In Bangladesh, as per the latest wage structure, an entry-level operator in apparel sector will get $95 (Tk8, 000) a month, which is $68 (Tk5, 300) in the current wage structure
Bangladesh still enjoys the lowest cost for labour in manufacturing clothing products in global perspective, even after the latest wage hike for apparel workers to be effective from next month, said an international survey report.
The edge gives the manufacturers a definite competitive advantage among its peers in the global export markets.
In Bangladesh, as per the latest wage structure, an entry-level operator in apparel sector will get $95 (Tk8, 000) a month, which is $68 (Tk5, 300) in the current wage structure.
The $95 monthly minimum wage is the lowest in global standard, according to a survey report of the Japan External Trade Organization.
The survey, conducted between December 2017 and March 2018, reveals that labour in Bangladesh is still cheap and the average monthly wage is just $101, compared with $135 for Myanmar, $170 for Cambodia, $234 for Vietnam and $518 for China.
It said cheap labour is one of the strong factors behind the success of Bangladesh in apparel sector in the global export markets.
However, people in the industry say it is gradually increasing and would not remain an advantage for too long as the cost of production is going up.
They opined that government policy support including cash incentives, duty exemptions are other factors that are helping the sector remain competitive in the export destinations.
“The leverage of cheap labour is not a solution to the Bangladesh apparel industry, as it is going up continuously due to a rise in production cost, rise in wages and investment for safety improvement,” Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Senior Vice President Faruque Hassan told the Dhaka Tribune.
“In contrast with the competitors, Bangladesh’s minimum wage is going up as we are gradually increasing workers’ wages,” said Faruque.
“We have to fight with the productivity and efficiency, and for that we should focus on training and skill development so that manufacturing can remain competitive,” he added.
In September, Bangladesh government announced Tk8,000 ($95 at a rate of Tk83.85) as minimum monthly wage for an operator in the country’s apparel sector.
Of the new gross salary, Tk4,100 has been set as basic pay, Tk2,500 as house rent, Tk600 as a medical allowance, Tk350 as a transport allowance and the remaining Tk900 as a food allowance.
Workers’ leaders on the other hand say that the minimum wage should meet the basic needs of workers. The comparison of absolute wages across countries can be misleading as living expenses vary widely, they said.
“As a trade union leader, I think the minimum wage should be an amount that can meet basic needs of workers and their children’s education costs,” Sirajul Islam Rony, president of the Bangladesh National Garment Workers Employees League, told the Dhaka Tribune.
“In providing a good salary to workers, the makers have to increase price negotiation skill with the buyers. Only 12% of earnings from a product is spent for workers,” Roy Romesh Chandra, former secretary general of IndustriAll Bangladesh Council (IBC).
So, efficient management of earnings is very crucial for increasing the wages of workers. Buyers should be incorporated in setting the new wage structure, said Roy.
Economist Ahsan H Mansur called for technological development and skill training to increase productivity, which ultimately would help to raise workers’ salaries.
“Increasing wages is not the matter of a single day, it is a matter of continuity. If the development of the country is sustained, labour hiring will increase and wages will also go up,” Ahsan, executive director of Policy Research Institute (PRI), said.
On the other hand, technological development will have to match economic development. If the technological development goes hand in hand, productivity will increase, said the economist.
But the challenge is that the introduction of the technology will cut employment and productivity will increase for those who will remain in job, said Mansur
Technical training and workers’ dedication will also increase productivity, but there has to be motivation. Health, education, technical training and motivation is needed to this end, where Bangladesh is weak, he added.