Minimum Wage 2013 – An Insight

The Minimum Wage 2013 is set to be applicable from December 2013 and the first payment as per this law will take place in early January 2014. The Gazette outlines the basic construction of the Minimum Wage for the Garment Sector (revised for 2013). The new minimum wage comes after two years since the last Minimum Wage set in 2010. It was amidst mass protests and many drama that finally brought this minimum wage into shape.

The minimum wage protests by garment workers continued recently across Bangladesh, with garment factories suffering huge losses due to angry protestors claiming an unfair decision on the minimum wage. Backed by none (not even those who reach stardom globally while claiming to be their leaders/representatives), these protestors included the common garment workers who were waiting patiently for a wage that would at least be close to the expenses that an average worker requires to live. The long running protests saw dozens dead and thousands injured, with factories vandalized and many left without jobs.

The demands of the protestors had been simple:

  1. A minimum wage of 8000BDT, which is according to the calorie intake of workers in the garment sector.
  2. A proportionate increase of the salaries of the other grades of workers i.e. the sewing operators who make up to more than 70% of the work force, and are more than 85% women.
  3. Increase in piece-rate (i.e. they earn according to the number of pieces they make) for the sweater garment factory worker, and introduction of overtime benefits, festival bonuses and leave benefit.

In the current scenario the demand for 8000 BDT has been denied, while the demand for an increase in piece-rate for sweater factories and an introduction of overtime allowances and other benefits is a matter that is being discussed with the Government.

Apart from the disappointment workers have expressed surrounding the increase of the minimum wage, the question that has been repeatedly argued by common workers through protests and rallies have been the proportionate increase in the salaries of the rest of the workers which include operators (more than 70% of the workforce in garment factories) as well as the basic salary increase which workers claim have been very dismal. It must be noted that since overtime payment depends completely on the basic salary, thus workers look into this part of their pay the most. Garment workers spend 5 to 8 hours of overtime daily (often 7 days a week) throughout their employment to meet their bare needs of food and shelter; their pay is far too low in Dhaka’s perspective to keep them alive.

However may be the discontent, or whatever massive protests may have been seen across the country, the structure formally announced on 21 November 2013 is now in force in Bangladesh. An increase which saw a total rejection from the factory owners, who eventually again settled down with 5300BDT, but with 200BDT less than the proposed basic salary of 3200BDT as per the draft submitted. They finally ended up at 3000BDT as the minimum basic salary for the Grade 7 worker.

The minimum wage 2013 according to the gazette (Registered No. D A-1; S.R.O. No. 369-Law/2013.- Bangladesh Labor Law 2006, section 140, subsection 1) of the Category “A” Workers[1] can be seen below, with four extra columns added to display the percentage increase in Minimum Wage 2013 compared to Minimum Wage 2010; and the percentage increase in the Basic Salaries of Grades accordingly between Minimum Wage 2013 and Minimum Wage 2010:

minimum wage 2013 analysis FINALIn the table above (click to enlarge), Grade 7 is held as the reference point as this is the lowest grade where the minimum wage in Garment factories are applicable. The worker below Grade 7 is a worker on probation (period of learning), and is not yet a formal member of the main work force.

An attraction for the Minimum wage 2013 is the 5% annual increase of the basic salary. However, it must also be noted that the inflation rate in Bangladesh is 7.13 (Bangladesh Bureau of Statistics, 2012). Moreover, according to experienced garment workers, the factories usually had to increase the basic salary of a garment worker by at least twice the amount every new year of their work life in that factory anyways before this law, but now this law will confine the increase to its limits – thus, for some it is another reason of discontent.

It can be seen from the minimum wage 2013 table is that the basic salary increase from minimum wage 2010 is just 33.33% in the minimum wage 2013. The Grade 6 basic salary increases by 9% from Grade 7 basic salary in the minimum wage 2013, and this trend of dismal basic salary increase can be witnessed throughout the table.

It can also be seen that the increase of gross salary in Minimum Wage 2013 from Minimum Wage 2010 shows a sharp decreasing rate, and the same trend can be seen in increase in basic salary in 2013 compared to 2010 (note: there was no basic salary for workers in probation during 2010).

Another table below shows how the increase in minimum wage 2013 looks is adjusted with inflation for the FY 2011, 2012 and 2013 (inflation rate collected from the Bangladesh Bureau of Statistics – BBS),

BGMEA Minimum Wage 2013 adjusted with the sum of inflation for FY 2011, 2012 and 2013

BGMEA Minimum Wage 2013 adjusted with the sum of inflation for FY 2011, 2012 and 2013

It can be seen from the above table that once adjusted with relevant inflation levels, the increase in gross wages are considerably weakened, while increase in the basic wage comes quite dismal – meaning that any real increase can be felt only by 6% of less with higher grades.

An important law is that those Garment Factories already paying more than the minimum wage declared in this law cannot decrease that wage to adjust with the new wage structure.

