The institute said the long-time minimum-wage policy, which reviews wages every five years, compounded with high inflation, favours employers over workers.
Around four million workers are employed in this sector in the country, with a minimum wage of Tk12,500 ($105), set last year.
A Cornell University policy brief has called for an annual wage review and wage-setting process for Bangladesh’s RMG workers as is done in Cambodia.
Wages are reviewed every five years there, but that favours employers over workers due to high inflation, it said.
“At current inflation rates, workers paid the minimum wage or close to it are ‘under water’, losing real income year on year,” it noted.
“At current inflation rates, workers [in Bangladesh] paid the minimum wage or close to it are ‘under water’, losing real income year on year,” a policy brief by GLI said.
The policy brief indicated that after implementing the annual wage review policy in Cambodia, apparel exports continued to grow.
The local purchasing power of workers’ wages in Bangladesh is also significantly lower than those of workers in competing peers, it noted.
Titled ‘Waiting Game: Minimum wage-setting in Bangladesh’s apparel industry’, the policy brief was authored by Jason Judd, Brian Wakamo and Sarosh Kuruvilla.
“There is a clear need and room—both political and economic—for an annual wage-setting process in Bangladesh organised and institutionalised by the new government with bona fide representatives of workers and employers,” the policy brief said.
The experts also called for an annual wage hike in line with inflation, which hovers around 10 per cent in the country.
Fibre2Fashion News Desk (DS)
