Facebook Pinterest Search Icon SourcingJournal_horiz Tumbler Twitter Shape photo-camera graph-trend Shape latest-news icon / user

Finally, Bangladesh Govt Sets New Minimum Wage

LESS THAN ONE WEEK AWAY! Join Sourcing Journal & industry leaders at our SOURCING SUMMIT NY on October 19 to discuss the most pressing issues of the day. Your business cannot afford to miss this!

After months of contentious wrangling between factory owners and workers, Bangladesh’s government has finally agreed upon a new salary structure, effective December 1. Labor Minister Rajiuddin Ahmed Raju announced that the new minimum wage will be set at 5,300 taka ($68), a massive 77 percent increase.

The factory owners, represented by the Bangladesh Manufacturers and Garment Exporters Association (BGMEA), resisted the new wage level, attempting to negotiate it down to 4,500 taka (approximately $58). However, Prime Minister Sheikh Hasina intervened and convinced them to yield to the Wage Board’s recommendation.

Labor Secretary Mikail Shipar said, “During the meeting, the Prime Minister ordered them to implement the new minimum wages of 5,300 taka from December. And they’ve agreed to implement the pay hike.”

The road to an ultimate agreement between the disputants has been a long and rocky one. 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 were destroyed by vandals.

At times, the disagreement between workers and owners seemed intractable, with each side indignantly digging in its heels, refusing to compromise. Labor activists loudly complained that even the largest wage hike proposed would do little to alleviate Bangladesh’s workers from crushing poverty. Factory owners protested that the hikes would crimp profitability, harming the industry in the long run, including the workers.

And still, the factory owners only capitulated begrudgingly. Speaking to the AFP, Reaz-Bin Mahmood, the vice president of the BGMEA, said, “We have accepted the wage board decision following the Prime Minister’s request. But it’ll be difficult for many of us to raise the wages, if the Western retailers don’t hike order prices by 10% to 15%.”

Related Articles

More from our brands