Bangladesh garment workers’ real wages have increased but there is scope for a further hike as competitiveness of the 27 billion US dollar export-earning sector has not eroded due to a wage spike in 2013, according to a study by Bangladesh Institute of Development Studies (BIDS).
The study calls for participation of global buyers and retailers to improve working conditions so that workers can make a decent living, saying that buyers and retailers take 75-88 per cent margins over the retail prices of an apparel item.
“They cannot avoid their responsibility of sharing part of the cost of social upgrading,” Nazneen Ahmed, senior research fellow of BIDS, who presented the study at a programme — BIDS Research Almanac 2014-15 in Dhaka. Dev Nathan of New Delhi-based Institute for Human Development co-authored the report.
According to the study, the minimum real wages of garment workers rose 37 per cent in 2013, helping to improve their economic and working conditions.
Citing the fears of entrepreneurs that wages would affect competitiveness, she said the reality is different: an increase in wages and an improvement in working conditions have not resulted in the loss of international competitiveness of Bangladeshi garment manufacturers.
The unit value of garment exports rose 16.86 per cent over the two-decade period of 1990 to 2009, benefiting entrepreneurs, Nazneen said. The rate was higher than in India, China and Vietnam.
But even after the increases in wages, Bangladesh’s minimum wage is less than that in competing countries. Bangladesh’s minimum wage of 68 US dollar a month is lower than the 80 US dollar in Cambodia, 71 US dollar in India, 79 US dollar in Pakistan and 78 US dollar in Vietnam.
