Garment wage hike won't erode competitiveness | The Daily Star
12:18 AM, November 05, 2013 / LAST MODIFIED: 12:56 AM, November 05, 2013

Garment wage hike won't erode competitiveness

Economists say the raise will create a positive work environment

Economists said the final recommendation of Tk 5,300 as entry level wage for garment workers would not affect the country's global competitiveness.
With a hike of nearly 77 percent from the existing Tk 3,000 a month, workers will be able to cope with the pressures of inflation, economists said.
“Obviously the hike is a positive sign, although the amount is below workers' demands for Tk 8,114 a month,” said Mustafizur Rahman, executive director of private think-tank Centre for Policy Dialogue.
“I hope Bangladesh's competitiveness in the international market will not erode from the hike. The garment makers will have to enhance productivity, focus on value added items and strengthen the backward linkage industry,” Rahman told The Daily Star.
A positive working environment will be created due to the salary hike, he said, adding that the entrepreneurs should also pressurise international retailers for a price hike to source apparel items from Bangladesh.
Overall, both the wage hike and amendments to the labour law will help paint a positive image of the country worldwide, as Bangladesh's image was tarnished after the Tazreen Fashions fire and Rana Plaza building collapse, he said.

“All these gestures will have a positive impact on garment exports. The fresh hike will also have a positive impact on the lifestyle of the workers and productivity in the factories,” Rahman added.
“But, the government also has roles to play in the whole process,” he said. It should ensure adequate gas and power supplies to the factories, improve infrastructure and maintain efficient port operations, he added.
Executive Director of Policy Research Institute Ahsan H Mansur said the hike was because of greater inflationary pressures on the economy.
“Although entrepreneurs will face difficulties primarily, they will be able to readjust it with additional productivity,” Mansur added.
“But the most important factor is the domestic environment of the country. We should keep in mind that the country's exports are not affected by political unrest.”
Atiqul Islam, president of Bangladesh Garment Manufacturers and Exporters Association, said they rejected the new salary structure as the industry will lose its competitiveness.
“I am rejecting the Tk 5,300 as the minimum salary. Our garment industry will lose its competitiveness. The industry will no longer be sustainable due to this hike,” he said.
“The wage board has forced this hike upon us. I met the labour minister and I told him that the garment makers have rejected the hike,” Islam said.
He said meeting will soon be called with leaders of the garments sector to announce the next course of action.
“I urged the board chairman to review the structure as soon as possible. The small and medium garment owners will face difficulties in implementing the hike,” said Arshad Jamal Dipu, the owners' representative of the board.
He said there are nearly 2,200 small and medium garment factories in the country.

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