Cover Story

The Bare Minimum

Tamanna Khan and Shudeepto Ariquzzaman

Following the declaration of the minimum wage scale of Tk 3,000 for garments workers, violent protests broke out in different parts of the capital and Gazipur, as thousands of workers demonstrated for the minimum wage to be set at Tk 5,000. The demonstrations quickly degenerated into violence as protestors vandalised business centres and private property. However, there are still many unanswered questions regarding the reasons behind the unabated crisis.

July 30, 2010 started as just another normal Friday for 16-year-old Rumi Akhter. Every morning she wakes up at 7 in the morning and goes to work at a nearby garments factory; she comes back home as late as 10 in the night. It is a tedious job for a grown-up, let alone a teenager, but she hardly complains. The meagre monthly salary of Tk 1,662 she gets by working in the sweatshop is nevertheless too important for her and her family. Rumi lives in a 15 x 15 square feet room in Moghbazar's Baro Number Bosti. She shares the room with six other people – her parents, two young brothers aged 14 and 10 and her elder sister Salma Akhter, a garments worker in the same factory. Her father, a former rickshaw puller, cannot work due to old age and it is up to her mother, a part-time domestic help and the two sisters to provide for the family.

“Working conditions are not good, it is really hot in the factory,” she says, “There is no fan and I have to work continuously in this suffocating place all day, every week, including Fridays and many public holidays. I got a holiday for the Shab-e-Barat after a long time.” For her it has been a welcome break from her gruelling work life. “I stayed in the colony (slum) all day long relaxing and chatting with friends. I cannot remember the last time I did that. Everyday we have to put up with the abusive language of the managers.”

More than two million workers are engaged in the garments industry of which 80 percent are women.

Rumi Akhter is one of the country's two million garment workers of which 80 percent are women. These workers, who toil from morning to night six and often seven days a week, form the backbone of Bangladesh's most successful export-oriented industry.

The garments industry of Bangladesh has been the key export division and a main source of foreign exchange for the last 25 years. According to the latest World Trade Organisation report, prepared on the basis of export data in 2007, Bangladesh ranks fourth in the world of clothing exports and has grabbed three percent market share. According to Faruque Hassan, Vice President of Bangladesh Garments Manufacturers and Exporters Association (BGMEA), the latest position of Bangladesh might be third in terms of value and volume. “Apparel exports of the competing countries have increased in some markets but decreased in some others, while Bangladesh's growth was steady in all markets,” he says.

M M Akash, Professor, Dept. of Economics, University of Dhaka, says that the rise of wages and the wind of change regarding labour rights in the west made the entrepreneurs look for an alternative solution and they found the answer amongst the huge population of the east, in the form of cheap labour. “The core of the business, cheap labour was plentiful in Bangladesh and the low capital investment required attracted many entrepreneurs to the sector during the 1970s,” he says.

“Initially it was young women, working as domestic help in urban areas and housewives of rural areas, who joined the industry supplying labour at low wage rates that they never even reconsidered,” Akash says. Like Rumi Akhter, these underprivileged women had little choice but to accept the wage offered to them.

The first generation of garments entrepreneur thus enjoyed the full benefit of low labour cost, setting the wages as per their prerogative; until the boom in the sector took up government's attention in the 90s and in 1994 the first minimum wage board was set for the industry under the Minimum Wages Ordinance, 1961.

Unfortunately, for the garments workers the minimum wage set at that time was only Tk 930, far lower when compared to the minimum wage of 1969, Tk 125; absolutely inconsistent if 25 year's inflation is taken into consideration. The workers had to wait another 12 years for a revision of the wages under the new National Labour Law, 2006 but again the minimum wage set at Tk 1,662 was not justifiable taking inflation into count.

“Even if we consider 15 percent inflation the raise should have been 180 percent in 12 years. Instead the raise was a flat Tk 732, which comes to be approximately a 79 percent raise,” Dr Wajed-ul Islam Khan, General Secretary of Bangladesh Trade Union Centre (BTUC), says.

Shirin Akhter, President, Bangladesh Jatiyo Sromik Jote (BJSJ) says that back in 2006 a minimum wage of Tk 3,000 was proposed but the union leaders failed to come to a consensus to negotiate with the owners. At that time even civil society expected the justified wage to be at least Tk 2,200 but the workers lost the bargain.

Oblivious to these economic calculations, Rumi Akhter, like most garments workers had hardly guessed that July 29 was going to be an eventful day in the history of RMG workers in Bangladesh. Rumours had been afloat at her workplace and in the neighbourhood that the government was going to declare a rise in the wage of RMG workers, but growing up in a shanty slum and working in a garments factory had made Rumi pessimistic. Like most of her co-workers, Rumi had little knowledge concerning the complicated negotiation process that was going on for the last few months involving the Government, BGMEA and the labour leaders.

Trade union leaders rejected the proposed minimum wage structure as soon as it was announced.

