Peg minimum RMG wages to cost of living: analysts

Economists and rights activists yesterday favoured a system of determining the minimum wages for garments workers by considering the cost of living, not just by taking food inflation into account.
"It will be unwise to fix minimum wages by considering inflation. Factors such as the cost of education, health and others should also be taken into account," said Salehuddin Ahmed, a former Bangladesh Bank governor.
He made the suggestion at a roundtable organised by Chintar Chash, a research firm, on the rights of garments industry workers from the perspective of globalisation, at the National Press Club in the capital yesterday.
He said workers' productivity is linked to wages. "How would a worker pay attention to work if he/she is malnourished?"
The call comes at a time when a new minimum wage is expected to be announced soon for the country's 35 lakh garment workers.
Garment workers, mostly women, receive one of the lowest minimum wages among the major industrial sectors in Bangladesh; it is also the lowest among Bangladesh's competing countries in Asia.
Both owners and workers are human beings and society expects humane behaviour from owners as they are well-educated, said researcher and columnist Syed Abul Maksud.
He said a national dialogue among all stakeholders of the garments industry is important, just as important as the need for a dialogue between the ruling and opposition parties regarding formation of the government on holding the national elections.
"Otherwise we will lose our credibility abroad."
Garments factory owners will have to sacrifice a part of their profits to ensure decent wages for workers, said MM Akash, a professor of economics at Dhaka University.
He said the increased wages might affect some small and medium factories for the time being, but the higher minimum wages at Tk 8,000 for workers would benefit the whole industry.
Bangladesh's competitors in the global apparel market fetch higher export earnings by paying higher wages to their workers, said
Shafique uz Zaman, another professor of economics at Dhaka University.
The local garments industry remains vulnerable to prices offered by the global clothing brands, said AI Mahbub Uddin Ahmed, a sociology professor at Dhaka University.
"Our garment factories are operated and controlled to serve the purposes of these retailers. That's why both the local capital and labour are in trouble," he said, suggesting garment owners brand their products to get rid of the cycle.
Mohammad Hatem, first vice president of Bangladesh Knitwear Manufacturers and Exporters Association, agreed with Ahmed and said international buyers did not agree to a proposal for fair apparel prices at a meeting in Geneva earlier to improve labour conditions in Bangladesh.
Global retailers sell clothes at much higher rates than what they pay the supplying countries, such as Bangladesh, said KAM Saduddin, another sociology professor at Dhaka University.
“But the buyers spend a negligible amount of their sales proceeds for the benefit of workers in our country.”
Taslima Akhter, president of Garment Sramik Sanghati, said ensuring workers' rights, safety and better working conditions at the factories has become important. “Existing wages are too low to keep workers fit for work. They have to work overtime to earn more."