Recent incidents like fire in the Tazreen Fashions, the Rana Plaza collapse and suspension of GSP facilities in the US market have rendered exports of apparel from Bangladesh more challenging than before. After all these events, several market analysts foresaw that growth of our RMG exports might suffer. But recent data have belied the forecast and indicated that the RMG export growth actually picked up.
After the unpleasant incidents, garments workers' demonstrations for realising demand for wage hike have received a new pace. The Bangladesh Garment Manufac-
turers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) along with the Wage Board tried to re-fix the minimum wage of the workers.
Now, the minimum wage, approved by the Wage Board, is Tk 5,300 which will come into effect on December 1, 2013. The garment workers will receive the new wage from January next and they will get five per cent increment on their basic salary every year. Of the minimum wage, the basic has been set at Tk 3,000, house rent at 1,200, medical allowance at 250, conveyance Tk 200 and food subsidy Tk 650 (Tk 25 per day for 26 working days in a month). It is an increase of 76.66 per cent of present wage. The representatives of the owners and the workers have reportedly agreed to comply with the decision of the Wage Board.
Export earnings from apparel products registered nearly 18 per cent fall in October last. Even if the RMG growth rate is not affected severely, the workers' unrest for wage hike may contribute to the decrease in the growth rate of the apparel sector and suspension of the GSP by the European Union. For several days, workers' unrest has been hampering work at the factories.
Everyday, scores of garments factories at Ashulia and Gazipur are declared closed following unabated agitation by garment workers who demand the minimum wage of Tk 8,000.
The likely loss of the market in view of unstable situation will turn 4.2 million workers unemployed. Who will take its responsibility? Big buyers are not placing new work orders because of workers' unrest. However, garment factory owners say the new minimum wage would put pressure on smaller factories. They also say it won't make a difference for the bigger factories because they can pass it to big buyers like Tesco and Sainsbury's. For small and medium factories, it will have significant impact as they can't afford this wage increase at all, they say.
However, most workers earning the minimum wage are unskilled, employed in small factories that serve as 'training' centres for larger factories, and for the industry as a whole. If smaller factories are forced to shut down, the government would have to find another way to address shortage of skilled workers which may be troublesome.
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