Bangladeshi apparel firms are coming under increasing pressure from the government to agree a wage hike or accept a government-backed pay rise after another meeting of the Minimum Wage Board (MWB) failed to make any headway yesterday (8 July).

Factory owners have so far refused to cooperate with the garment workers' minimum wage board. And while there are signs that some apparel manufacturers are softening their stance on a wage increase, it remains to be seen whether it will be in line with demands.

"Wage board [meetings] for workers and employees usually reach an agreement within five sittings, but in the case of the garment industry it appears that a new minimum wage for workers will be passed by votes," members of the MWB told just-style as the tenth meeting ended inconclusively. The minimum wage board is set to expire on July 28.

Board members also explained to just-style that they expect to conclude the panel with a majority vote decision to at least double the entry-level minimum monthly wage to around US$50.

 It currently stands at US$24 per month, which was fixed in 2006 and has seen no re-adjustment despite a 100-200% hike in living costs.

The workers' representatives have demanded a minimum wage of US$72 per month at entry level, although this is lower than their initial claim for US$89 per month.

Draft wage proposal agreed
"The majority of the board members have agreed that a draft of the proposed revision of wages will be prepared at the next meeting on 19 July," according to Habibur Rahman Siraj, permanent representative of the workers to MWB.

The MWB chairman Iktedar Ahmed expects that a new minimum wage for garment workers will be passed before the board expires.

The Bangladesh Garment Manufacturers & Exporters Association (BGMEA), the apparel manufacturers' representative at the MWB, has insisted that the new monthly minimum wage should be below US$30. 

"As the government is committed to a wage increase, it is supposed to endorse the voting result of the MWB, and is trying hard for an agreement," said Labour and Manpower Minister Khandaker Mosharraf  Hossain.

The government is under pressure from a number of sides in addition to the workers and their trade unions.

Various research organisations have found that doubling wages is feasible economically if manufacturers increase their operating efficiency, productivity, in-service training and capacity to negotiate price deals with importers.

And some of the garment industry's customers - who include leading retailers in Europe and North America - have also told the Bangladesh government they are keen to see a fair and reasonable wage hike.

In the latest move, a three-member delegation led by EU Ambassador Stefan Frowein met Labour minister Khandakar Mosharraf Hossain this week and spoke about their concern.

They told the minister that the EU is worried about the rising level of unrest and production stoppages in the Bangladesh garment sector.

The delegation asked the government to intervene quickly to restore peace, and the Minister assured them of a solution to the issue within the current month.

Softening stance?
It also seems that some apparel manufacturers are receptive to a wage increase, with their representative at the wage board and a BGMEA leader hinting that their final offer on a wage rise will be put before the government by 20 July.

"The apparel manufacturers are closer to an agreement," said AK Azad, president of Federation of Bangladesh Chambers of Commerce and Industry.

However, factory owners still argue that many manufacturers have been hit by the recession of the last two years.

"The doubling of wages in one go will prove a burden for us," says Fazlul Hoque, president of the Bangladesh Knitwear Manufactures & Exporters Association (BKMEA).

By Jahir Ahmed.