What should be the minimum wage for garment workers?

Bangladesh currently has the lowest minimum wage among the top garment-exporting countries. This includes Pakistan, Sri Lanka, India, Myanmar, Cambodia and Indonesia. 

Bangladeshi garment workers earn as little as Tk8,000 every month. 

Earlier this year, the government established a wage board on 9 April to recommend a new wage structure for over four million garment workers in Bangladesh. In August, Liakot Ali Mollah, chairman of the Minimum Wage Board of the Labour Ministry, said new wages for garment workers would be decided by November and implemented the following month.  

Earlier this week, the Centre for Policy Dialogue (CPD) proposed a monthly wage of Tk17,568 for garment workers. Meanwhile, labour rights organisations demanded - considering soaring inflation - up to Tk25,000 as the minimum wage.

Five labour bodies, including the Industrial Bangladesh Council and Garments Sramik Parishad, have already issued statements rejecting CPD's wage proposal, demanding that the minimum wage of garment workers be declared at least Tk 23,000.

The Business Standard reached out to experts and stakeholders for their take on the matter. 

'Tk17,568 as minimum wage for garment workers is absurd' 

Nazma Akhter. Sketch: TBS

Nazma Akhter

President of Sammilita Garment Sramik Federation

CPD's proposed Tk17,568 as minimum wage for garment workers is absurd. How can you expect a family to live off this money in Dhaka when living expenses are so high? 

Potatoes are Tk50 per kilo. We pay Tk150 for a dozen eggs and Tk70 for a kilo of rice. We are struggling to buy food and other essentials. I don't even want to start about medical expenses. 

We, the garment workers, have not expected this ridiculous proposal from CPD. It shows that they clearly favour the owners and not the workers. 

The workers want the buyers to pay more for the products so that the owners can profit and the industry thrives. Both the owners and the workers are part of the industry. But people cannot expect us to die working for the owners. 

We have to survive first to bring profit to the owners. But how can we survive with so little money? The workers are getting sick because they cannot afford food anymore. Day by day, garment workers are losing their ability to work, which is a huge threat to the industry. 

As a labour leader, I reject the proposed minimum wage structure of CPD and demand that garment workers get at least Tk23,00 as a minimum wage.

'If a salary structure is imposed from outside, many factories may shut down' 

Shahidullah Azim. Sketch: TBS

Shahidullah Azim

Vice-President, BGMEA

CPD should have discussed the matter of the minimum wage of garment workers with the owners of RMG factories before proposing a minimum wage of Tk17,568. When you talk about issues like these without consulting the stakeholders, it creates a lot of confusion. The workers start demanding a raise without understanding that the owners cannot do it overnight.

Of course, we want the garment workers to earn more and get better wages. But this is not something that you can force, especially from outside, like the proposal of CPD. Because, even though we want to increase the workers' salary, we cannot do it unless the buyers pay us more for the products. 

So, if a salary structure is imposed from outside, many factories may eventually shut down and go out of business. That would be a huge loss for the industry. We have to keep the industry alive. If the RMG industry thrives, the workers will get better salaries automatically. And, for that, the buyers, the owners and the workers all have to sit together and decide how to do this.

We have submitted a proposal to increase the workers' salaries to the buyers already. We have also approached all the other stakeholders so that we can take a holistic approach to solving this issue. The buyers will play the most crucial role here since the owners' profit and the workers' wages depend on the products' price. They have to increase the product prices. Otherwise, the industry cannot develop a sustainable solution to this issue. 

'I am still not sure how much inflation is factored here while setting minimum wage' 

Sayema Haque Bidisha. Sketch: TBS

Sayema Haque Bisidha

Professor, Department of Economics, Dhaka University

Naturally, there will be differences between the negotiating parties, but when these differences are significant, it raises concerns. In such cases, ensuring transparency in the decision-making process is crucial. 

Along with addressing the minimum wage for garment workers, it is essential that we establish minimum wages in other sectors as well. Minimum wages are determined in about 45 sectors in the country, but this scope needs to be expanded to cover all sectors.

We must also consider the impact of inflation on real minimum wages. In other countries, inflation is considered a key factor when setting minimum wages. I am still not sure how much inflation is considered here.

If employers cannot meet wage demands or come close to them, they should provide compensation in other forms, such as subsidised housing, transportation, schooling for children, or food provisions. While paying standard wages is preferred, alternative benefits can also help bridge the gap.

Ultimately, we need to find a common ground by considering living wages, minimum wages, and the poverty line. Often, the primary reason the minimum wage falls short is inflation. The real minimum wage goes even lower because of the soaring inflation. 

'CPD' s calculation is somewhat inconsistent'​​

Manirul Islam. Sketch: TBS

Md Manirul Islam

Deputy Director, Research Development at BILS

We believe that CPD, as a professional research organisation, arrived at its conclusion on the minimum wage for garment workers using academic methods. At BILS, we also conducted research adhering to established standards, striving to bridge the gap between practicality and academia. And we think it should be higher than what CPD proposed. 

BILS' survey found that the average cost for a family dependent on the garment sector, in Dhaka, is Tk33,368, slightly higher than CPD's calculation of around Tk32,000. However, we observed a discrepancy in the final calculation. CPD assumed an average of two wage earners per family, whereas our research found 1.46 earning members per family, aligning with government data. 

This indicates that CPD's calculation is somewhat inconsistent. Even if we divide CPD's figure of Tk32,000 by 1.46, it closely matches our calculation of Tk21,500. We have reservations about certain aspects of CPD's methodology. For instance, CPD allocated Tk4,831 for housing in a family of 3.7 members, which we find very unacceptable.

Setting the minimum wage above the poverty line is essential, and CPD's housing cost falls below this standard. Similarly, CPD allocated Tk351 per month for a child's education, which seems unrealistic. A medical allowance of Tk879 appears insufficient to cover the medical needs of a family of four, especially in the case of hospitalisation or serious illnesses.

Of course, we do not intend to discredit CPD's work but to seek common ground and propose a practical minimum wage.