She did not know that a six-member board was formed on January 14, 2010, where she and her compatriots in the garments industry were being represented by Shamsunnahar Bhuiyan, General Secretary of Mohila Sramik League to sit with Md. Shafiul Islam Mohiuddin, 2nd Vice President of BGMEA, who represented the garment owners, to discuss the issue of minimum wage. The other committee members included the chairman, an independent member, two other permanent members representing workers and owners.

Although the minimum wage is to be revised every five years, as per the National Labour Law 2006, any stakeholder may ask to review the wage in the interim period and this time it was the government's positive initiative that led to wage revision within three and a half years.

While the board was engaged in extensive research on the issue of a justified minimum wage, workers were beginning to voice their demands. On April 10, workers of Opex and Sinha Group began demonstrations demanding an increased pay, attendance allowance, overtime allowance, leave allowance and wage increments. By April 29, almost 20 factories suspended production, as sporadic agitation broke out in different parts of the city. At around the same time different union leaders and a faction of garment workers began to demand a minimum wage of Tk 5,000 and the right to form factory trade unions in tune with the ILO Convention 87 and 98, since the existing trade unions are either politically backed or not registered with the labour department.

However, according to BGMEA sources, trade unions only make industries inefficient. “We are an ILO signatory, there is no barrier before setting up trade unions. But there are reasons why trade unions have not been formed; 80 percent of garment workers are women, who have very limited education and awareness. Legally, trade unions on the enterprise level should not have members from outside the industry. Also there are welfare committees in the factories, and if any worker encounters problems, they can always go to the welfare committees,” BGMEA President Abdus Salam Murshedy says. He hastens to add that most factories that allow trade union activities have to stop functioning.

Following the declaration of the minimum wage scale of Tk 3,000 for garments workers, violent protests broke out in different parts of the capital and Gazipur.

After months of speculation and intense negotiations, accompanied by labour protests demanding wage rises and better working conditions which often degenerated into violence, the Labour ministry finalised the framework that would set the minimum wage at Tk 3,000 on July 26, 2010. Previously, BGMEA had insisted that the minimum wage should not be anymore than Tk 2,200. The owners have repeatedly expressed their inability to meet demands of higher salaries on grounds of high production cost, buyers' pressure for low price, high interest on bank loan, soaring yarn price and low cutting and making charges offered by foreign buyers.

Murshedy says, “In the fiscal year 2009-2010 minimum wage scales have been declared in other industries as well since the current government took power. Comparatively, the minimum wages of these industries are much less than the wage scale declared for the garments industry. The infrastructure of this country as compared to our competitor nations such as China or Vietnam is inferior.”

He thinks that Bangladesh is at a disadvantage vis-à-vis the other countries and cannot afford the internationally competitive wages. “There is a huge crisis of electricity and gas in Bangladesh. The port turnaround time has increased from two and a half days to 10 days. Everything adds up to our production costs. This is an international business, but if we are only getting local facilities, how can we compete with other countries?”

“The garments industry in Bangladesh has developed with 95 percent local entrepreneurs whereas in other industries 85 per cent entrepreneurs are foreign. The minimum wage for the EPZ where foreign owned factories are based is $30,” Murshedy says.

Initially outnumbered, the law enforcers brought in reinforcements in an attempt to calm the situation.

The declaration of the new minimum wage scale of 3000 is about $43.“Even though Tk 3,000 has been declared as a minimum wage, workers are also entitled to get overtime facilities and in such circumstances, they will get at least Tk 1,500 as overtime salary,” he says, “when the new wage scale is implemented, other industries shall not get workers.” In contrast to what Rumi Akhter says about the working environment, the BGMEA President asserts that the garment's industry offers the finest environment compared to other industries.

Trade union leaders and members do not agree. Right after the news came out on July 28, they rejected the proposal as none of their demands starting from the Tk 5,000 minimum wage to the implementation of the wage before Eid, appeared in the draft.

Agitation again broke out in different parts of the city on July 30, and even after intense security measures and assurances from labour leaders to keep the workers at bay, the sporadic acts of violence were still taking place. The main discontent was among the workers of the fifth and sixth grade as their increase in wage in percentage terms has been the lowest and the difference between their wages and that of entry-level workers is around two to four hundred taka only.

Some of the demonstrators were arrested.

“They are saying that those who would join at entry level will get Tk 3,000 and we are efficiently working for four to five years but getting only a raise of a few taka. So they have asked the government to consider and review their wage,” says Shirin.

She further adds that as per the negotiation rule, any stakeholder can put forward their disagreement regarding the proposed wage within 15 days of its announcement and after that both parties can take six months to implement the decision. Since the government wants to expedite the process, it has given the BGMEA three months’ time instead of six.

