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Bangladesh Minimum Wage Dispute Finally Nears Resolution

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After repeatedly halted negotiations, workers and factory owners in Bangladesh seem to be finally arriving at a negotiated compromise over wages. It looks like the minimum wage will be set at Tk 5,000 per month, significantly lower than the workers’ original demand for Tk 8,114 but much better than the owners’ first offer at Tk 3,600.

Speaking to the Daily Star, Sirajul Islam Rony, a workers’ representative on the wage board, said, “I hope the board will finalize the salaries in tomorrow’s [October 21] meeting. There is a possibility that the minimum wage would be fixed at Tk 5,000.”

Factory owners and union groups have clashed acrimoniously in recent months over the heated issue of wages. Bangladesh convened a meeting of the Minimum Wage Board, comprised of labor union representatives, governmental bureaucrats and factory owner representatives. Arshad Jamal Dipu, speaking on behalf of factory owners, proposed a minimum wage increase of no more than 20 percent, an increase of Tk 600 to Tk 3,600. Dipu said this number was the result of calculating several variables, including the costs of living and daily calorie consumption for workers.

Dipu’s proposal starkly contrasts with what factory workers have demanded. Sirajul Islam Rony, a labor leader also on the Minimum Wage Board, angrily called Dipu’s calculations “illogical and inhuman.” He recommended a new minimum wage of Tk 8,114 per month, a 170.5% increase from the current level. He said, “I urged the owners to reconsider the proposal as it is too low from our demand.”

The dispute between labor representatives and factory owners has been brewing ever since the Minimum Wage Board was assembled and Prime Minister Sheikh Hasina assured workers their salaries would be increased.

Historically, a wage board assembles every five years to revisit the issue of compensation for workers. Given the ferment surrounding labor conditions in Bangladesh, especially in the still hot contrails of the Rana Plaza tragedy, the government decided it would be prudent to meet earlier than scheduled.

Recently, factory owners have assumed a noticeably more conciliatory posture. Atiqul Islam, head of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said, “We told the unions that we’ll hike wages for all workers as soon as new minimum wages are announced by the government panel. We are also ready to hike wages as much as the panel determines. We will accept even if it is more than 20 per cent. But obviously our hope is that the enhanced wages will be win-win for the industry and the workers.”

But tensions have continued to escalate, crescendoing last week when when the managing director of an apparel company was kidnapped for twelve hours. According to law enforcement authorities, the executive’s captors demanded salary increases and severance payments.

Despite discernible progress, there is an atmosphere of wary cautiousness until the ink on a final agreement is dry. Reaz Bin Mahmood, vice president of the BGMEA, said, “We expect the board to finalize the minimum salary soon. But, as in previous cases, the government might have some recommendations after the finalization of the salary structure by the board.”

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