DHAKA, Bangladesh — Following months of violent protests in Bangladesh’s garment industry, Labor Minister Khandaker Mosharraf Hossain said Thursday that the government would nearly double the wage rate for the country’s three million garment workers in November.
The move came under intense pressure from workers, workers’ rights groups and the U.S. and European Union at a time when retailers and brands are increasing apparel production there to offset rising costs in China. The garment industry, which exported $12.5 billion for the 12 months through June, accounts for nearly 80 percent of Bangladesh’s annual exports. It employs 3.5 million workers in about 5,000 apparel factories, where about 80 percent of the workers live in poverty.
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Over the past three months, protests and strikes over the minimum wage often turned violent and destructive, and resulted in work suspension of several hundred factories and fatalities in and around Dhaka, the capital.
The Bangladesh Minimum Wage Board, compromised of representatives of workers, apparel manufacturers and the government, weighed the competing wage hike proposals and issued its final recommendations to the government on Tuesday, after seven months of negotiations. The minimum wage will increase from 1,622 taka to 3,000 taka a month, or about $24 to $43 at current exchange, for entry-level garment workers on Nov. 1.
“The government was committed to meet the demands of the workers,” the labor minister said.
Workers wanted the rate, which was last raised in 2006, to be raised to 5,000 taka, or $72, a month for entry-level workers.
The two main apparel manufacturing associations, the Bangladesh Garment Manufacturers & Exporters Association and the Bangladesh Knitwear Manufacturers & Exporters Association, were said to have agreed to the new minimum increase based on certain conditions. Apparel factory owners have said in news reports they are concerned the wage increase will squeeze their margins and could force smaller factories out of business.
“Many of the factories would not be able to pay the minimum per month, as apparel buyers [want lower] prices in a postrecession scenario,” said BGMEA president Abdus Salam Murshedy.
Several workers’ groups condemned the wage hike, saying it will not cover basic living expenses.
“We reject the new wage structure, as it will not help meet the present living cost, particularly skyrocketing prices of food and other essentials…and we will continue to demonstrate our protest in August, demanding [5,000 taka] per month as the minimum wage,” said Mushrefa Mishu, president of the Bangladesh Garment Workers’ Unity Forum, the leading workers’ organization.