Wage hike off agenda as garment owners count fallout of global financial meltdown
Tuesday, 14 October 2008
Mushir Ahmed
Promise of a wage hike for the country's more than 2.5 million garment workers have been pushed off the agenda, as the factory owners were busy calculating the fallout of the global financial crisis on their exports.
While the buying houses and economists have yet to discern a clear picture of the export orders for the country's more than 4500 factories, leaders of two manufacturers association forecast a clear downturn for the industry.
They have already opposed a proposed wage-hike that the government and union leaders have been pushing for in the wake of skyrocketing prices of food and commodities in the local and international markets.
"If the world enters into recession, our export orders are bound to take a nasty blow," Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) president Fazlul Haque said.
"Already there is a fall in export orders and it could continue for a long time," he said, adding September shipment orders from Europe and US have already dropped seven per cent even before the crisis hit the Bangladesh shore.
Haque's group, which boasts 1300 factories as its members, had promised a 20 per cent increase of salaries last month, weeks before the financial meltdown started to engulf the United States and western Europe.
As an immediate repercussion, the BKMEA has ruled out any immediate implementation of its wage-hike promise, saying everyone should instead prepare for the coming economic maelstorm.
"An economic cyclone is forming in the either side of the Atlantic. And everyone including the government should take precautionary measures to face it," he said.
Leaders of the Bangladesh Garments Manufacturers and Exporters Association (BGMEA) also echoed the same sentiment, saying a crisis is looming over the industry after the global financial tsunami in the US and Europe.
The two markets accounted for more than 90 per cent of Bangladesh's US$10.7 billion garment exports in 2007-8 fiscal year, and there is no sign of their diminishing importance.
"Any setback in the single biggest export market (the United states) will push the sector to danger," said Anwar-ul Alam Chowdhury Parvez.
"More than 700 chain stores of major U.S apparel brands that outsource to Bangladesh have either wound up or are planning to do so with the financial crisis spreading fast across the continents," he added.
The BGMEA leaders, who early last month publicly said they were considering wage hikes given the magnitude of the price hikes, have now pushed the wage hike in the sideline.
Union leaders have accused the manufacturers of "cooking up" a crisis out of nowhere in a bid to delay the pending wage hikes for millions of garment workers.
A garment worker in Bangladesh earns a basic minimum salary of Tk 1662.50 after a tripartite agreement among the manufacturers, union leaders and the government in October 2006.
"What we have learnt from fellow workers is that most of the garment factories have been awash with orders," said Ahmed Haq Amin, general secretary of National Garments Workers Federation.
"Our workers are breaking their backs to execute the export orders in time by working day and night. Yet, we are now witnessing the same old stories of falling orders, impending crisis etc generated by the owners," he said.
Amin accused the manufacturers of creating the crisis "on paper" in a bid to ease the pressure on wage hikes. He, however, warned of labour troubles in the sector if the salaries are not increased within months.
"During Ramadan, we were busy demanding bonus. But very soon we will raise voice for wage hikes. It has become a due for more than a year," he said.
Shamima Nasrin, president of Swadhin Bangla Garments Federation, said the wages should be increased immediately, as most of the export orders were placed three-six months ago.
"They are citing American (financial) collapse for the drop in orders. But we know that all the factories have plenty of orders and they can easily increase the workers salaries," she said.
She said a research done by Unnyan Onneshan, a local development group, has found that in the present context --- with rice and house rent up by at least 50-80 per cent in the last one year-- a garment worker should be paid a basic minimum salary of Tk3900.
"Our workers are struggling to maintain a decent life. The manufacturers should immediately hike their salaries if they want to keep them in workplaces."
"Otherwise, the workers may be forced to hit the streets again," she warned.
The country's more than 4500 factories employ more than 2.5 million workers who last year accounted for 40 per cent of the total industrial workforce. Some 80 per cent of the workers are women.
Promise of a wage hike for the country's more than 2.5 million garment workers have been pushed off the agenda, as the factory owners were busy calculating the fallout of the global financial crisis on their exports.
While the buying houses and economists have yet to discern a clear picture of the export orders for the country's more than 4500 factories, leaders of two manufacturers association forecast a clear downturn for the industry.
They have already opposed a proposed wage-hike that the government and union leaders have been pushing for in the wake of skyrocketing prices of food and commodities in the local and international markets.
"If the world enters into recession, our export orders are bound to take a nasty blow," Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) president Fazlul Haque said.
"Already there is a fall in export orders and it could continue for a long time," he said, adding September shipment orders from Europe and US have already dropped seven per cent even before the crisis hit the Bangladesh shore.
Haque's group, which boasts 1300 factories as its members, had promised a 20 per cent increase of salaries last month, weeks before the financial meltdown started to engulf the United States and western Europe.
As an immediate repercussion, the BKMEA has ruled out any immediate implementation of its wage-hike promise, saying everyone should instead prepare for the coming economic maelstorm.
"An economic cyclone is forming in the either side of the Atlantic. And everyone including the government should take precautionary measures to face it," he said.
Leaders of the Bangladesh Garments Manufacturers and Exporters Association (BGMEA) also echoed the same sentiment, saying a crisis is looming over the industry after the global financial tsunami in the US and Europe.
The two markets accounted for more than 90 per cent of Bangladesh's US$10.7 billion garment exports in 2007-8 fiscal year, and there is no sign of their diminishing importance.
"Any setback in the single biggest export market (the United states) will push the sector to danger," said Anwar-ul Alam Chowdhury Parvez.
"More than 700 chain stores of major U.S apparel brands that outsource to Bangladesh have either wound up or are planning to do so with the financial crisis spreading fast across the continents," he added.
The BGMEA leaders, who early last month publicly said they were considering wage hikes given the magnitude of the price hikes, have now pushed the wage hike in the sideline.
Union leaders have accused the manufacturers of "cooking up" a crisis out of nowhere in a bid to delay the pending wage hikes for millions of garment workers.
A garment worker in Bangladesh earns a basic minimum salary of Tk 1662.50 after a tripartite agreement among the manufacturers, union leaders and the government in October 2006.
"What we have learnt from fellow workers is that most of the garment factories have been awash with orders," said Ahmed Haq Amin, general secretary of National Garments Workers Federation.
"Our workers are breaking their backs to execute the export orders in time by working day and night. Yet, we are now witnessing the same old stories of falling orders, impending crisis etc generated by the owners," he said.
Amin accused the manufacturers of creating the crisis "on paper" in a bid to ease the pressure on wage hikes. He, however, warned of labour troubles in the sector if the salaries are not increased within months.
"During Ramadan, we were busy demanding bonus. But very soon we will raise voice for wage hikes. It has become a due for more than a year," he said.
Shamima Nasrin, president of Swadhin Bangla Garments Federation, said the wages should be increased immediately, as most of the export orders were placed three-six months ago.
"They are citing American (financial) collapse for the drop in orders. But we know that all the factories have plenty of orders and they can easily increase the workers salaries," she said.
She said a research done by Unnyan Onneshan, a local development group, has found that in the present context --- with rice and house rent up by at least 50-80 per cent in the last one year-- a garment worker should be paid a basic minimum salary of Tk3900.
"Our workers are struggling to maintain a decent life. The manufacturers should immediately hike their salaries if they want to keep them in workplaces."
"Otherwise, the workers may be forced to hit the streets again," she warned.
The country's more than 4500 factories employ more than 2.5 million workers who last year accounted for 40 per cent of the total industrial workforce. Some 80 per cent of the workers are women.