Bangladesh should annually review its wage-setting process as apparel workers, who get minimum wage, are losing income year on year with current inflation rates, said a policy brief of Cornell University.
The brief titled 'Waiting Game: Minimum Wage-Setting in Bangladesh's Apparel Industry' by Global Labor Institute (GLI), a part of Cornell University ILR School, which has been published recently, made five-point recommendations.
The recommendations include institutionalising of the annual review of minimum wages and announcing a review of the 2023-set minimum wage to take place in 2025.
The GLI, which is dedicated to independent quantitative research and action, briefly analysed Bangladesh's national minimum wage-setting policy as the new government plans major updates to labour law and practices.
Researchers note that the longtime minimum-wage policy, which reviews wages every five years, compounded with high inflation, favours employers over workers.
In addition, it noted that the local 'purchasing power' of workers' wages in Bangladesh is significantly lower than those of workers in competing apparel producing countries.
Over employers' argument of rising labour cost in a labour intensive sector would make their industry less competitive the brief showed that there is no evidence to support this and the experience of Vietnam, Indonesia, Cambodia and elsewhere in recent years undermine the argument.
Citing data, it said apparel brands a retailers advocacy for meaningfully higher wages and a regular wage-setting process has been ineffective and the 2023 wage revision and the fall of the Hasina government in 2024 have drawn the industry's attention again.
As a result, the researchers are calling on Bangladesh's government to simplify the minimum wage structure and adjust wages annually. It also recommended 'genuine trade union representatives chosen by labour federations are appointed to a wage board'.
Talking to the FE on Thursday, Jason Judd, executive director of Cornell ILR, explained that Cambodia's apparel industry is a good example for Bangladesh to follow citing growth in wages and output.
munni_fe@yahoo.com
