Despite the announcement of a promised 56 percent increase in the minimum wage for garment workers, the actual growth in incomes is about half the pledged amount, according to an analysis by Transparency International Bangladesh (TIB).
TIB presented its findings in a letter accompanied by analysis to the Minimum Wage Board.
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In the letter to the chairman of the Minimum Wage Board, TIB pointed to factors mitigating the proposed upward revision in wages, citing a meager 5 percent increase in the basic wage, inflation, and fluctuations in the exchange rate. The proposed minimum wage revision, according to TIB, results in only a 30% real increase for garment workers.
Taking into account factors such as living standards, cost of living adjustments, international labor standards, and other relevant criteria, TIB argued that the proposed minimum wage review falls short of addressing the workers' needs adequately.
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TIB stated that the previous directive in 2018 recommended a yearly increase of 5 percent in the basic wage. However, the new proposed minimum wage for Grade Seven, or Grade Five in the new scale, is set at Tk 12,500, representing a 52.32% increase. While officially claimed to be a 63% hike, the actual increase is only 28.04%. Similarly, Grade Four sees an increase of 26.52%, and Grades Three, Two, and One witness growth rates of 24.16%, 23.97%, and 24.71%, respectively.
Adjusted for inflation, the actual increase in the basic wage is even lower. For Grade Five, the proposed basic wage is Tk 6,700, supposedly a 63% increase. However, the real increase is only 20.24%. Similar trends are observed for Grades Four, Three, Two, and One, with growth rates of 18.81%, 16.59%, 16.41%, and 17.11%, respectively.
On the international scale, although the total wage is considered to be 60% of the total remuneration, Bangladesh's proposed wage structure puts it at 53-56%. Despite the opportunity for a 5% annual increase in the basic wage, future days may see a comparatively meager wage hike for the workers due to the vulnerability of the wage structure.
Reflecting on the stark reality of a 53-56% wage increase for workers, TIB's Executive Director, Dr Iftekharuzzaman, expressed concern, emphasizing that in comprehensive analyses, the proposed minimum wage for garment workers falls short of meeting their essential needs. Dr Iftekharuzzaman highlighted the weak points in the proposed structure, asserting that Bangladesh, as a major contributor to the global garment market, is providing the lowest wages in the world even after the hike.
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Against this background, TIB urged the Minimum Wage Board for a reevaluation based on realistic considerations. The letter stresses the importance of fair wages, considering the workers' basic needs, high inflation rates, and the socioeconomic factors affecting their livelihoods. TIB called for collaborative discussions between all stakeholders involved to ensure a just and adequate minimum wage for garment workers.