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Bangladesh: Garment Workers Refuse Third Wage Hike Offer

The third time was not the charm for Bangladeshi garment workers as the discontented employees rejected the latest minimum wage proposal to come from factory owners.

The government-formed Minimum Wage Board met today to settle the wage structure with an offer of Tk 4,250 ($55) per month, but the ready made garment (RMG) workers and their labor representatives were not having it.

The RMG industry has been embattled for weeks seeking a wage increase from the current Tk 3,000 ($39) per month–the lowest worldwide wage rate in the industry–to Tk 8,114 ($105), a number considered to be a more reasonable living wage for the sector’s four million workers.

But the problem, Arshad Jamal Dipu, BGMEA director and representative of the garment owners on the Board said, is that the workers’ demand are just too costly. “The industry can’t afford a minimum wage more than Tk 5,000 at this moment,” he said. Speaking just days before this third proposal, he added, “That is why we want to discuss the matter with the government so that the final wage remains within Tk 5,000,” according to Bangladesh’s Financial Express.

Fearful factory owners came up from the previous offer in September to raise wages by 20 percent to Tk 3,600 ($47) after workers staged violent demonstrations and skipped work forcing factory closures in some cases. Just yesterday, more than 20 factories in Gazipur closed when workers demonstrated damaging production units so demands might be met.

The recently refused offer includes an allowance for food, but Bangladesh’s The Daily Star said labor reps are demanding a separate food subsidy so that the wage rate considers the cost of living and not just food inflation and Board members say this is the main issue stalling a settlement.

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Without the labor representatives, activists and labor leaders for the industry fear workers won’t be heard. At a consultation with the United Nations at the BRAC Centre Inn in Dhaka yesterday, activists called for trade unions to give workers a platform to speak and to ensure their rights.

“The existence of trade unions is vital to fight to ensure workers’ rights,” Heisoo Shin, a UN Committee on Economic, Social and Cultural Rights member said according to the Daily Star. “Manufacturers should set minimum wages by following international standards under International Labour Organization,” she said. “Increasing the buying power of garment workers will benefit the whole economy.”

In an effort to settle the wage negotiations prudently, the Minimum Wage Board traveled to Cambodia and Vietnam in early October to better understand the approaches taken by these nations when settling minimum wages.

Arshad Jamal Dipu, BGMEA director and representative of the garment owners on the Board said, “Our current mode of wage negotiations in Bangladesh is very positional and confrontational,” adding that, “This is not sustainable — we need to find a way where we carefully and scientifically study both the ability of enterprises to pay and the real needs of workers,” according to an International Labour Organization (ILO) statement.

During the 4-day tour, Board members met with the Garment Manufacturers’ Association in Cambodia (GMAC), the chairperson for the Vietnam National Wage Council, ILO specialists and trade union leaders. Vietnam currently uses comprehensive information from the Institute of Labour Science and Social Affairs (ILSSA), something the wage board says could soon be established in Bangladesh.

According to The Daily Star, the Minimum Wage Board intends to finalize the wage structure by November 4 with agreed upon rates taking effect from Nov. 1.