Below is a chart displaying the position of Bangladesh compared to the rest of the world on minimum wage within the garment industry (Bangladeshi Workers are still the lowest paid workers in the globe):

new minimum wage chart

A Description of the positions as per their grades of Category “A” Workers, according to the Minimum Wage 2013 [1]

Grade 1:
i. Pattern Master
ii. Chief Quality Controller
iii. Chief Cutting Master; Cutting Chief
iv. Chief Mechanic

Grade 2:
i. Mechanic; Electrician
ii. Cutting Master

Grade 3:
i. Sample Machinist
ii. Mechanic
iii. Senior Sewing Machine Operator
iv. Senior Winding Machine Operator
v. Senior Knitting Machine Operator
vi. Senior Linking Machine Operator
vii. Senior Cutter
viii. Senior Quality Inspector
ix. Senior Marker; Senior Drying Man; Senior Drying Woman
x. Senior Line Leader
xi. Senior Over-lock Machine Operator
xii. Senior Button Machine Operator
xiii. Senior Kanchai[3] Machine Operator

Grade 4:
i. Sewing Machine Operator
ii. Winding Machine Operator
iii. Knitting Machine Operator
iv. Linking Machine Operator
v. Marker; Drying Man; Drying Woman
vi. Cutter
vii. Mending Operator
viii. Pressing Man; Pressing Woman; Finishing Ironman; Finishing Ironwoman
ix. Folder (finishing section)
x. Packer
xi. Quality Inspector
xii. Over-lock Machine Operator
xiii. Button Machine Operator
xiv. Kanchai Machine Operator
xv. Polyman; Polywoman
xvi. Packingman; Packingwoman
xvii. Line Leader

Grade 5:
i. Junior Sewing Operator
ii. Junior Winding Machine Operator
iii. Junior Knitting Machine Operator
iv. Junior Linking Machine Operator
v. Junior Marker; Junior Junior Drying Man; Junior Drying Woman
vi. Junior Cutter
vii. Junior Mending Operator
viii. Junior Pressing Man; Junior Pressing Woman; Junior Finishing Ironman; Junior Finishing Ironwoman
ix. Folder (finishing section)
x. Junior Electrician
xi. Junior Packer
xii. Junior Over-lock Machine Operator
xiii. Junior Button Machine Operator
xiv. Junior Kanchai Machine Operator

Grade 6:
i. General Sewing Machine Operator
ii. General Winding Machine Operator
iii. General Knitting Machine Operator
iv. General Linking Machine Operator
v. General Mending Operator
vi. General Fusing Machine Operator
vii. General Color Turning Machine Operator
viii. General Over-lock Machine Operator
ix. General Button Machine Operator
x. General Kanchai Machine Operator

Grade 7:
i. Sewing Helper
ii. Winding Helper
iii. Knitting Helper
iv. Linking Helper
v. Mending Helper
vi. Cutting Helper
vii. Marker Helper; Drying Man Helper; Drying Woman Helper
viii. Pocket Creasing Machine Operator; Creasing Man; Creasing Woman
ix. Line Ironman; Line Iron-woman
x. Dry Washing Helper
xi. Over-lock Machine Helper
xii. Button Machine Helper
xiii. Kanchai Machine Helper
xiv. Finishing Helper

Probationary Period Workers:
a) Probationary period will be of 3 (three) months.
b) During the probationary period, the worker on probation would receive a Gross Salary of 4180 BDT (Four Thousand One Hundred Eighty Taka only), which shall include a basic salary of 2200 BDT; House rent shall be 40% of basic salary which would amount to 880 BDT; Medical Allowance of 250 BDT; Travel Allowance of 200 BDT; Food Allowance of 650 BDT.
c) The probationary period of a worker might be extended for a further 3 (three) months if her/his skills cannot be determined in the previous 3 (three) months of her/his probationary period. After a satisfactory completion of her/his probationary period the worker can be appointed to a “Grade” accordingly.

————————–

References

[1] Minimum Wage for Garment Workers Gazette, 2013. The People’s Republic of Bangladesh.

[2] Category “A” Workers are termed as “laborers (Sromik in Bangla)” and are directly involved in the production process of the factories, while Category “B” workers are termed as employees (Kormochari in Bangla) and are involved in the management and other activities of the factories. Category “B” workers wage list is not elaborated here as it is not the subject of the article, neither has it been debated or been the cause of any discontent.

[3] Kanchai is the Machine which creates the creases on the back of elastic waist belts to shrink when let free and expand when pulled with force.

Author: Kasheful Hoda, Researcher and Activist, RISE Society.

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Posted in Garment Worker Issues
6 comments on “Minimum Wage 2013 – An Insight
  1. […] targeted for over a month now for her taking part in a strike to receive wages according to the minimum wage 2013 as declared and applicable from December 2013 and payable starting from January 2014. “I am […]

  2. […] outskirts of Dhaka, went on strike this morning for their wages from the month of January 2014. As minimum wage 2013 still remain unimplemented in almost half of all the garment factories, unrest for wages are […]

  3. […] of Dhaka, went on protest this morning for their wages from the month of January 2014. As minimum wage 2013still remain unimplemented in almost half of all the garment factories, unrest for wages are […]

  4. […] will fulfill any deficit in wages of workers for less work, as per their grade according to the minimum wage 2013. 5. During lean seasons/off peak seasons, if the worker attends all his/her working days full time, […]

  5. […] amendment of the Bangladesh Labour Act 2006 (amendment 2013), and a fresh new (and controversial) minimum wage 2013 as well as an EPZ minimum wage 2013. Heavily criticized and contested, these new minimum wages came […]

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