Garment manufacturers have threatened to close down if they are forced to pay anything over Tk 4,500 as monthly wage to workers.
Readymade garments are Bangladesh’s biggest exporters, that fetched more than $19 billion last year.
The threat of closure came after a joint meeting of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) on Tuesday.
The meeting was convened at the BKMEA’s Karwan Bazar office a day after the government-sponsored Wage Board proposed a Tk 5,300 monthly minimum wage for readymade garment workers.
The workers have been asking for a Tk 8,100 monthly wage.
The BGMEA-BKMEA joint meeting rejected the wage board proposal, saying it would ruin the industry if implemented.
The BGMEA President Atiqul Islam said they could pay no more than Tk 4,500 in monthly wage to a worker and condemned the Wage Board’s award.
“We will appeal against the proposal (Wage Board’s) on Wednesday, and we will request for accepting the wage structure proposed by us.”
Atiqul went on further ahead to state that BGMEA and BKMEA members would shut their businesses if their demand was not met in 15 days.
“We don’t want to close garment factories. But if we are forced to follow the Wage Board’s decision, the garment industry will be closed down.”
He requested the government for finding an honourable ‘exit’ from the present predicament.
“We can close down after paying arrears to all workers. But the responsibility of paying the bank debt will rest on the government.”
The BGMEA President said they would issue a notice to know which factories want to close down.
He said BGMEA and BKMEA have studied the minimum wage proposal and reached a conclusion that small and medium factories would be compelled to shut down if it is implemented. “And 70 percent of our factories are small and medium.”
Terming the wage proposal suicidal, Atiqul said: “This proposal has been placed without considering the ground realities.”
He said marginal productivity is considered in determining the minimum wage. “But here that has not been considered.”
Apparel exporters say prices of their products have dropped in the US and Europe while business expenses and taxes have increased.
All together Bangladeshi apparel industry has lost 37 percent competitiveness, they said.
Atiqul said Bangladesh is compared with China and Vietnam when wages are determined.
“But Bangladesh has not the business environment that China and Vietnam enjoy. In China interest rate is less than 5 percent while in Bangladesh it’s 18-20 percent.”
He said political unrest also takes toll on productivity. According to him, the readymade garment industry sustains a loss of Tk 2 billion in one day of strike.
He demanded cut in bank rate and port handling charge and prompt power and gas connections.
BGMEA former Presidents Abdus Salam Murshedy and Shafiul Islam Mohiuddin and BKMEA Vice-president Md Hatem were present among others at the press conference.