Bangladesh raises minimum wages – is it enough?

The government of Bangladesh recently announced that the minimum wage for Bangladeshi garment workers will rise by 51 percent from December. FWF’s country manager for Bangladesh, Koen Oosterom, responds to the news from Dhaka, where he recently conducted a workshop on labour minute costing for factory managers and unions.

How much more will garment workers in Bangladesh receive?
The new minimum wage for grade 7 (which is the lowest grade level) has been set at 8,000 taka (82 euros) a month, up from 5,300 takas (54 euros). The minimum wage levels for the other grades have not been announced thus far.

What would you have hoped for?
Although we are happy that the minimum wage will go up, we had hoped for more. According to various living wage benchmarks, 8,000 taka is not enough for garment workers to meet their basic needs, such as food, housing, utilities, medicine, or sending their children to school.

Did you try to influence the wage negotiations?
We sent a letter to the prime minister of Bangladesh, together with the Dutch Agreement on Sustainable Garments and Textile. We urged the Bangladesh government to show leadership and ensure a fair and negotiated increase of the minimum wage and take the collective demand of workers and unions into account.

How will the increase affect workers?
We are a bit concerned that this raise has the same negative consequences as the minimum wage raise in 2013. After that raise, we encountered problems like job losses (especially for helpers), reduction in bonusses, higher targets and production pressure and workers who got downgraded. The underlying cause was that factories were often not able to negotiate an increase in the FOB prices that takes the wage rise into account properly.

What are FWF’s next steps?
We will continue working on higher wages in Bangladesh. The FWF team in Bangladesh has just conducted seminars with factory managers and unions on labour minute costing and price negotiations. At FWF we want brands to take responsibility for raising wages in factories and it was good to see that the participating factory managers wanted to learn more about what that looks like in practice.

FWF Supplier Seminar, Bangladesh, September 2018

 Did you know that the garment export industry is the biggest earner for Bangladesh, accounting for 81% of total export earnings? And it is estimated that over 7,000 factories are linked to the export market. Read more about the garment industry in Bangladesh here.

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