Industry management and labor efficiency should be changed openly, otherwise the country’s industrialists will not stop crying. And yes, it is impossible to increase productivity with all the stupid behavior of the government-owners without taking into account the academic and market research explanations of labor efficiency and productivity growth. As the rising cost of living makes it difficult for low-wage workers to stay in the cities, unable to survive, workers return to the countryside, where there is unemployment and pseudo-unemployment. Expectations of output/efficiency without correct wage adjustments in such cases are unjust. During long periods of high inflation, there is no year-end cost-of-living or wage adjustment process. In exchange for blood and life, after 5 years, the wages should be increased by 20-30 dollars by violent agitation. Unless these backward and exploitative systemic problems in human resource management are stopped, new wage structure, work-life balance allowances and benefits, redefining of working hours after a maximum of 2 years, high productivity in Bangladeshi industry will not come.
Cost of production in Bangladesh is high. Cost of production increases every year in an inflationary economy, Bangladesh is no exception. Conversely, the selling price increases. 1994-2023, in these three decades minimum wages increased 8 times in terms of rupees, export earnings increased more than 60 times in terms of rupees.
However, Bangladeshi products are said to be unable to compete internationally. Why?
Ironically, the country’s ‘NGO-funded’ intellectuals blame the country’s cheap labor on $72-75 a month. They don’t look at the base-price of electricity and fuel, road congestion, extortion, high transport costs, rents, the cost of India Sri Lankan managers hired to trap workers, administration bribery, mosquito and germ-infested cities, health problems and health. Expenditure does not look at direct and indirect ‘rent seeking’ costs including out-of-pocket expenditure rates etc. It is cruel that the garment industry indiscriminately pollutes the environment, not to mention the cost of treatment, and is unable to compete. In fact, Bangladesh ranks second in the world in garment exports.
Yes, we are not hitting global productivity benchmarks, it is because of stupid policies, not workers. Another catalyst is productivity growth in innovation, technological progress. But the claim that the garment industry of Bangladesh is lagging behind in machinery is false. Many things are automated.
According to the data provided by the Asian Productivity Organization, the hourly productivity of a Bangladeshi garment worker in terms of value stands at $3.4. This rate of productivity is relatively high in competing countries at $4.1 in Myanmar, $4.7 in Vietnam, $7.5 in India, $8.7 in the Philippines, over $11 in China and about $16 in Sri Lanka.
Even with low productivity, a worker working an average of 14-15 hours a day makes $1400-1430 a month. The owner pays him $70-80 plus $30-40 overtime. 130-140 dollars in total. A wage of $140 including overtime against labor of $1400. Where exactly is the complaint?
The question is to expect productivity from the practice of making one worker work equal hours per day for two people while perpetuating a culture of extremely low wages, without giving leave and allowances, without even providing tea-coffee-biscuits-safe food and water during working hours, without providing any other job facilities. foolishness The way out of low productivity is a decent living wage, work life balance, holidays and allowances and a comfortable working environment. Child safety and well being.
To increase productivity, give workers a lunch box at noon, which contains a daily supply of calories (meat and nutrients). Pay a fraction of the bus fare to a worker who walks a few kilos, provide commuting – see where productivity goes!
Lack of spending on training and development is a major reason for the low productivity of Bangladesh’s garment industry. Miserly owners (ignorant of strategic knowledge of labor productivity) hire them as helpers in the beginning, thinking it would be a waste of money and man-hours to train less educated new workers from rural or low-income marginal families. Without a statutory framework for skill building, the owners could not leave this low level of learning to work in Peteva. Helper culture results in lower productivity per head as the overall head count of the factory increases. In reality productivity is not low at all. The underprivileged laborer is not a machine that will suck up productivity gains.
There are no training centers to develop industrial yet technical skills of 20 lakh workers. A $50 billion industry lacks education and research. How do they expect high productivity in such a ‘monkey see, monkey do’ system?
It is a fact that if there were no residential Qoumi Madrasahs in the country, the productivity of the garment industry would have been lower as middle-aged male and female workers sent their children to Madrasahs. Government investment in these madrasas is zero. But government-owned Nexus was supposed to provide infrastructure, say industrial labor skills or children’s education and daycare type facilities.
