It pays to get the ducks in a row
Wednesday, 30 June 2010
Mahmudur Rahman
Roughly a year ago in this column the point of impending salary increases and the impact on the economy had been made. That was when the government, true to its election pledge had announced that a new pay scale for employees was to be made. It subsequently was. Yet, at that time the simmering discontent amongst garments workers about better pay was a far more dominant discussion point not because the government pay scales were not important but simply because they didn't resort to the rather unpleasant option of violence to achieve their goals. Similar is the case with the waterways employees who also resorted to a strike to drive their point home. The question that hasn't been asked of owners of private operations on the waterways is where they will get the money from and the subsequent impact on fares.
Having largely ignored the repeated pleas for stimulus package, the government has now declared a new three-tier pay scale for the waterway workers in which an employee will be guaranteed a minimum of roughly Tk. 5000. That's exactly the pay garments workers have been demanding for over two years. As of a couple of days ago, the Bangladesh Garments Manufacturers and Exporters Association (BGMEA) in its tripartite discussions had proposed Tk. 2000 against a demand of Tk. 6250 as minimum pay. The talks broke down and now the BGMEA want to conduct surveys to get information on cost of living etc. As it is the industry appears to be isolated. This statement will do little to endear them. They really should have done their homework much earlier and perhaps tapped in to the government's own rationale for their pay increases. Prior to the talks, garments industry owners privately conceded that most of their members could not afford to pay Tk. 5000 whereas pay-scales in several other sectors were much lower. However, they have never really come out public with specific facts and figures that would convince others of the prudence of their arguments. Given the government's declaration of announcing a new wage structure before Ramadan, the crunch really has come to the grind.
The industry has before it two rather unfriendly situations. World-wide demand for garments-especially top-end market clothing has declined. In the midst of this, buyers continue to squeeze margins-almost unrealistically while insisting on expensive compliance processes to be put in place. The second situation is the continuing violence and vandalism in the factories that has its own cost in terms of repairs, expensive machinery replacements and work-stoppage leading to missed delivery deadlines.
There will be other demands for pay scale revisions. Teachers have long moaned about their pitiable pay and emoluments and issue the Education Minister has declared will be solved shortly. And now port workers have gone on strike to push ahead their claims.
Economically, pay rises are an inevitability given the prices of essentials, services and utilities even at the bottom of the social ladder. Private companies always plan their annual increments and inflationary adjustments during their company plan and budget sessions. There are significant learnings from the private sector, especially the multinationals in the matter of proper and fair remuneration
The government always seems to be behind on these factors preferring either back-dated implementation of new scales or, the now abandoned practice of the past-ad-hoc increases through dearness allowances.
The success in controlling unrealistic price increases immediately after announcement of the budget is a major feather in the cap for the Finance Minister this year but one has to wait until the final budget for truth of the pudding. Any salary revision in the private sector has a chain re-action. Take the transport sector for example. Very few CNGs operate on their meter on the simple grounds that when metered fares were introduced, their daily deposit to the owners was in the range of Tk.400-500. Today this is anywhere in the area of Tk. 700-800. Hence their instant decision to ignore the meters -- either say it doesn't work or just say there has to be a Tk. 20 over and above the metered fare or even that they won't use the meter at all. With public transportation still inadequate to meet demand, commuters have very few options. So where, indeed does the extra money come from?
Sometimes, there really are no answers to silly questions!
(The writer is a former Head of Corporate & Regulatory Affairs of British American Tobacco Bangladesh, former Chief Executive Officer (CEO) of Bangladesh Cricket Board and specializes in corporate affairs, communications and corporate social responsibility. He can be reached at e-mail: mahmudrahman@gmail.com)
Roughly a year ago in this column the point of impending salary increases and the impact on the economy had been made. That was when the government, true to its election pledge had announced that a new pay scale for employees was to be made. It subsequently was. Yet, at that time the simmering discontent amongst garments workers about better pay was a far more dominant discussion point not because the government pay scales were not important but simply because they didn't resort to the rather unpleasant option of violence to achieve their goals. Similar is the case with the waterways employees who also resorted to a strike to drive their point home. The question that hasn't been asked of owners of private operations on the waterways is where they will get the money from and the subsequent impact on fares.
Having largely ignored the repeated pleas for stimulus package, the government has now declared a new three-tier pay scale for the waterway workers in which an employee will be guaranteed a minimum of roughly Tk. 5000. That's exactly the pay garments workers have been demanding for over two years. As of a couple of days ago, the Bangladesh Garments Manufacturers and Exporters Association (BGMEA) in its tripartite discussions had proposed Tk. 2000 against a demand of Tk. 6250 as minimum pay. The talks broke down and now the BGMEA want to conduct surveys to get information on cost of living etc. As it is the industry appears to be isolated. This statement will do little to endear them. They really should have done their homework much earlier and perhaps tapped in to the government's own rationale for their pay increases. Prior to the talks, garments industry owners privately conceded that most of their members could not afford to pay Tk. 5000 whereas pay-scales in several other sectors were much lower. However, they have never really come out public with specific facts and figures that would convince others of the prudence of their arguments. Given the government's declaration of announcing a new wage structure before Ramadan, the crunch really has come to the grind.
The industry has before it two rather unfriendly situations. World-wide demand for garments-especially top-end market clothing has declined. In the midst of this, buyers continue to squeeze margins-almost unrealistically while insisting on expensive compliance processes to be put in place. The second situation is the continuing violence and vandalism in the factories that has its own cost in terms of repairs, expensive machinery replacements and work-stoppage leading to missed delivery deadlines.
There will be other demands for pay scale revisions. Teachers have long moaned about their pitiable pay and emoluments and issue the Education Minister has declared will be solved shortly. And now port workers have gone on strike to push ahead their claims.
Economically, pay rises are an inevitability given the prices of essentials, services and utilities even at the bottom of the social ladder. Private companies always plan their annual increments and inflationary adjustments during their company plan and budget sessions. There are significant learnings from the private sector, especially the multinationals in the matter of proper and fair remuneration
The government always seems to be behind on these factors preferring either back-dated implementation of new scales or, the now abandoned practice of the past-ad-hoc increases through dearness allowances.
The success in controlling unrealistic price increases immediately after announcement of the budget is a major feather in the cap for the Finance Minister this year but one has to wait until the final budget for truth of the pudding. Any salary revision in the private sector has a chain re-action. Take the transport sector for example. Very few CNGs operate on their meter on the simple grounds that when metered fares were introduced, their daily deposit to the owners was in the range of Tk.400-500. Today this is anywhere in the area of Tk. 700-800. Hence their instant decision to ignore the meters -- either say it doesn't work or just say there has to be a Tk. 20 over and above the metered fare or even that they won't use the meter at all. With public transportation still inadequate to meet demand, commuters have very few options. So where, indeed does the extra money come from?
Sometimes, there really are no answers to silly questions!
(The writer is a former Head of Corporate & Regulatory Affairs of British American Tobacco Bangladesh, former Chief Executive Officer (CEO) of Bangladesh Cricket Board and specializes in corporate affairs, communications and corporate social responsibility. He can be reached at e-mail: mahmudrahman@gmail.com)