Bangladesh: Why garment workers are taking to the streets to demand better wages
By Juliette Tafreschi, November 08, 2023
A long way to go - the glaring gap between the minimum wage demanded and the minimum wage offered
Protests Escalate in Bangladesh Amid Political Tensions
The protests on October 31 in Bangladesh, where thousands of garment workers have taken to the streets to demand higher minimum wages, have intensified. According to recent media reports, at least two protesters were killed and dozens more injured in clashes with the police last week. The country has been struggling with underlying political tensions for several weeks and the protesting workers have been joined by opposition supporters calling for the resignation of the prime minister. Parliamentary elections are scheduled for January 2024. (1)
Garment Workers Demand Higher Minimum Wage
The garment workers' protests were triggered by an offer from the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) to increase the monthly minimum wage by 25% from 8,300 taka ($75) to 9,900 Tk ($90). However, this proposed amount falls considerably short of the workers' demand for a minimum wage of 23,000 Tk (equivalent to $208). (2)
Bangladesh's Economic Challenges: Inflation and Foreign Reserves
Despite the steady annual economic growth in Bangladesh, the country is struggling with the problem of rising inflation. The rising cost of living, especially food prices, is a major cause for concern. In September, an inflation rate of 9.6% was recorded. In addition, foreign exchange reserves have shrunk from a high of $48 billion (£39.49 billion) in August 2021 to around $20 billion, which is not even enough to cover three months of imports, according to the BBC. As a result, Bangladesh asked the International Monetary Fund for help earlier this year. (3)
Garment Workers and Union Voices
Based on a report by the Guardian, garment workers who took part in protests in Dhaka said that anything less than 23,000 taka ($208) a month would condemn their families to starvation. "The leggings I make cost more in retail than my entire monthly salary," said one garment worker with young children to the Guardian, who asked not to be named. "It is clear to us that huge profits are being made on our backs. Even the 23,000 taka we are asking for would not be enough, but it would bring some relief. Why should my children go hungry?" (4)
Fair wages? So far, merely a lip service from brands
Among the factories on strike, according to Kalpona Akter, president of the Bangladesh Garments and Industrial Workers Federation (BGIWF), are "many of the country's larger factories, which make clothes for almost all major Western brands and retailers." Including brands like GAP, Walmart, H&M, Zara, Inditex, Bestseller, Levi's, Marks and Spencer, Primark and Aldi. (5)
When asked, brands state that they support the process of increasing the minimum wage in Bangladesh and call on the government to introduce a transparent wage-setting process. They also endorse and support the ACT Agreement, an agreement that aims to achieve living wages for workers in the textile and garment industry. However, simply making public statements and signing agreements on the part of the brands will not lead to anything unless concrete measures are implemented. This includes, for example, a willingness to raise prices to help suppliers cover wage increases. (6)
From Ideals to Reality: The UN Guiding Principles on Business and Human Rights
The UN Guiding Principles on Business and Human Rights have been in place since 2011. They emphasize the responsibility of companies to ensure fair wages for workers, regardless of whether the local legal minimum wage meets the basic standard of living. In cases where the legal minimum wage is not met, companies are obliged to close this gap. (7)
Despite these principles, ongoing research reveals that no major brand can demonstrate that all workers in their supply chain receive a living wage. This issue is not limited to fast fashion, luxury brands, or worker apparel companies. Most garment and sportswear companies do not acknowledge that their business practices directly impact workers' wages, leaving millions of workers without not only fair wages but also access to basic necessities such as healthcare, education, and even time for themselves and their families. The right to a living wage is recognized by international organizations like the Council of Europe and the UN, but it is often disregarded in global production supply chains, even in cases where legal minimum wages are in place. (8)
Living Wage Progress and Gaps in Supply Chain Practices: PLWF's Findings
In April, the Platform Living Wage Financials (PLWF), comprising 20 financial institutions, issued a public statement urging brands to assess how their procurement practices support worker safety standards. Recently, the PLWF released a report on its evaluation of the progress made by companies it invests in towards promoting living wages in their global supply chains in 2023. The report revealed signs of progress in general, including the development of living wage policies and practices. However, it highlighted a lack of evidence demonstrating the effectiveness of these strategies. The report also stressed the need to expand and implement living wage initiatives within day-to-day operations. Additionally, it emphasized the importance of complaint mechanisms and access to remedies to ensure that well-intentioned policies translate into real-world practices, an area where most companies still lag behind. (9)
Bangladesh Garment Workers Express Concerns Over Living Costs Despite Wage Raise
On November 7, State Minister for Labor and Employment Monnujan Sufian announced that the minimum wage for garment workers would be increased by 56.25%. From December 1, garment workers will receive 12,500 taka ($114) per month instead of 8,000 taka. There will also be an annual increase of 5%. This is the first increase since 2019. However, workers are not happy about the increase at a time when inflation is running at 9.5%. "The increase is not enough when the prices of all items and rents have risen sharply. We are working to survive but we can't even meet our basic needs," said Munna Khan, a garment worker, to Reuters. (10).
What does the future hold?
For the textile workers and trade unions, the setting of the new minimum wage is a bitter setback, as it falls far short of the 23,000 taka demanded. As the minimum wage in Bangladesh is only reassessed every five years, there will be little room for improvement before 2028. (11)
To foster positive change and improve the conditions for garment workers in Bangladesh, it is crucial to address the issue of stagnant minimum wages. As the country remains an attractive destination for brands seeking cost-effective production, there lies an opportunity for a more equitable future. Proactive engagement from brands, where they go beyond mere lip service and actively communicate with suppliers to integrate responsible sourcing practices, can be a catalyst for significant improvements in minimum wage standards. Furthermore, it is essential for the government to play a pivotal role by enforcing legal requirements for fair wages. By doing so, they create an environment that encourages brands to invest more effort in reshaping the current status quo. The concept of fair wages for garment workers and the principles of responsible purchasing practices have long been established in theory. The key now lies in the practical implementation of these principles by all stakeholders involved.
(3) https://www.bbc.com/news/world-asia-67282213
(7) https://www.business-humanrights.org/en/big-issues/un-guiding-principles-on-business-human-rights/
(8) https://cleanclothes.org/poverty-wages
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