Wage Dispute Looms Over Bangladesh's Garment Sector

As the clock ticks towards a potential minimum wage revision in Bangladesh's garment industry, labor groups are urging the government to act swiftly. They are calling for the establishment of a new Minimum Wage Board to review the current wage of 12,500 taka ($102) per month by December, claiming that a new three-year review cycle should apply to this wage that was set in 2023.

However, garment manufacturers are pushing back against this timeline. They argue that applying the new review cycle retroactively would unfairly change the rules, suggesting that the next wage review should not occur until 2028. This disagreement leaves the government in a precarious position, as it must navigate a conversation about wage increases in an industry that has previously seen violent protests over worker compensation.

In April, the Bangladeshi parliament enacted the Labour (Amendment) Act, which shortened the minimum wage review cycle from five years to three. The IndustriALL Bangladesh Council insists that the clock for the current wage began when it took effect in December 2023, and they stress that the process to form a wage board will be lengthy.

The Asia Floor Wage Alliance (AFWA) has also called for the board to be established by August, arguing that the existing wage no longer meets workers' basic needs amid rising living costs. Inflation is a significant concern, with the national consumer price index soaring 25 percent since December 2023, according to the Bangladesh Bureau of Statistics.

Despite ongoing labor unrest and a significant wage increase in 2023, manufacturers assert that they are unable to absorb another hike due to ongoing economic pressures. The Bangladesh Garment Manufacturers and Exporters Association and the Bangladesh Knitwear Manufacturers and Exporters Association are awaiting implementation rules for the new labor law while citing challenges such as energy shortages and low global demand.

Source: wwd.com