CPD recommends Tk 17,568 minimum wage for garment industry workers

An entry-level worker in Bangladesh's garment sector should receive a minimum of Tk 17,568 per month, up from the current Tk 8,000, amid rising inflationary pressure, according to a study by the Centre for Policy Dialogue (CPD).
The leading civil-society think-tank notes that the pay hike is possible if Western fashion buyers increase the cost of manufacturing by a mere 7 cents per product.
While sharing the study findings in Dhaka on Sunday, the think tank advocated for a 55 per cent hike in basic pay under the minimum wage board. The current minimum wage, set by the government in 2018, is Tk 8,000 for the workers.
CPD senior Research Associate Tamim Ahmed presented the study findings titled "Refixation of Minimum Wage for RMG Workers: Observations and Recommendations".
CPD Research Director Khondaker Golam Moazzem moderated the event, which was also attended by Bangladesh Minimum Wages Board Chairman Liaquat Ali Mollah.
Among the speakers were Bangladesh Garments Manufacturers and Exporters Association (BGMEA) President Faruque Hasan, its former president Md Siddiqur Rahman, President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Hatem Ali, Garments Workers' Trade Union Centre (GWTUC) President Mantu Chandra Ghosh, Christian Aid interim Country Director Nuzhad Jebin, Bangladesh National Garments Employees League (BNGWEL) President Sirajul Islam Rony, Bangladesh Garments Saramik Sanhati President Taslima Akhter and Garments Sromik Froint President S M Ahsan Habib Bulbul, among others.
The CPD study also recommends specifying all elements of a wage structure using a percentage-based system by the minimum wage board, instead of a fixed salary.
The organisation has also calculated that if garment owners could get an additional 7 cents on average for each unit of RMG product, they could easily implement the CPD-proposed wage structure.
It urged global brands to consider this issue for the betterment of the Bangladeshi RMG industry.
The CPD study showed a continuous increase in the surveyed factories' mean unit cost for top exporting products, from US $3.0 in 2017 to $4.1 in 2023 -- a 37 per cent surge. However, during the same period, the unit price of the top exporting product also increased, from $3.87 to $4.64 -- a 20 per cent increase.
The CPD study also noted that the capacity utilisation of the surveyed factories declined to 84 per cent in 2023 from 85 per cent in 2018.
Meanwhile, workers' rights and union leaders have a different opinion. They believe that the actual scenario of the workers is not accurately reflected in the CPD study.
Labour leader Taslima Akhter said the minimum wage should be Tk 25,000, taking into account the skyrocketing inflation over the last five years. This, she argued, is necessary to ensure a healthy life for the 4.2 million workers in the sector who contribute 84 per cent of the exports.
She pointed out that the CPD methodology considers two earners in a family for the study, which she believes is an exaggeration, as government statistics suggest the number is 1.4 earners per family.
She also noted that the sample size of the CPD survey is very small, including only 228 RMG workers.
Mantu Chandra Ghosh believes that the basic pay should be 65 per cent of the total salary, which currently stands at only 51 per cent. He opposed the CPD recommendation of Tk 17,568 as the minimum wage and instead demanded Tk 25,000.
Md Siddiqur Rahman said factory owners also want a wage adjustment, but it should be rational and considerate of the current trade conditions, to avoid forcing more factories to shut down their operations.
Khondaker Golam Moazzem said it is crucial to examine the current structure of wages and to determine a new wage in a way that allows workers to have a fair minimum wage.
He also highlighted that ensuring responsible business practices of brands, buyers and employers, as well as a strong role of government and workers, are essential for adopting and implementing the new minimum wage.
Liaquat Ali Mollah said a rational minimum wage will be finalised by November and workers might start receiving the new wage from December 2023.

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