A new study has found that unionised readymade garment (RMG) factory workers earn an average of 10 per cent higher wages compared to their non-unionised counterparts in the RMG sector, as well as non-RMG workers.
The study, presented at the Annual BIDS Conference, also reveals that workers in the RMG industry earn a statistically significant 19 to 22 per cent higher wages compared to other sectors, due to stronger compliance regimes, formalised structures, and a higher skills intensity within the RMG sector.
Meanwhile, another study presented at this conference showed that the RMG industry experienced a 4.19-percent annual growth in productivity over the last 10 years since 2014. Productivity, in this context, is defined as output per unit of time at the task level.
Among RMG products, jackets recorded the highest productivity growth, with a 6.59 per cent average annual increase. Other products showing strong productivity growths include knit lingerie (6.43 per cent), sweaters (6.05 percent), home textiles (5.58 per cent), and t-shirts (4.39 per cent).
The findings were shared during the third session of the Annual BIDS Conference that began in Dhaka on Sunday.
The first study, titled 'Wage Earnings of Manufacturing Workers in Bangladesh: Do Trade Unions Matter?' surveyed 3,005 workers across 20 industries in three districts surrounding Dhaka.
The second study, 'Technological Changes at the Process and Sub-Process Level in the RMG Industry in Bangladesh', focused on 51 RMG firms, analysing eight products, 39 processes, and 140 sub-processes.
Sharing the findings on unions' impact on wages, Mahmudul Hasan, Research Associate at the Bangladesh Institute of Development Studies (BIDS), said the study showed an overall unionisation rate of 11.35 per cent among the surveyed 3,005 workers, with unionised workers earning roughly 10 per cent higher gross wages than their non-unionized counterparts.
While part of this wage differential is attributable to greater experience and tenure among union members, the wage premium remains positive and statistically significant, he said.
Within the RMG sector, however, the union wage coefficient is not statistically significant, indicating no measurable wage difference between unionised and non-unionised RMG workers once observable characteristics and industry-level compliance are controlled for, he added.
The findings indicated that unions generate a generalised and statistically significant wage premium across manufacturing, and the relatively higher wages in the RMG sector partly reflect spillover effects from union activity -- where unions advocate for higher wages for both unionised and non-unionised workers.
Sharing the findings of another study, BIDS research associate Kazi Zubair Hossain said that while the early 2000s mark the start of modernisation of RMG industry, the following two decades are marked by automation and commitment to sustainability such as energy and water-saving technology.
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