Industry management and labor efficiency should be changed openly, otherwise the country’s industrialists will not stop crying. And yes, it is impossible to increase productivity with all the stupid behavior of the government-owners without taking into account the academic and market research explanations of labor efficiency and productivity growth.
As the rising cost of living makes it difficult for low-wage workers to stay in the cities, unable to survive, workers return to the countryside, where there is unemployment and pseudo-unemployment. Expectations of output/efficiency without correct wage adjustments in such cases are unjust. During long periods of high inflation, there is no year-end cost-of-living or wage adjustment process. In exchange for blood and life, after 5 years, the wages should be increased by 20-30 dollars by violent agitation. If these backward and exploitative systemic problems in human resource management are not stopped and new wage structure, work life balance allowances and benefits, labor hour structure are not redefined after maximum 2 years, high productivity will not come in the industry of Bangladesh.
Compared to China ($303), Indonesia ($243), Cambodia ($200), India ($171), Vietnam ($170), Bangladesh’s average wage is $72-75. The workers demanded a minimum wage of Tk 23,000, which is $190 at today’s November 9, 2023 carb market exchange rate (it was $220 just two weeks ago). This claim is $113 less than the average wage in China. CPD has done a detailed study and proposed a minimum wage of Tk 17,568 in the garment industry, which is $150 at the government rate, but only $140-142 at the curb market rate. In reality, as the purchasing power of money is rapidly declining, export-oriented industries would like to base their wages in dollars, which would be competitive with India or Vietnam (minimum $170). Although the price of daily products in these two countries is relatively cheaper than Bangladesh, still in the capitalist economy, we want to take the minimum wage of 160-170 dollars by balancing the interests of the owners. In this, workers can earn a maximum of $200 including overtime, which will become a living wage in the city.
Bangladesh is second in the world in garment manufacturing, it wants to be first, but does not want to pay wages. They want to raise the monthly wage from $70 to just $100. But once fixed at 100-110 dollars, it will not increase for the next 5 years, as inflation is increasing and the purchasing power of money is decreasing, in reality the minimum wage should be 20 thousand rupees. Otherwise, the steam roller of labor exploitation and discrimination will continue in the next five years, people will be in debt and increasingly poor despite working. To stop this need to adjust the wage structure from year to year.
Another explanation is that the wage crisis is also caused by the artificial exchange rate of the dollar. The purchasing power of the rupee against the dollar (Real Effective Exchange Rate, REER) is more than 150 rupees. According to Bruegel’s October report, the real effective exchange rate of the rupee against the dollar ranged from a minimum of 154.73 taka to a maximum of 173.17 taka. According to that, against the purchasing power, the salary of 150 dollars was actually supposed to be 23 thousand taka. That is, the demands of the workers are very reasonable. Only if these reasonable wages are given will the survey give a true picture of the productivity of the workers.
According to the International Trade Administration, OTEXA, the unit price of ready-made garments increased by 8.55%, from $3.02 to $3.27, during the period 2023 (Janu-Sep) compared to 2022 (Janu-Sep).
Meanwhile, global fashion brands have agreed to pay higher prices to buy clothes from Bangladesh. The American Apparel and Footwear Association (AAFA), a global consumer organization based in the US, said that 5-6 percent additional production costs will be compensated as a result of raising the minimum wage. More than 1 thousand brands are members of this organization, almost every brand doing big business with Bangladesh is in this association.
That is, the 5-6 percent increase in their production cost as a result of increasing wages will be compensated. It should be noted that wages in the labor intensive garment industry account for a maximum of 10-13 percent of the total cost. From 2018 to November 2023, the increase in the value of the dollar or the exchange rate increased the income of the owners in rupee terms by about 35%.
In reality there is no obstacle to raising wages, there is the inferiority of the owners. When will the tears of the garment industry owners of Bangladesh stop?
Author: Writer on Sustainable Development. Author: Fourth Industrial Revolution and Bangladesh; Bangladesh: 50 Years of Economy; Unstoppable Development Needed Talks; Water, environment and waste of Bangladesh. E-mail: [email protected]