Although the minimum wages of garment workers were announced to be increased by 52-56 percent, the actual increase was 25-28.88 percent. Transparency International Bangladesh (TIB) has presented this picture of salary increase for garment workers taking into account the 5 percent annual salary increase mentioned in the previous wage structure, inflation, dollar exchange rate appreciation. Referring to the issue, the organization has written to the Chairman of the Minimum Wage Board and called for a review of the wages.
The TIB said the letter sent to the Minimum Wage Board chairman and the analysis showed that the wages of garment workers did not increase by 30 percent in real terms after taking into account the 5 percent annual salary increase, inflation, appreciation of dollar exchange rate. Bangladesh has the lowest wages compared to competing countries in the global market for readymade garment exports. According to the newly announced framework, the wages of garment workers in Bangladesh will remain the lowest.
In a letter sent to the Minimum Wage Board, TIB said, as per the minimum wage structure published on October 8, 2018, there are instructions to increase the basic wages at the rate of 5 percent every year. Accordingly, the basic wages in the previous grade seven or the new proposed grade five in 2023 should be at least Tk 5232.75. The proposed new basic pay in this grade is Rs.6700. That is, though the basic wages in this grade are said to have increased by 63 percent, it has actually increased by 28.04 percent. In the case of grade four, this growth rate is 26.52 percent. Similarly, in respect of grades three, two and one, the basic pay will be increased by 24.16 per cent, 23.97 per cent and 24.71 per cent respectively.
If the basic wage increases at the rate of 5 percent every year, the minimum gross wage in the new proposed grade five in 2023 will be Rs. 9699.13. As per the new proposed wage structure, the total wage proposed in this grade is Rs.12500. That is, 56 percent of the total wage is said to have been increased, but it has actually increased by only 28.88 percent. Similarly, in the case of grades four, three, two and one, the total wage growth rate is only 27.59 per cent, 25.58 per cent, 25.35 per cent and 25.93 per cent respectively.
TIB’s analysis showed that the actual rate of increase in basic wages after adjusting for inflation was lower. According to the agency’s calculations, the minimum basic wages for garment workers in grade five should be Rs 5,572.26 when adjusted for inflation, while the new proposed basic wages are Rs 6,700. That is, the basic wage is said to be increasing by 63 percent, but it is actually increasing by 20.24 percent. Similarly, the actual rate of increase in basic wages in grades four, three, two and one stood at 18.81 per cent, 16.59 per cent, 16.41 per cent and 17.11 per cent respectively. As seen in gross wages, a grade five worker is expected to earn Rs 9,913.50 in 2023 after taking inflation into account. Although the total wage is said to have increased by 56 percent to Tk 12,500 in this grade, if inflation is taken into account, the total wage growth rate is only 26.09 percent. Inflation-adjusted real wage growth rates in grades four, three, two and one are 24.80 per cent, 22.80 per cent, 22.55 per cent and 23.10 per cent respectively.
In all such facts, the wages of the workers have been increased by 53-56 percent – TIB Executive Director Dr. Iftekharuzzaman said, in various reliable studies and analyses, we can see that, overall, the new proposed minimum wage for garment workers is much lower than the living requirements. As the world’s second largest garment exporter, it is truly shameful that Bangladesh does not pay garment workers a reasonable wage to meet their minimum basic needs.