Real task requires a balance between interest of workers and industry

Published Date: 28-Dec-2023 | 03:22 PM

Tasmiah Nuhiya Ahmed

A group of eight US Congress members penned a letter to the American Apparel and Footwear Association (AAFA) urging support for fairer wages and the safeguarding of labour rights for Bangladeshi workers.

The signatories, comprising Rep Ilhan Omar (D-MN), Rep Jim McGovern (D-MA), Rep Jan Schakowsky (D-IL), Reps Raúl Grijalva, Barbara Lee, Alexandria Ocasio-Cortez, David Trone, and Susan Wild, collectively emphasized the need for AAFA's robust backing for fair wage {compensation} among Bangladesh's RMG workers (workforce}.

The letter delivered (delved into the} after Bangladesh's recent wage hike announcement, critiquing the increase as insufficient to meet the surging cost of living.  The final gazette of the minimum wages of the garment workers has come into effect from 1st December 2023 and the workers will start drawing the new wages in the beginning of the new year, i.e. January 2024.  As per the new wage scale, in all grade’s wages have increased by an average of 55pc.

The implementation of the new wage will have a significant impact on the costing in every factory undoubtedly, however the increase of minimum wages and ensuring decent living of the workers has been an urge of the global community and the fashion brands / retailers as well.

As reported in several media, Bangladesh Garment Manufacturers & Exporters Association (BGMEA) stated that RMG manufacturers have taken the US congressmen's letter positively as they have been working for workers' well-being for a long time. They further stated that the suggestions made in the letter about Bangladeshi workers' wages, rights, etc are things BGMEA and RMG manufacturers have been working on. Moreover, BGMEA has also asserted that this letter is an internal issue sent by congressional members to their association, so the letter is not directly addressed to Bangladesh. However, the lawmakers have also suggested to brands that the cost of living is increasing, and brands should pay more to afford a living wage.

In addition, BGMEA has sent a written letter to AAFA asking their members brands and retailers to adjust prices to absorb the wage increase. “Now it’s time to see how many of them increase price.  There is no doubt about the fact, that the increased price will create an additional cost burden to the manufacturers”, said Shahidullah Azim, Vice President of BGMEA.

BGMEA further expressed that they are also in support of better living of the workers in principle. The RMG manufacturers said they feel happy when the workers are happy, but they need a price that enables them to sustain a wage level. In recent years the cost of production has gone exorbitantly high, price of electricity has risen by 25pc, gas price by 286.5pc, diesel by 68pc. Similar impact on transport and other cost factors are notable. From July this year Bangladesh Bank has increased the interest to curb inflation, which has pushed our cost of finance further up leading to increased cost of production and cost of goods. Also, bank charges and fees of the municipality and city corporation, including different registration and certification fees, have significantly increased. “In the past decade, industry invested millions of dollars to remediate Bangladeshi factories, and we are constantly investing in greener manufacturing, emission reduction, resource efficiency to meet the emerging due diligence requirement”, said the Vice President. Hence, BGMEA has urged the buyers to also consider the impact of other cost increases duly in addition to wage increases including factories investments in sustainability.

“This is important that we collaborate with each other on this agenda. And it is a matter of great relief that we have also received official letters from several brands confirming their stance on absorbing the wage increase in price. We hope the others will follow the path as well”, said the Vice President of BGMEA.

It is time that we consider if wages are increased as demanded, how many factories or what percentage of factories in Bangladesh will declare bankruptcy. The main challenge is to strike a balance between the rights of the workers and sustainability of the industry.

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