Bangladesh recently witnessed violent protests by textile workers who are being forced to work for wages below $1/day even as inflation rages at more than 10% in that country.Bangladesh has recently seen increased outsourcing of garments with Chinese wages increasing.However the conditions for the textile workers has not improved as the salary levels for the workers remain abmysally low.Bangladesh relies on its garment industry for the majority of its exports as the country remains one of the poorest in the world with most of its population living in desperate poverty.Rapid strides being made by big neighbour India has failed to touch the rest of the South Asian countries like Nepal,Pakistan,Bangladesh,Mynamar and others which remain mired in political strife with living standards comparable to sub-Saharan Africa
Government Body doubles Minimum Wage but Still below $1.5/day
The violent protests have made a government body double the wages of the workers to $43/month but it has not satisfied the worker’s organization which is demanding ~$65/month.The $1.5/day is considered below poverty line even in Bangladesh and a textile workers generally support a family which means the per capita income for a textile worker family would be something like 50 cents/day.Even as such low wage,smaller factories are expected to close due to their wafer thin margins.What Bangladesh needs is investment in infrastructure like roads,ports and electricity in order to make it competitive with the like of China and India.Rock bottom wages can only take one so far.
A government oversight board in Bangladesh nearly doubled minimum wages in the important garment industry on Wednesday, but the new benchmark is still well short of what workers’ groups had been demanding. The minimum wage for garment workers will be raised to 3,000 taka a month, or about $43, from 1,662.50 taka; workers’ groups and unions wanted 5,000 taka.At least one garment workers’ group denounced the decision, saying the new wage was not enough given that inflation has been as high as 10 percent in recent years. The government last increased minimum wages for the industry in 2006.
Anisul Huq, a factory owner and previous leader of the association, said the wage increase would be hard on the industry, especially smaller factories. The extent of the impact would depend on how much more companies like Wal-Mart and H.&M. are willing to pay to offset the rise in costs, which Mr. Huq pegged at 15 percent to 20 percent of total cost of production.“I maintain the view that it will put strong pressure” on the industry, he said. “I won’t be surprised if factories close, especially smaller factories.”