Bangladesh
to Raise Minimum Wage for Garment Workers by Year-End Following Nationwide
Protests
Hundreds of garment factories were shut
down this week as workers in the country, the world’s second-largest exporter
of clothing, demonstrated for higher pay.
1. Wage
Increase Announced
·
Bangladesh's newly constituted wage board announced
on Wednesday that it would raise the minimum wage for garment workers by the
end of 2026.
·
The decision followed widespread protests that shut
down hundreds of garment factories, triggered violence and threatened
production for major international fashion brands.
·
The six-member wage oversight board will consult
representatives of workers and the garment industry before finalising the
increase.
2.
Workers' Wage Demands
·
Current minimum monthly wage: approximately US$100.
·
Workers are demanding an increase to more than US$242
per month.
·
This represents a proposed increase of
approximately 140%.
·
Factory owners have described the workers' demand
as economically unfeasible.
·
Workers argue that existing wages are insufficient
to meet rising living costs, including food, electricity, gas and housing.
3.
Timeline for Implementation
·
The wage board is expected to announce its decision
next month, possibly as early as the following week.
·
The revised minimum wage is expected to become effective
from January 2027.
·
The exact amount of the increase has not yet been
announced.
4. Scale
and Importance of Bangladesh's Garment Industry
·
Bangladesh is the world's second-largest
clothing exporter after China.
·
The garment industry:
o
Accounts for approximately 80% of Bangladesh's
total export earnings.
o
Employs more than 4 million workers.
o
Employs women in more than half of its workforce.
·
Major international brands sourcing garments from
Bangladesh include:
o
H&M
o
Zara
o
Uniqlo
5.
Nationwide Protests and Violence
·
Protests took place in Dhaka, Ashulia,
Gazipur and Narayanganj.
·
Workers blocked highways and demanded higher wages.
·
Police used batons and water cannons to disperse
protesters.
·
Border Guard personnel were deployed to control the
unrest.
·
Some protesters reportedly set fire to police
vehicles.
·
According to the Industrial Police:
o
At least one protester died.
o
Dozens of people were injured.
·
Hundreds of garment factories were temporarily shut
down.
6.
Restoration of Factory Operations
·
By Thursday, normalcy was gradually returning.
·
Hundreds of temporarily closed garment factories
had resumed operations.
·
However, some workers continued protesting,
demanding a specific wage increase rather than accepting the government's
assurance of a future revision.
7.
Implications for Global Fashion Supply Chains
·
Bangladesh's garment sector is a major supplier to
leading international fashion brands.
·
Factory closures and labour unrest threaten
production schedules and export deliveries.
·
The wage revision will have implications for
garment manufacturers, sourcing companies and international fashion retailers.
Significance: The
proposed wage increase highlights the pressure on Bangladesh's export-oriented
garment industry to balance rising labour costs and workers' living standards
with international competitiveness. Any prolonged labour unrest could disrupt
global apparel supply chains, given Bangladesh's position as the world's
second-largest clothing exporter.
Bangladesh’s
newly formed wage board said on Wednesday that it would raise the minimum wage
for garment workers by the end of the year. The decision followed protests this
week that shut down hundreds of factories, led to sporadic violence and
threatened to disrupt production for some of the world’s top fashion brands.
The
board, which was created this week in response to protests by garment workers
demanding higher pay, did not say how large the increase would be. The
announcement brought an end to several days of unrest in several cities in
Bangladesh, whose economy is heavily dependent on its status as the world’s
department store.
As
in much of the rest of the world, workers in Bangladesh, the second-largest
exporter of clothing behind China, are struggling as the rising cost of everyday
goods and services eats up more of their income.
The
minimum salary in Bangladesh’s garment industry is equivalent to roughly $100 a
month. The protesting workers have asked for a raise to more than $242 a month,
a 140 percent increase, which factory owners have said is unfeasible.
“The
current minimum salary is inadequate. It cannot cover one person’s monthly
living cost,” Mohammad Helal, a garment worker who
protested in the city of Ashulia, north of the
capital, Dhaka, said in an interview. Sarcastically, Mr. Helal,
26, offered the government an alternative to a wage increase: It could start
paying for electricity, gas and rent costs. Then, he said, “We will not demand
the salary increase.”
Mr.
Helal said he had been working at a garment factory in
Ashulia for nine years and earned under $140 per
month. He said he needed the money not only for himself but also to send to his
parents, who live 165 miles away in the northwestern
region of Rajshahi.
The
garment industry in Bangladesh supplies brands like H & M, Zara and Uniqlo
and accounts for 80 percent of the country’s total export earnings. It employs
over four million people, more than half of them women.
During
a protest in Dhaka on Monday, agitating workers blocked highways. The police
responded to those protesters forcefully, using batons and water cannons.
According to Bangladesh’s home affairs minister, Salahuddin Ahmed, some
protesters set fire to police vehicles. The authorities also deployed the
Border Guard to quell the protests.
In
sporadic clashes, at least one protester died and dozens were wounded,
according to the Industrial Police. It was not clear how many people were
protesting, but demonstrations were staged in cities including Gazipur and
Narayanganj, in addition to Dhaka.
On
Thursday, order was starting to return as hundreds of garment factories that
had been shut down temporarily were back up and running.
Some
workers appeared unwilling to accept the government’s offer without the promise
of a specific amount. In Ashulia, a few hundred
workers punched their timecards and then returned to the streets, where the
police quickly dispersed them, according to Mr. Helal
and the officer in charge of the area’s police station, Tariqul Islam.
The
raise is to be set by the new six-person wage oversight board, which will take
input from representatives of the workers and the garment industry. The board
will announce its decision next month, possibly even next week, with the
increase going into effect in January, according to the board.