Dhaka, Tuesday, 26 January 2021

RMG workers’ wage hike and ability of the owners

RMG workers’ wage hike and ability of the owners

Ready-made garment industry (RMG) is a private sector industrial entrepreneurship in Bangladesh. The wages of workers in any private sector industry are determined by theWage Board. Clothing industry is divided into two parts. One of these is called Woven and the other is Knit.

Woven includes- shirts, pants, coats, trousers, gowns, skirts, etc. On the other hand, various types of full and half sleeves, sweaters, underwear, etc are included in Knit. About 82 percent of the total export earnings of Bangladesh comes from exported readymade garments.

The garment workers’ wages were first set in 1985. It is the first wage board of garment industry. The minimum wage for workers declared by the wage board was Tk627. The 2nd wage board for the garment workers was formed in 1994. The minimum wage announced by the second wage board was Tk930. The 3rd wage board was formed after 12 years, instead of five years fixed, in 2006. The minimum wage announced by the third wage board was Tk 1,662. The 4th wage board was formed in 2010. The minimum wage announced by the fourth wage board was Tk3,000. The 5th wage board was formed in 2013. The minimum wage announced by the fifth wage board was Tk 5,300.

The garment products produced in Bangladesh are not marketed in the domestic market of the country. 100 percent of the produced in Bangladesh are sent to Europe, America, Australia. Bangladesh is the 2nd largest RMG exporter in the world, next to China. However, in the quantitative terms, the difference of Bangladesh with China is huge. Bangladesh has to compete with India, Nepal, Sri Lanka, Vietnam, Philippines, Thailand, Myanmar, Indonesia, Pakistan, Cambodia to export a garment item. Foreign buyers take into consideration the competitive price when giving orders to the garment makers of any country. It is often seen that the garment factories are forced to accept export orders at the near cost of production.

The government’s role is very important for our country’s garment industry to maintain competitiveness and retain business capabilities. The govt. can make special contribution to the ability of the garment industry owners to maintain their capacities through cash incentives, low-interest bank loans and duty reduction.

It is known that after the announcement of the 6th wage board for the garment industry workers, the wage increase proposed from the employers and workers is Tk6,360 and Tk 12,020 respectively. It is to be noted that, in the announcement of the 5th wage of garment workers in 2013, it was said that the increase in the original wage would be 5 percent per annum. It is estimated that at present, the minimum wage for garment workers is Tk 6,460, which is Tk 100 more than the proposed wage by the owners.

If the owners of the ready-made garment industry lose their capacities and abilities, they will fall in disaster, which will also bring disaster by reducing employment, women empowerment. So, while fixing the wages it should be looked on the owners’ capability so that they can compete with their rival countries.