Nearly half of sectors fail to regularly increase wages: Study

Nearly half of the sectors monitored by Bangladesh's Minimum Wage Board do not regularly increase wages, a study has found. Out of 42 sectors reviewed, 20 sectors—about 48%—have not raised wages for their workers.

The Bangladesh Institute of Labour Studies (BILS) presented the study today at a roundtable discussion titled "Wage Determination of Minimum Wage Board: Scope, Challenges and Way Forward," held at The Daily Star Centre in Dhaka.

According to the Bangladesh Labour Act, minimum wages should be reviewed and updated every five years. However, the study shows that these 20 sectors failed to increase wages within this required timeline.

"Irregular review of minimum wage, failure to adhere to the scheduled five-year interval, political biases in selecting representatives from both the employers and workers, and inadequate groundwork are common issues," the report reads.

The affected sectors include aluminum and glass enamel, automobile workshops, bakeries, biscuits and confectionery, tanneries, shipbreaking, tea packaging, pharmaceuticals, soap and cosmetics, hotels and restaurants, land ports, jute pressing and baling, match industries, cold storage, salt crushing, oil mills, and vegetable products, among others.

According to the Minimum Wage Board, some sectors have not increased wages in the last 20 years or more. For example, the petrol pump sector last set its wage in 1987.

The study also found that the wage board failed to propose a new wage within the required six-month timeframe after its formation.

While presenting the study report, Mustafizur Rahman, an associate professor at Jagannath University, said, "The wage board took 7 months to propose a new wage for RMG workers. In contrast, it took 13 months for the tannery sector, 18 months for shrimp, and about 4 years for tea."

The study also found that the selection process for worker representatives on the wage board was controversial. There was no clear evidence on how the wage amounts were calculated, the calculations were never made public, and the independent member did not conduct separate wage calculations.

The report states, "Political decisions regarding wages were made before finalising the amounts, and the declared wages did not satisfy the workers." It also called for the establishment of a national minimum wage and regular reviews of minimum wages.

Md Towhidur Rahman, president of the Bangladesh Apparels Workers Federation, said, "The demand of the time is for a national minimum wage." 

Other labour leaders and experts echoed this call, stating that a national minimum wage would set a standard for minimum wages across all sectors in the country.

Masum Billah, the legal officer of the Department of Inspection for Factories and Establishments, said, "We have already finalised a draft of the National Wage Policy." Additionally, labour leaders are requesting a decrease in political influence over the wage board and its members.

Nazma Akter, executive director of the Awaj Foundation, a labour rights organisation, questioned the role of the wage board, saying, "If the prime minister increases or intervenes in wages, then what is the need for a wage board?"

After she presented her wage proposal for RMG workers, she reported receiving an indirect threat. She said, "When I posted a wage proposal on Facebook, I was told, 'This information has reached the prime minister.'"

Labour leaders are also calling for a shorter timeline for reviewing the minimum wage, proposing to reduce it from five years to address the impact of high inflation.

Razequezzaman Ratan, a representative of the Sramik Karmachari Oikkya Parishad, said, "Those who serve on the wage board, especially the worker representatives, need to have their bank accounts checked. This is because many people's accounts swell after the wage announcement."

'Wages adjusted in response to external pressures'

Neeran Ramjuthan, project manager of the International Labour Organisation (ILO), referred to information from the Asia Floor Wage Alliance and said, "Wages are adjusted infrequently, typically in response to external pressures rather than regular assessments, limiting the board's proactive role." 

He added, "This can result in wage disparities with rising inflation and living costs."

He noted that the wage board relies on paper-based processes, which slow down wage setting and reduce transparency. He suggested that "transitioning to a digital wage review and tracking system could enhance efficiency and accountability."

The ILO expert recommended establishing a regular wage adjustment schedule, improving digital systems, and strengthening consultations with social partners. These changes could help the wage board respond better to labour market conditions and meet worker needs.

Mamunur Rashid, chairman of the Minimum Wage Board, said, "The condition of workers in Bangladesh is distressing."

Syed Sultan Uddin Ahmed, executive director of BILS, said, "About 80% of the country's labour disputes are primarily centred around wages. So we need to focus on that issue."

Nazrul Islam Khan, secretary general of BILS, and Abul Kalam Azad, secretary of BILS, were also part of the discussion, among others.