Thousands of workers in Bangladesh protested violently demanding an increase in wages. Workers stitching clothesfor many Western brands showed their protest, making hundreds of garmentfactories to shut down temporarily hindering in the delivery of garments to bigretailers such as H&M, Wal-Mart, and Tesco.
Minimum wage in Bangladesh is the one of the lowest; globally ranging from Tk 1,662 for a month. The entrylevel salary for apparel workers in Bangladesh was generally set for Tk 1,200,and was later raised by the Government to Tk 2,500, which was to take effectfrom November, 2010. But, this did not satisfy the workers who werenegotiating for Tk 5,000 as a minimum salary. Furthermore, they also demandholiday time, official union recognition, and sick pay.
There is anincreasing trend in the labor, and material costs in China. Apparel workers aregetting attracted towards better salaried jobs such as making electronic spareparts, and automakers. Due to this, Chinese apparel makers are currently facinga shortage of workers. Bangladesh has good potential to leap at the opportunity,and capitalize on the rising costs of China, but the prevailing labor unrestwould impede the foreign companies from considering this option. The currentsituation of labor unrest even pose a threat to the benefits brought by theeconomic recovery, which was providing a 15% increase in the apparel exportsduring April, and May.
During 2009, apparel exports from Bangladesh accounted to 80% of the total exports, proving to be a key sector.Apparel exports have also augmented the economic future of the country. Thespell of workers strike has incurred a loss of Tk 7.75 billion for the apparelmanufacturers. The losses include; loss of production time, higher costs forsending the products through air freight instead of sea cargo, and the damagescaused due to sabotage of the factory premises, and machineries. Apart fromthis, the readymade garment industries will have a hard time in keeping up withtheir international orders.
Increasing the wages to Tk 5000will be too heavy for the apparel industry to bear, as it has been crushed bythe global turmoil recently, and is only recovering gradually. Domesticmanufacturers are not ready to negotiate with unions, or workers, blaming oncost cutting, and Western buyers such as H&M, Carrefour, Tesco, Wal-Mart,and Levi Strauss. On the contrary, unions argue that manufacturers make theworkers to work for 10 hours in a day, and six days in a week, therebyaccumulating enormous profits. Workers and the union strongly assert that,while thousands of businessmen have become millionaires due to the endowment of Bangladesh apparel industry, lakhs of apparel workers have been condemned toperpetual poverty.
Labor unrest is the most crucialissue facing the apparel sector of Bangladesh. The Government, apparelmanufacturers, and the workers should reach a compromise regarding fair wages.
References:
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