Why CPD's proposal is not acceptable

On October 8, the Centre for Policy Dialogue (CPD), a well-known think tank in the country, proposed a minimum wage of Tk 17,568 per month for garment workers. Despite highlighting the plight of garment workers in Bangladesh in their presentation while proposing a minimum wage, the method used by CPD to calculate that minimum wage betrays a terrible insensitivity towards the workers. Not only that, a number of serious methodological questions arise regarding CPD's calculations.

CPD's adopted accounting method is structurally unfair to workers

How did the CPD calculate the minimum wage for garment workers to be only Tk 17,568, despite stating that the living cost for a family of 3.7 members is Tk 31,942 in their presentation? CPD said they used the accounting method of economist Richard Anker – known as the Anker methodology – to determine the minimum wage. According to this method, when calculating the living wage of a worker, the living cost of the worker's family is divided by the number of full-time workers in the family. Then, a certain percentage of savings is added. As a result, a living wage calculated with the Anker method will always be much lower than the actual cost of living. This is exactly what happened in this case.

The food basket that CPD has considered for an adult worker/an adult member of the worker's family includes rice, flour, millet, potato, grass pea, taro, water spinach, banana, pool barb fish (punti), milk, soybean oil, palm oil, jackfruit seeds, and sugar. Is this list of food realistic for workers? Do workers not need fish, meat or eggs? Will they meet their protein needs by eating only jackfruit seeds and small fish?

But the main problem here is Anker's methodology itself. Anker basically wants to throw away the public perception of the living wage that was established worldwide through the workers' struggle over the past two centuries – a wage which covers the minimum cost of living of the worker and of his/her family. Anker is telling us that the living wage will not be determined by the cost of living of a worker and their families. Rather, it is to be determined by dividing the cost of living by the number of full-time workers in the worker's family! In this case, Anker argues, "One full-time worker per household is unrealistically low for the 21st century. Labour force participation rates for both men and women are too high all around the world to justify this assumption. The days when it might have been appropriate to use a one-person (presumably male) household breadwinner model of the family, as in the United States in the early 20th century, are long gone – if it ever was appropriate."

But if there are two people working in a family, why shouldn't that family get the full wages of two people? In the past, when only one person worked in the family, if you could assume that the entire amount of money calculated to meet the minimum expenses of the person and their family was their living wage, then why, when two members of the family are working in hopes of living a little better, would you not take into account the entire family's expenses when determining the salary for each of them? Are they all working less because two people are working?

This means you are making arrangements for the owner to get almost two workers at the cost of one. The question can be posed from the other end, too: when a factory owner has multiple factories, does the owner reduce the profit per factory to keep the total profit the same? If he does not do that, then why is the living wage of the worker reduced by dividing it by the number of working persons in the family? Is this not wage theft?

Other limitations in CPD's calculations

While the CPD itself estimated in March this year that the food cost for a four-member family in Dhaka is Tk 22,664 per month, in their proposal for the minimum wage of garment workers, they estimated that the required food cost for a worker's family of 3.7 members is only Tk 16,529. According to their previous calculations, this should have been around Tk 25,000. So why is there one calculation for those who live in Dhaka and a different one for garment workers? Why should there be two different food standards for two social strata?

Not only that, the food basket used by CPD to make the calculation is also questionable. The food basket that CPD has considered for an adult worker/an adult member of the worker's family includes rice, flour, millet, potato, grass pea, taro, water spinach, banana, pool barb fish (punti), milk, soybean oil, palm oil, jackfruit seeds, and sugar. Is this list of food realistic for workers? Do workers not need fish, meat or eggs? Will they meet their protein needs by eating only jackfruit seeds and small fish? Do workers eat millet regularly?

Even Richard Anker himself has repeatedly said that his method of calculating the cost of living should take into account the cost of a basic but decent life for workers and their families. In this case, how decent is CPD's food basket? And how decent is the cost calculation that CPD has done for non-food items for the worker's family? They have estimated the education cost of the worker's child at Tk 2,653 per month. Even students at ordinary schools have to avail private tutoring these days. This has become the norm in our market economy. Is it possible to manage the cost of books, notebooks, pens, other educational materials, transportation for education, and private coaching for a student with that money? The monthly family medical expenses have been estimated at Tk 1,378. In reality, if a person contracts dengue, even if they go to a government hospital, the cost of treatment-related ancillary is at least Tk 10,000.

Richard Anker, whose method CPD has used, has repeatedly said that the cost of decent housing must be considered when calculating costs. With the rent of Tk 4,765 and a utility bill of only Tk 508 that the CPD has calculated, can a decent house be rented in any city in this country?

It is therefore evident from the food basket and other cost categories given by the CPD that their calculations have failed to capture the reality of garment workers. The actual cost of living is much higher than the cost they have shown.

Even though Richard Anker divides the total cost of living into the number of full-time working members in the family while calculating the living wage, he also clearly says, "Assuming that both parents work full-time is similarly unrealistic." That is why he has suggested that it is better to take 1.5 instead of 2 as the number of people working full-time in the family. Even Anker himself, in his work on the living wage of garment workers in Bangladesh, has taken the number of full-time working family members as 1.5, not 2. And it is noteworthy that he used the term "full-time workers," not just "earners." It shows that he knows there can be underemployed earners, especially in developing countries.

However, in CPD's calculation using Anker's methodology, they have used the term "earning member" instead of "full-time worker," and have taken the number of working family members as two. It is important to ask whether this is appropriate because, if CPD had not taken this number as two but as 1.5 (as per Anker's opinion), then even with their flawed calculation of the cost of living, the minimum wage would have come up to almost Tk 23,500. And if they had used their calculation for food costs in March to calculate the cost of living for the worker's family, even the use of Anker's method – which is unfair to workers – would have resulted in a minimum wage of more than Tk 26,000!

The Anker Research Institute itself estimated last year that the living wage of garment workers in Bangladesh should have been Tk 23,254 in 2022, which means that it would currently be Tk 25,000 or more if adjusted for inflation. It is to be noted that the Anker Research Institute took the number of full-time employed persons in the worker's family not as two, but as 1.58.

It is clear that CPD's proposal for the minimum wage of garment workers is in no way justifiable, and therefore is not acceptable. A living wage is a fundamental human right for every worker. Even the minimum wage of Tk 25,000 demanded by various labour organisations for garment workers cannot completely cover their cost of living. In the end, workers are actually demanding less than what they require.

This article, originally published in the online magazine Sarbojonkotha, has been translated from Bangla by Naimul Alam Alvi.

Mahtab Uddin Ahmed is a writer, researcher and activist.

Views expressed in this article are the author's own.

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