CPD proposes Tk22,776 minimum wage for tannery workers

The Centre for Policy Dialogue (CPD) has recommended a minimum wage of Tk22,776 for tannery workers, which the industry owners say won't be possible for them to pay as they are passing a bad time. 

While placing the proposal at media briefing yesterday, the think tank revealed findings of a study titled: "Minimum Wage for the Bangladeshi Tannery Industry in 2024: An Empirical Analysis." 

It assessed factors like food and non-food costs of tannery workers, the number of family members, and the number of earning members.

The CPD said the proposed wage structure will ensure tannery workers' financial security while addressing the mounting inflation.  

"In the present market situation, the monthly expenditure on food for a tannery worker's family amounts to Tk20,564, while non-food expenses stand at Tk12,914. On average, each family comprises 4.6 members, with 1.5 of them being earning members. So, the minimum monthly wage for a worker should be Tk22,776," CPD Senior Research Associate Tamim Ahmed while presenting the study findings. 

Besides wage for the grade-5 workers, the lowest grade, the CPD also proposed Tk39,270 minimum monthly wage for the grade-1 workers.  

Back in 2018, the government set the minimum wage at Tk13,500 for the tannery workers under the lowest grade-5, including basic salary and allowances. 

But the study, conducted jointly with the Leather Development Forum (LDF) and the OSHE Foundation, finds that about 60% of the surveyed tanneries paid less than that amount. 

According to CPD, there are about 200 tanneries in Bangladesh, including 127 in Tannery Industrial Estate, Savar, Dhaka. 

The industry insiders said some 10,000 workers are employed in the tannery sector in Bangladesh.  

In 2023, the government formed a five-member minimum wage board, which will propose new wages for the tannery workers. 

Addressing the event, Shahin Ahmed, president of the Bangladesh Tanners' Association, expressed doubt over implementation of the CPD's proposal, given the current state of the leather sector. 

He mentioned that the leather sector is having a bad time due to increased dollar price coupled with the falling export earnings. 

However, he thinks that the issue should be settled through discussions involving all the stakeholders.

Abdul Malek, general secretary of the Tannery Workers' Union, said the CPD's proposal could not meet their expectations. 

He said the association's proposal for a minimum wage of Tk25,000 has been submitted to both the employers and the wage board for consideration.

At the event, Minimum Wage Board Chairman Liaqat Ali Mollah said they will declare a practical pay structure that balances between the industry's sustainability and the well-being of the workers. 

The CPD also proposed several reforms to improve overall working conditions and transparency in the tannery industry.

It recommended determining housing allowances and other wage components as a percentage of the basic wage rather than fixed amounts.

It also suggested unifying the grading system to ensure consistency across the industry. 

To enhance transparency and accountability in wage disbursement, it suggested promoting the use of Mobile Financial Services (MFS) to pay tannery workers. 

CPD Research Director Khondaker Golam Moazzem expressed hope that both the employers and workers will equally benefit from the proposed wages. 

The researcher believes that increasing wages could lead to a positive transformation in this sector. 

Tannery wages in other countries 

Unlike Bangladesh, most of its peer countries have regional minimum wage rather than sector-wise minimum wage, according to CPD. 

In contrast to Bangladesh's $123 minimum wage, it is $146 in India's Kerala, $123 in Uttar Pradesh, $138 in Tamil Nadu, and $117 in West Bengal. 

CPD researcher Tamim Ahmed said West Bengal has a noticeably lower cost of living than urban areas in Bangladesh such as Savar.

Only tannery workers in Pakistan's Punjab earn $115, which is less than that of Bangladeshi workers. 

Tamim said, Vietnam is a major player in the leather sector and their average minimum wage is $171. 

In Thailand, the average minimum wage for tannery workers was found to be $255.