Garment workers in Bangladesh fight for living wages

The minimum wage for garment workers in Bangladesh was insufficient to provide for a decent living already when it was set in 2018. Since then, workers have faced additional pressure from the COVID-19 pandemic and high inflation. Labour unions are now demanding a significant increase, but the outcome of the current minimum wage negotiations remains uncertain.  

This Q&A with Sanjida Shamsher at Swedwatch, who recently visited factories in Bangladesh, provides insights into the challenges faced by garment workers and the need for a substantial wage raise as well as more sustainable purchasing practices from international buyers. 

Can you describe the situation of garment workers in Bangladesh, particularly with regard to wages, based on your recent visit? 

In May 2023, we visited Bangladesh and spoke to over 30 workers who produce ready-made garments and home textiles for the European market. They described their situation as very difficult, particularly due to low wages and high cost of living. Earnings are between 9,300 and 11,500 Bangladeshi taka (roughly 89-98 Euros) per month, which they said is far from a living wage for themselves and their families.  

The workers also highlighted that the so-called ‘basic salary’ only makes up about 50% of their earnings. This means that their yearly increment, overtime payment, bonus, and all other benefits are based on this basic amount. It is therefore important that the wage board declares not only a raised wage but also a raise of the basic salary proportion as soon as possible – workers need it now.

The wage negotiation process
According to the national Labour law, the Bangladeshi government forms a wage board for each industry, including for ready-made garment (RMG) to revise the minimum wage every five years. Negotiations between the board, employers, and workers are ongoing and a decision supposed to be reached by December 2023. Labour unions representing garment workers demand an increase from the current monthly minimum wage of 8,000 taka, to at least 23,000 taka (roughly 198 Euros).  

What other wage related issues did workers bring up?

According to the workers we spoke to, the production target has gone up, but they are not granted overtime pay the way they used to and have to produce nearly twice as much compared to before the pandemic, within their regular working hours.  

With no extra overtime income and increased expenses, the situation has become very tough. Many reported having to take loans from other people in the community to put food on the table. Physical and mental health issues were also reported due to increased pressure at work and the stress of juggling income and expenses.  

Would a minimum wage of 23,000 taka within regular working hours, as trade unions demand, be a sufficient wage for workers to live on?   

Based on calculations done by various organisations, comparing the living cost against the current high inflation rate of 9.5%, IndustriAll Bangladesh affiliated members have come up with the demand for 23,000 taka and a 65% basic salary per month for entry-level workers.  

Still, our findings point to the fact that it is important to have a systematic approach to living wages. For example, workers told us that whenever there is an increase in salaries, landowners increase the rent. So, when discussing if wages are sufficient to live on going forward, several factors should be taken into account including issues such as affordable housing.  

You also met with factory managers. How do they perceive the situation and demands for a substantial pay raise? 

In line with claims by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the managers we met expressed concerns that whereas both demand for social and environmental compliance and the cost per production unit have gone up, the price buyers pay remains the same or has even dropped. And given that the competition among suppliers is high, they say they can’t afford to demand higher prices without risking losing orders.  

This being the case, wage levels cannot be discussed without also mentioning the need for more sustainable purchasing practices. Pricing below production cost, but also short-term planning, late payments etc, all have negative effects on the financial stability of suppliers and their ability to pay fair wages.   

The upcoming EU Corporate Sustainability Due Diligence Directive (CSDDD) offers an opportunity for regulators to adopt strict obligations for brands, including those sourcing from Bangladesh, to integrate fair purchasing practices into their business models. Swedwatch will closely monitor further developments in this regard. 

What is, to your knowledge, the common standpoint of European brands and business organisations in current negotiations?  

Business coalitions like Ethical Trading Initative (ETI), amfori and ACT, where many European brands including Lindex, Kappahl and H&M, are members, have expressed their support for a living wage and also to union demands to strengthen collective bargaining.

One example being a letter, from ACT members to the ready-made garment Wage Board, calling for a minimum wage that will cover the income necessary for a worker and their families to meet basic needs. The letter refers to new due diligence laws in the EU and US which will require increased focus on respect for fundamental rights throughout supply chains, including a just remuneration. 

A similar letter supporting an increase in line with a living wage, also recognising the importance of responsible purchasing practices by its member brands, was sent jointly by five associations including ETI and amfori. 

However, even if several brands have expressed support to living wages through their membership in associations, most of them – H&M included – have remained hesitant to publicly support trade unions demands to increase the minimum wage to 23,000 taka.

The risk of relocation of jobs to other countries has commonly been used as an argument against higher wages by Bangladeshi politicians. What is your view on that?  

It doesn’t come as a surprise that these arguments regularly arise. The fear of relocation of production is a direct result of the fact that global brands have for decades been complicit in facilitating a race to the bottom in global value chains, which has pushed rightsholders and other stakeholders in a vulnerable and dependent position. Brands have a responsibility to reverse this trend, not just by expressing their support for an increased minimum wage but also for mandatory rules on living wages aimed at levelling the playing field.

According to the ITUC Global Rights Index, Bangladesh is among the top ten worst countries to work in. What other problems than low wage, did workers highlight in your interviews?  

Difficulties raising issues about the working environment or officially establishing a union without the risk of getting harassed or fired, were issues highlighted by many. But there were differences between the factories we visited. While some have effective unions, others have a no-union attitude. Even if managers interviewed expressed advantages of having an effective union in case of conflict management at the factory, some workers were even afraid to mention the word ‘trade union’ to us because of the fear of getting fired. The latest incident, where a president of the Bangladesh Garments and Industrial Workers Federation was killed, is a reminder of the dangerous situation many union representatives still face.  

Another concern is occupational health. Because of the demanding work, by the time workers get older and possibly less productive, they risk getting fired. Strengthening social security systems is therefore important, as well as of course improving working conditions at the factories.  

Your first Swedwatch research trip to Bangladesh was in 2014, nine years ago. What stands out as the biggest change?  

Workers are more aware of their rights today and the horrible Rana Plaza incident in 2013 was a tipping point in terms of safety. After the incident the International Accord, a legally binding agreement between brands and trade unions working towards safe workplaces, was established. Apart from regular fire drills, training on workplace safety and similar improvements, the Accord has led to more transparency as members have to publish their suppliers lists.  

But while some tangible things have improved, many of the broader challenges we witnessed almost a decade ago remain today.

Sometimes we are producing double the amount compared to before Covid. Instead of giving us overtime to finish those pieces, the employers are pressuring us to complete the entire work within our regular hours. /Worker, garment factory

When we demand for higher salary, our employers always say that they understand that the living cost has gone up, but the buyers are not paying a higher rate for the products.
/Worker, garment factory

Workers’ demands* 
✔️Raise our monthly salary including the basic amount 
✔️Give us ration cards to buy food at subsidized price 
✔️Allow us to establish trade unions without any resistance 

Managers’ demands* 
✔️Buyers should be transparent about their costing and profit margins 
✔️Better dialogue between buyers and suppliers while calculating the unit price vs demand for social and environmental compliances 
✔️Buyers should contribute a percentage of the turnover from their Bangladeshi business to the social welfare fund for the workers 
*Expressed in interviews conducted by Swedwatch in May 2023, Dhaka 

I can see a huge difference in the work environment between before and after the Rana Plaza incident, and even before that there was a fire incident at Tazreen fashion. Nowadays the safety committee can even suggest halting the operation if the committee see any risks.
/Trade union leader and sewing operator

Previous reports by Swedwatch

Press contact

Sanjida Shamsher Elora
+46 (0)73 223 02 90
sanjida@swedwatch.org