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Breaking News: Bangladesh Factory Owners Agree to New Minimum Wage

Moving one step closer to a historic resolution regarding the hotly contested minimum wage, Bangladeshi garment factory owners have agreed to pay 5,300 takas (approximately $68) a month to entry level workers.

Representatives of the factory owners have been locked in a tempestuous dispute with disgruntled workers, a debate arbitrated by Prime Minister Sheikh Hasina. A recent recommendation by the ad hoc Wage Board was meant to quell simmering tensions but ignited them instead.  The panel decided to increase the minimum wage to about 5,300 takas per month, a 77 percent increase from the previous benchmark of 3,000 takas ($38).

At least initially, neither of the disputants seemed satisfied with the recommendations. Atiqul Islam, president of the BGMEA, confided that he was skeptical the current recommendation from the Wage Board was realistically implementable. “We need a win-win situation. The board has imposed the recommendation on us–the industry will not be able to sustain the recommended salary structure.”

Many labor activists rejected the increase as insufficient but then urged the factory owners to make their peace with the compromise. Kalpona Akter, the executive director of the Bangladesh Center for Worker Solidarity, a non-governmental activist group that represents workers, quickly voiced complaints that the wages will still be the lowest in the world. However, Sirajul Islam Rony, the workers’ representative on the Wage Board, referring to factory owners, said, “They should just accept it.The minimum wage would have to be raised at some point-be it today or tomorrow.”

But the issue is not yet decisively settled. The Ministry of Labor still has to approve what only amounts to a non-binding recommendation. According to Labor Minister Rajiuddin Ahmed Raju, the government is scheduled to finalize the new minimum wage on November 21. Mr. Raju said that the new salary structure is an equitable compromise and its fast approval ensures the continued success of Bangladesh’s garment manufacturing industry.

The political tug of war has spilled into the streets, sparking civil unrest and threatening to damage the economy. More than 100 factories have closed to avoid the throngs of embittered workers. At least one man died Sunday, bringing the death toll over the last two weeks amidst similar protests to at least nineteen.

The demonstrations on Sunday were the first of four days of planned protest. Some reports indicate that an overwhelmed police force had to enlist the help of the military to control crowds that had become unmanageable. More than 200 vehicles have been destroyed by vandals.

Now that previously intractable factory owners, represented by the Bangladesh Garment and Manufacturers Export Association (BGMEA), has capitulated, it seems likely the new minimum wage will go into effect immediately following the final Ministry of Labor meeting with the Wage Board on November 21.

 

 

 

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