Low wages, coupled with a constant pressure to maintain production rates, have led to negative ripple effects on garment workers in Bangladesh like dependency of overtime, indebtedness, health hazards and lack of access to basic services, according to a latest study.
Despite being one of the EU's key apparel suppliers, most garment workers here earn wages far below what is needed to cover their basic living expenses, it said.
The new report published from Swedwatch on Thursday also highlighted the devastating consequences of low wages, revealing how the lack of bargaining power, exacerbated by pressure from global buyers, leaves workers heavily dependent on overtime pay and trapped in a cycle of chronic debt.
Bangladesh is Sweden's second largest supplier of textile and clothing following China with imports valued around 8.8-billion SEK in 2022, according to the report.
Swedwatch is an independent and non-profit research organisation safeguarding human rights and environment in business.
Swedwatch's on-site research was conducted in May 2023 in the major garment production hubs of Dhaka, Ashulia and Tongi in collaboration with the Awaj Foundation, an organisation dedicated to advocating for workers' rights in the garment sector.
According to the report, the recent increase in the national minimum wage from Tk 8,000 to Tk 12,500 (€94) per month still leaves workers earning only 38 per cent of what would be considered a living wage.
This wage is also significantly lower than Tk 23,000 (€198) demanded by workers, unions and international organisations, including unions affiliated with IndustriALL Global Union Bangladesh.
This means that essential needs like food, adequate housing, healthcare, and education for their children remain unaffordable for many, reinforcing cycles of debt and exploitation.
Long working hours and excessive overtime are a major concern among Bangladesh's garment workers, it said, adding that under pressure from global buyers to meet production targets and unreasonable deadlines, factory owners often impose 12-16-hour shifts, seven days a week.
"Workers have limited options and accept these excessive hours. A declining proportion of their so-called 'basic salary' has forced them to rely on overtime, while refusal may lead to punishment," the report says.
All of this takes a heavy toll on their well-being, with many workers reporting health concerns such as stress-related illnesses, depression and fatigue, it said.
The minimum wage in Bangladesh consists of a range of elements, including a "basic salary" with allowances for health, housing, transport and food.
The basic salary percentage is especially important for workers as their overtime payment, bonus, yearly pay rise and all other bonuses and benefits, including maternity payments, are calculated based on this basic salary amount.
Moreover, low wages leave workers no option but to accept overtime while basic payment-the main determiner to pay overtime-has been decreasing over the years.
The basic payment of garment workers in Bangladesh has declined by 14 points as the fundamental pay now constitutes to 53.6 per cent of the total minimum monthly wages of Tk 12,500 fixed in 2023.
The basic pay was 67.67 per cent of the minimum wage of Tk 1,663 fixed in 2006, according to the report.
Garment workers in Bangladesh remain trapped in an exploitative system that deprives them of the ability to meet their basic needs. Decades of activism and corporate pledges have yet to secure a so-called living wage - a fundamental human right - for these workers.
"With global brands sourcing garments from Bangladesh facing stricter human rights requirements, they have no excuse but to take an immediate and decisive action aimed at improving workers' access to living wages," says Sofia Käll, programme officer at Swedwatch, who conducted the research in Bangladesh.
The report recommended that global brands should enhance their due diligence efforts by meaningfully engaging with garment workers, unions and non-governmental organisations (NGOs) to address adverse impacts, adopting responsible purchasing practices to prevent wage suppression and ensure worker wellbeing, promoting supply-chain transparency, providing accessible grievance mechanisms and staying engaged to support suppliers and living wages.
Swedwatch called upon EU member states and global brands to unlock the full potential of the CSDD (Corporate Sustainability Due Diligence) directive by guaranteeing fair wages and safe working conditions.
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