As a result the wage announced in July, cannot come into effect before November. She explains that the workers were under a misconception, since Labour and Employment Minister Khandaker Mosharraf Hossain's had earlier declared on April 28, 2010 in a meeting with BGMEA commenting that the national minimum wage will be announced in three months and is expected to come into effect before the Eid. In fact this had been the main cause of the agitation and still most of the workers are holding on to this demand of implementing the new wage before Eid.

Among the rank and file of the ordinary workers, confusion considering recent developments is still prevalent. “Nobody from the outside or the management had told us anything, it was from the news aired on TV on Friday (July 30, 2010) that we learnt that our wages are going to increase,” Rumi says, “Considering rising food prices and house rent, I would have preferred it if the government had fixed my wage at Tk 5,000 but for now I am content with Tk 3,000.” However, unlike Rumi, her elder sister Salma, who works as a helper at the same garment factory, remains sceptical. “Yes, we have heard about the wage structure announced by the government. But the management has not mentioned anything about my wages being increased and I am not totally sure whether I am really going to get Tk 3,000,” she says.

“We have been hearing for the last few months that wages are going to increase but this has not happened as yet,” comments Mokta Begum, who works as an operator in a garments factory in Moghbazar. She currently draws Tk 2,700, excluding overtime, which is Tk 12 per hour. Ideally overtime should start after eight hours but the factory management considers overtime after nine hours of work. “I personally do not think Tk 5,000 is realistic as the minimum wage. I understand that if the owner of my factory incurs a loss, it is a loss for us also. If the factory closes after a few days following increases in wages, I shall also be out of work. We also have to consider the welfare of the factory owner and we hope he shall do the same for us.”

When factories close down everybody loses out.

A RMG factory owner on condition of anonymity says, “This is already a big burden for us, how can they expect Tk 5,000 as the minimum wage? If that happens, the small and even medium enterprises like mine will have to be closed down. Even now many businesses cannot afford the minimum pay scale of Tk 3,000 and some of them might just stop production. How is that going to be good for the welfare of the workers? Foreign powers are trying to destabilise the garments industry of Bangladesh, which I believe is the reason for the violence sparked by declaration of this minimum pay scale.” According to the BGMEA President 90 percent of the RMG factories in Bangladesh are small or medium enterprises.

As with all previous crises in the garment sector, different stakeholders have given different reasons behind the agitation. The trade union leaders called it spontaneous revolution to ensure a rightful wage, the owners called it an international conspiracy and the government alleged it to be a scheme by other interest groups.

Dr Imtiaz Ahmed, Professor of International Relations, University of Dhaka says, “There can be four elements in most industries or businesses. The primary element is the relationship between the labourers and the owners. The second is the relationship, or the clash between different owners within the same industry. Since the garments industry is international, there is also a third element – inter-state competition or conflict between producing nations. The fourth element, which a common feature in Bangladesh is the partisan politics that often divides the entrepreneurs into two camps.”

An increase in the minimum wage is not enough. Garment workers have to be ensured other basic rights such as foods, housing and healthcare.

Thus the agitation as he explains can be caused by any of the four elements but could have been readily avoided had the first element, that is, the relationship between the workers and the owners, remained amiable. Owners' mentality that the low level workers are dispensable, as they are plentiful in supply, has in fact alienated the workers. He asserts that had the workers felt that the factories contributed to their welfare, they would never have engaged in violence. He believes a mere wage rise does not ensure long-term sustainability of a balanced relationship between owners and workers; rather the government needs to ensure investment in non-salaried items such as food, housing and healthcare. Thanks to the positive outlook of the government, apart from the security measures, mass arrest and blame game, a review meeting has recently been held where the government, BGMEA and 42 trade unions representing the garment workers have sent their representatives. The meeting has agreed to a Tk 3,000 minimum wage, given that the government ensures provisions such as rationing of basic food necessities like rice, lentil, salt, cooking oil at an affordable price, low-cost housing, affordable healthcare facility, cheap and sufficient transportation and formation of a welfare fund to create a social security net for the labourers.

Commenting on the apparent satisfaction of many garment workers like Rumi Akhter, Dr Imtiaz Ahmed says, “The salary may be raised today, but after sometime due to inflationary effect it will again look insignificant. If she had a housing facility attached to her job, she would think twice before engaging in rampage, since leaving the job would mean letting go of the cheap accommodation.” Referring to the garments workers Dr Imtiaz says, “If they cannot dream of their child growing up to be a manager in the same industry that they work for, then wage revision will not achieve desired results.”

As this story find its way on breakfast tables on August 13, 2010, the interim period for expressing grievances about the proposed wage will come to an end and the government will start the process of finalising the deal. While the draft documents move through the air-conditioned offices of the law-making agencies, Rumi Akhter and many like her, unaware of the complicated details of the draft and its finalising process, will come out of their stuffy quarters, dressed in some cheap fabric that makes a mockery of the garments they stitch for world class clothing stores, and head towards the factory, a destination which will provide their bread.

opyright (R) thedailystar.net 2010