begins, then it will risk Bangladesh’s image and the industry will be in dire straits.”
