Minimum Wage Gets Fixed at 5300BDT (50Euro/68USD); factory owners refuse to recognize

On Monday 4 November 2013, at the 9th meeting of the minimum wage board fixed the minimum wage at 5300BDT (including food allowance), which however was opposed by the BGMEA (Bangladesh Garment Manufacturer’s and Exporter’s Association) representatives who pressed forward with their recommendation of 4250BDT (including food allowance) as the new minimum wage. The representatives of the factory owners staged a walkout without signing the draft agreement. However, according to rule seven of the Wage Board Ordinance 1961, the board arranged a voting and passed the agreement by a 4 to six majority, ignoring the factory owner’s representatives. Now, 15 days must pass where opinions and objections will be taken and scrutinized by the board before the final recommendation is sent to the Labor and Employment Ministry to convert it into law.

This surprising move of shifting the demand for minimum wage from the popular 8000BDT pushed forward through the struggle and protests of millions of Garment Workers across Bangladesh (out of whom approximately 1% is unionized and represented by “worker leaders”), to the current 5300BDT which came from those representing Garment Workers in the board came yesterday after discussion with the neutral members (representing Government) of the board. If this new minimum wage of 5300BDT is converted into law, it would still be the lowest in the world and far below the living wage for garment workers in Bangladesh.

The new minimum wage is elaborated as per the Table below:

Garment RMG Minimum Wage 2013

The new wage scale includes some new headings which previously did not exist, and they are: “Transportation Allowance” and “Food Allowance”. Previously, in the last minimum wage scale, the house rent was 800BDT and the Medical Allowance was 200BDT, while the Basic Wage was 2000BDT. With the new minimum wage, the lowest wage for a Grade 7 worker is expected to increase by 76% only.

Currently, the inflation rate in Bangladesh is at 7.13 (according to the Bangladesh Bureau of Statistics 2013 and the Trading Economics 2013 publication).

A more detailed report on the minimum wage and its effect will be posted soon by RISE Society.

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Posted in Garment Worker Issues

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