News - 2023

Minimum wage talks in Bangladesh on the verge of collapse? Employers propose outrageously low wage of 89 euros, while many fashion brands still remain silent

Fears are growing that ongoing wage negotiations for the Bangladesh garment industry could result in a new poverty wage of only about 89 euros per month (10,400 taka), based on an outrageous proposal put forward by employers* at the last meeting of the wage committee. Unions and labor rights organizations reject this brazen attempt to keep workers trapped in poverty. The low wage proposal is the result of the unwillingness of major fashion brands to actively support workers* in their struggle for decent wages.

Brands such as Primark, H&M, C&A, and Esprit, which are committed to living wages, must pay higher prices for their products and support Bangladeshi unions' demand for a wage increase to at least 23,000 taka (approximately 196 euros) per month.

Various credible Bangladeshi media report that the employers* side presented an offer of only about 89 euros (10,400 taka) at the last meeting of the Minimum Wage Committee on October 22, 2023. This fuels fears that the new minimum wage may fall far short of what cost-of-living studies show is the bare minimum for a decent life in Bangladesh.

"If the new minimum wage is only 10,400 taka, it means that the majority of workers* will not be able to survive on the income they earn for a 48-hour week in this industry. They will continue to rely on other means to make ends meet: Working lots of overtime, skipping meals, or going without other basic needs for themselves or their dependents," says Kalpona Akter, president of the Bangladesh Garment and Industrial Workers Federation and director of the Bangladesh Center for Workers Solidarity. "International buyers should take responsibility now before the situation gets worse."

The unions have staged several demonstrations in Bangladesh and approached more than 60 major fashion brands that buy from Bangladesh. The brands were asked to support the demand for 23,000 taka, commit to continue sourcing from Bangladesh after the minimum wage increase, and include the higher labor costs in their purchase prices.

"We call on brands to support our demands because brands are responsible for purchasing practices that directly impact workers* wages. We know that decisions on wage increases are closely linked to the prices buyers* are willing to pay," says Amirul Haque Amin, president of the National Garment Workers Federation.

This was underscored by the Bangladesh Garment Manufacturers and Employers Association's (BGMEA) recent call for brand companies to commit to better wage practices through the Action Collaboration Transformation (ACT) program, asking them to address the higher cost of living and inflation faced by workers* by paying a "fair price" and to be more "sensitive and rational in their pricing and sourcing practices."

Some brands have heeded the unions' call and released individual statements in support of their wage demands.However, several major buyers are not doing so, including brands that commit to living wages in their codes of conduct.Primark, H&M, C&A and Esprit are among the brands that have remained silent."The failure of the brands to commit to raising their purchase prices in line with a wage increase to 23,000 taka could lead to the adoption of the employers* outrageously low wage proposal of just 89 euros per month.The buyers' silence encourages employers to continue to violate the human right to a living wage that ensures a life of dignity for workers and their families.

"The failure of brands to commit to raising their purchase prices in line with a wage increase to 23,000 taka could lead to the acceptance of the employers* outrageously low wage proposal of only 89 euros per month. The buyers' silence encourages employers to continue to violate the human right to a living wage that ensures a life of dignity for workers and their families.

Living wage commitments from brands that refuse to listen to unions' desperate demand for support clearly cannot be taken seriously," said Anne Bienias, Living Wage Coordinator at Clean Clothes Campaign.

Background

Six months ago, the Bangladesh government formed a wage committee to recommend a new minimum wage for workers in the country's multibillion-dollar garment export industry, and the deadline is approaching. The pressure to form a wage committee came from the country's garment unions, which have been calling for an increase in the minimum wage as their workers struggle to make ends meet due to inflation. Wages were last reviewed in 2018.

The unions are demanding a wage increase from 8,000 taka (about 68 euros) to 23,000 taka (about 196 euros) per month based on a thorough cost-of-living study conducted by the Bangladesh Institute for Labor Studies (BILS). The report explains why a wage below 23,000 taka will not be sufficient to support the livelihood of workers and their dependents.

Further information