Thousands of garment workers in Bangladesh have violently clashed with police over low wages. The protests focus on the level of the new minimum wage. FWF urges its brands to contact and support their suppliers in Bangladesh.
The new minimum wage is much lower than what garment workers in Bangladesh demanded. Also, the protests focus on what many consider to be discriminatory elements of the new wage law. The basic wages for the higher pay grades did not increase proportionally to those of the lowest grade (grade 7).
Negotiations
In response to this, and after eight days of labour unrest, on 13 January 2019 the government announced a revised pay structure for the garment sector, with a slight increase in both basic and gross wages in six of the seven grades. This outcome is a result of negotiations in a tripartite committee, which included representation of workers, owners and government. Union representatives indicated that they welcome the revision and urged workers to return to work, amid fears of arrest and termination of jobs.
Fair Wear Foundation believes it’s important that FWF member brands sourcing in Bangladesh contact their suppliers to express concern. ‘They need to ascertain what the situation in the factory is’, says FWF’s country manager for Bangladesh, Koen Oosterom, ‘and urge factory managers to take the necessary action to avoid escalation of worker unrest. This unrest could arise, for example, by delaying payment of wages as per the new minimum wage law, by degrading workers to lower grade levels, making deductions on non-statutory wage elements such as bonuses, withholding or delaying overtime remuneration, or increasing targets to avoid paying productivity bonuses.’
Adjusting prices
With the higher cost of labour comes the responsibility for brands to revisit their pricing levels. That is why FWF has asked its brands to reassure factory management that they will assume their own responsibility for the higher minimum wage. Koen Oosterom: ‘They need to motivate the factory management to implement the new minimum wage structure by assuring them that they will adjust prices accordingly and timely as required. ‘
Using the FWF Labour Minute Calculator, brands and factories can identify the increase in the manufacturing price of garments required to cover the higher costs of labour due to the minimum wage rise. This calculator, which is adjusted to reflect the 13 January 2019 adjustments, enables suppliers and buyers to determine the cost of one minute of labour in a factory and makes components such as bonuses and insurance visible.
Why is this so important for the people of Bangladesh? The garment export industry is the biggest earner for Bangladesh, accounting for 81% of total export earnings. It is estimated that over 7,000 factories are linked to the export market. You can read more about the garment industry in Bangladesh here.