Buyers want wage review | The Daily Star
12:00 AM, July 26, 2012 / LAST MODIFIED: 12:00 AM, July 26, 2012

RMG Worker Unrest

Buyers want wage review

Labour minister for ration system

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The wages of garment workers should be immediately readjusted in line with inflation and the consumer price index to quell persistent unrest in the industry. This was the demand of top buyers of Bangladeshi garment products yesterday.
Twelve leading buyers of brand products, including Walmart and JC Penny, conveyed to Labour and Employment Minister Khandker Mosharraf Hossain their deep concern about worker unrest over pay raise and prospects for their businesses in Bangladesh.
The brand companies, which are compliant to workers' rights, pressed the minister for initiating a transparent and reliable wage review process soon at a meeting where journalists were not allowed at the request of the buyers.
The minimum wage for garment workers was first set in 2006 and revised again in November 2010, when the monthly pay of an entry level worker was increased from Tk 1,662 to Tk 3,000.
The minister, on the other hand, played down the concerns of the buyers. “There is no reason to be worried,” he told the press after the meeting.
The country's situation has not reached a point where international buyers will cancel orders and go for other destinations, he argued. Sitting beside him were the buyers, who appeared grim-faced and remained tight-lipped.
There is no plan to review the wage structure at the moment. Rather the government will offer some basic food items at subsidised prices.
“We are planning to introduce rations so that the garment workers can buy food items at lower prices”, the minister said at his secretariat office.
He observed that the intermittent rise in house rents was eating up the bulk of the income of garment workers. The government will review the rent control act soon and implement it strictly so that house rents cannot be hiked frequently, he said.
The buyers are, however, far from being happy with these assurances, confided sources close to them. All they want is a permanent solution to this wage issue, they say.
Earlier this month, brand companies were very critical of violent protests, acknowledging at the same time workers' frustrations, heightened by inflation.
Government statistics show that overall inflation stood at 8.56 percent last month. Food inflation in June came down to 7.08 percent from 7.46 percent a month ago. It was 13.75 percent in last September. Non-food inflation hit a record 13.96 percent in March, but stood at 11.72 percent last month.
Against this backdrop, the garment buyers urged the government to conduct at least one annual review of minimum wages in line with the inflation and consumer price index.
At the meeting yesterday, the buyers pointed out that the pattern of unrest had led to a lack of confidence in the long term stability and sustainability of the industry. All the violence between 2010 and 2012 has been driven by demands for wage increase.
The closure of (about 350) factories for 10 days in Ashulia had created a negative impact on on-time delivery of orders, said the buyers, asking the minister to take realistic steps so that the garment and textile sector could resolve the issue permanently and move on.
If an acceptable wage formula was agreed upon and reviewed in every one or two years, the workers' unrest could be minimised to a great extent, they observed.
The minister invited the buyers to raise their purchase prices. “If you can increase Tk 25, I will give Tk 20 to workers and Tk 5 to manufacturers,” said the minister in a lighter vein. The buyers remained silent in response.
The brand leaders decided to take a united step soon after the latest spat of violence in Ashulia last month, two and a half months after the forced disappearance of labour leader Aminul Islam, said a source close to the buyers.
The buyers are due to meet Prime Minister Sheikh Hasina by the middle of next month, and hold a series of meetings with ministries as well as with two garment exporters associations to have their concerns addressed.
The other buyers who attended the meeting were Lindex, G-Star, Gap, C&A, M&Q, Primark, New Look, Marks & Spencer, New Wave, Nike Inc and Kwintet.

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