September 22, 2013
By SYED ZAIN AL-MAHMOOD
DHAKA, Bangladesh—Tensions rose in Bangladesh’s garment industry over the weekend as factory owners and workers squared off over a new minimum wage for the South Asian country’s largest export industry.
Tens of thousands of garment workers took to the streets in the capital of Dhaka on Saturday, demanding the government set minimum monthly pay at 8,000 taka, or about $100. Today an unskilled sewing-machine apprentice earns a minimum monthly wage of just 3,000 taka.
The factory-owners’ association said a higher minimum wage could hobble the industry as costs of other inputs to clothing production are also rising, even as demand from many Western markets is weak.
Workers blocked a key highway leading north out of Dhaka on Saturday and clashed with police, demanding factories in the area be closed for the day to allow workers to attend the Dhaka rally. Several people were injured, the police said.
Labor leaders at the rally held in central Dhaka rejected an offer from the Bangladesh Garment Manufacturers and Exporters Association to raise wages by just 20%.
Labor leader Sirajul Islam Rony, president of Bangladesh National Garment Workers Employees League, said there could be more protests if the workers’ demands aren’t met.
“The industry is the top foreign-currency earner in the country, but the workers are not getting the benefits,” Mr. Rony said. “If the owners don’t listen to our demands, there will be more unrest in the garment sector.”
Shahidullah Azim, vice president of the Bangladesh Garment Manufacturers and Exporters Association, said the industry cannot afford to more than double wages.
“We are facing many challenges. The buyers are driving down the price. The cost of production is going up. Some of our traditional markets in Europe and America are still struggling to come out of an economic downturn,” he said. “We must take care not to kill the goose that lays the golden eggs.”
In June, Bangladesh’s Ministry of Labor and Employment formed a committee with factory owners, workers and government representatives to review wages in the garment sector. The committee is supposed to report back with a negotiated solution by December.
Bangladesh’s garment industry exported more than $20 billion of clothes in the fiscal year ended June 30 and employs roughly four million workers. About 80% of the people in the industry are women and most of them are from poor, rural areas.
The minimum wage was fixed at 3,000 taka a month in 2010. Labor groups are now demanding a big increase to offset the impact of a high inflation rate that has often climbed above 10% in Bangladesh.
Prominent Western brands such as H&M Hennes & Mauritz AB, HM-B.SK -1.39%Gap Inc., GPS -0.86% Wal-Mart Stores Inc. WMT -0.74% and TescoTSCO.LN -3.73% PLC that source clothes from Bangladesh have been pressuring the country to improve pay and working conditions in its factories after high-profile and deadly factory accidents over the past year. In April a collapse at a building full of garment factories killed more than 1,100 people, while last November a fire at another factory killed at least 110 workers.
In June the U.S. stopped giving Bangladesh duty-free access to its markets, saying the country hadn’t done enough to improve workers’ rights. Meanwhile, Bangladesh’s largest apparel importer, the European Union, also has threatened to revoke its preferential treatment of imports from the country if factory conditions don’t improve.
Source: The Wall Street Journal