Top global retailers plea for RMG workers' wage hike

Top global retailers, including the world's biggest Wal-Mart and Europe's largest H&M, according to a report published in the FE, have written a letter to the Bangladesh Prime Minister requesting her to take 'swift' measures to increase the minimum wage of nearly two million readymade garment (RMG) workers. The retailers have also urged the highest authority of the government to treat the issue as a 'high priority' because of, what they have stated, the wage of the RMG workers has now dipped well below the poverty line. They have found a link between the recurrent unrest in the RMG factories and the poor rate of wage that the workers are paid and urged the government to create a sort of permanent arrangement to make an annual review of the RMG workers' wage.

There is no denying that labour wage in Bangladesh, particularly for those working in the export-oriented RMG sector is very low compared to that in other global competitors. A survey conducted on the global garment industries by a US-based consultancy firm recently has found that Bangladesh RMG workers get only one-third of the average wage their counterparts receive in other South Asian major apparel exporting countries. In 2006, for the first time, a minimum monthly wage of Tk. 1662.50 was fixed for an entry-level worker in the RMG sector. Last year, a nominal hike in the wage was put into effect. Still the daily income of a entry-level worker is less than a dollar a day, meaning that he or she, despite being employed in an export-oriented industry, does not have enough money to sustain a living. Their income situation would turn even worse if the recent UN baseline for poverty estimate is taken into consideration. Under the new UN estimate, any individual having a daily income below $1.5 is considered below the poverty line.

The RMG workers are seriously aggrieved by their low wage, no doubt. But most acts of vandalism in the RMG sector in recent years have happened mainly because of irregular payment of monthly wage, overtime bills and festival bonus by a section of RMG factory owners and poor management and workers relations. There is, however, a conspiracy theory. But conspirators, if there is any, actually exploit the growing resentment among the RMG workers over low wage and maltreatment by their supervisors at the factory level. Studies have found that the average productivity of the RMG workers in Bangladesh is lower than that of any other competing countries in South Asia, China, the Philippines and Vietnam. There could be a link between the low productivity and the low wage of the RMG workers in Bangladesh. In such a situation, RMG owners have to spend more money on workers' wage to encourage the latter to raise their productivity level.

The retailers who have written to the PM calling for raking measure to effect a hike in the wage of RMG workers in Bangladesh are major players in the international apparel market. The government cannot ignore their concern because together they buy more than 40 per cent of the country's total annual RMG exports. These companies have made it clear that they consider the workers' unrest as a risk, which could damage Bangladesh's reputation as a reliable sourcing market. Everybody would appreciate the points raised by the group of major buyers. But one cannot, however, ignore the problems being faced by the RMG factory owners who have suffered losses, in terms of value of their products and volume of exports, because of the ongoing global recession. The retailers are, reportedly, paying less than before for goods they are buying from Bangladesh. So, they will also have to make their contributions to the efforts for facilitating hikes in the wage of RMG workers in Bangladesh by paying a little more for the products they are procuring from here.