Factory owners who initially opposed demands for higher minimum wage agree to increase after PM’s intervention
Wages for Bangladeshi garment factory workers are set to rise after owners said they had agreed to a proposed 77% increase in the minimum wage.
The powerful businessmen who run many of the factories in the country, the world’s second biggest exporter of clothes after China, had initially opposed demands for higher wages.
The official wage board in the chaotic, overcrowded and politically unstable south Asian state had proposed 5,300 takas (£43) a month as the minimum wage after a string of fatal factory accidents this year highlighted poor pay and conditions.
In April 1,130 people died when a factory complex where garments for European retailers such as Benetton, Matalan and Primark were made collapsed.
Factory owners’ resistance to the wage increase had led to street violence, protests and a four-day shutdown of many factories. However,Bangladesh’s prime minister, Sheikh Hasina, convinced business representatives to implement the rise at a meeting at her private residence on Wednesday night.
“We have agreed to the new wages after the prime minister assured us she would look into our problems,” said Mohammad Atiqul Islam, president of the Bangladesh Garment Manufacturers’ and Exporters’ Association.
Hasina is facing an election within months in which her Awami League is likely to lose power. A pay rise to millions of workers will help bolster her popular support. The rate paid in Bangladeshi factories remains the lowest minimum wage in the world, however. Dozens of factory owners are members of parliament, many for Hasina’s party.
Scattered protests by garment factory employees continued on Thursday. Police on the outskirts of Dhaka, the capital, fired teargas and rubber bullets to disperse stone-throwing workers after they vandalised vehicles, said local police officials. Workers’ representatives had originally demanded 8,114 takas (£64).
Bangladesh earns more than $200bn (£125bn) a year from exports, mainly to the United States and Europe. The industry employs about 4 million workers, mostly women who come from rural backgrounds and for whom even poorly paid jobs are a route out of worse poverty in remote villages.
Three separate initiatives involving global brands, international unions, Bangladeshi authorities and multilateral bodies such as the International Labour Organisation have been launched in a bid to improve conditions.
This year Muhammad Yunus, who founded the pioneering Grameen bank in Bangladesh 30 years ago and won a joint Nobel prize in 2006, said there was no sense in foreign firms “leaving a country which has benefited a great deal from their business”.
However, he urged foreign clothes companies operating in Bangladesh to jointly fix a minimum wage for workers in the industry.