Wages Challenges in the Garments Industry of Bangladesh are the main challenges for developing the garments industries. Although Bangladesh is not developed in industry, it has been enriched in Garment industries in recent past years. In the field of Industrialization garment industry is a promising step. The sector now dominates the modern economy in export earnings, secondary impact and employment generated. It has given the opportunity of employment to millions of unemployed, specially innumerable uneducated women of the country. It is making a significant contribution in the field of our export income
Wages Challenges in Garments Industry
Problems surrounding readymade garments sector:
The government of Bangladesh sets minimum wages for various categories of workers. According to The Minimum Wage Ordinance 1994, apprentices helpers are to receive Tk500 and Tk930 per month respectively. Apprentices are helpers who have been working in the garment industry for less than three months. After three months, Apprentices are appointed as helpers. Often female helpers are discriminated against in terms of wage levels, and these wages are also often fixed at the minimum wage rate. A survey conducted in 1998 showed that 73% of female helpers, as opposed to 15% of their male counterparts, did not receive even the minimum wage.
Unit labor cost:
Bangladesh has the cheapest unit labor cost in South Asia. It costs only 11 cents to produce a shirt in Bangladesh, whereas it costs 26 cents in India and 79 cents in Sri Lanka. Clearly, Bangladesh’s comparative advantage lies in having the cheapest unit labor cost.
The latest data collected from industry sources show that the monthly minimum wages for garment workers vary significantly in the world, ranging from as low as USD $26 in Ethiopia to USD $1,764 in Belgium in 2019. The world average stood at USD $470/month that year.
On the other hand, we need to interpret the minimum wage level in the context of the local living wage. According to the International Labor Organization (ILO), a living wage is defined as the theoretical income level that an individual must earn to pay for basic essentials such as shelter, food, and water in the country where a person resides. As shown in the figure above, a high minimum wage in absolute terms does not always guarantee a high standard of living and vice versa. For example, while the United States offers one of the world’s highest minimum wages for garment workers (USD $1,160/month), that minimum wage level was only about 70% of the living wage (USD $1,660/month) 2018-2019. In comparison, garment workers in Indonesia earned a much lower nominal minimum wage of USD $181/month. That wage level, however, was much higher than the reported USD $103/month living wage over the same period.
Though the wages are low, the working hours are very long. The RMG factories claim to operate one eight-hour shift six days a week. The 1965 factory Act allows women to work delivery deadlines; however, women are virtually compelled to work after 8 o’clock. Sometimes they work until 3 o’clock in the morning and report back to start work again five hours later at 8 o’clock. They are asked to work whole months at a time the Factory Act, which stipulates that no employee should work more than ten days consecutively without a break.
Lack of managerial knowledge:
There are some other problems which are associated with this sector. Those are- lack of marketing tactics, absence of easily on-hand middle management, a small number of manufacturing methods, lack of training organizations for industrial workers, supervisors and managers, autocratic approach of nearly all the investors, fewer process units for textiles and garments, sluggish backward or forward blending procedure, incompetent ports, entry/exit complicated and loading/unloading takes much time, time-consuming custom clearance etc.
The Ready-Made Garments (RMG) industry occupies a unique position in the Bangladesh economy. It is the largest exporting industry in Bangladesh, which experienced phenomenal growth during the last 25 years.
Given the remarkable entrepreneurial initiatives and the dedication of its workforce, Bangladesh can look forward to advancing its share of the global RMG market.
- Emma Davis (Research Assistant, Fashion and Apparel Studies, University of Delaware) and Dr. Sheng Lu