Bangladesh is burning with rising unemployment and low living wages. The public resentment was further fuelled by the quota policy in jobs, which led to massive riots and forced Prime Minister Sheikh Hasina to flee the country on August 5. While the 30 per cent quota in jobs for descendants of freedom fighters was the last straw, the country’s public has been seething for years over rising youth unemployment and low minimum wages.
Workers in Bangladesh receive one of the lowest minimum wages in the world, except for a few countries like Burundi and Rwanda. According to the International Labour Organization, while the average minimum wage of 110 countries was US$791 in 2022, the minimum wage in Bangladesh on a purchasing power parity (PPP) basis was only US$45.
Bangladesh is the third largest supplier of clothing in the world, second only to China and the European Union. The bulk of the textile industry is located in and around Dhaka. A report by the Anchor Research Institute in 2023 showed that an average family in Dhaka earned 16,450 Bangladeshi taka in 2016, while family expenditure was 25,990 taka. In 2023, the net living wage increased to 25,462 taka (about Rs 18,200), but family expenditure also increased to 40,228 taka (about Rs 28,800) and the gap of 37 percent remained the same. The same trend is seen in satellite cities of Dhaka.
It is noteworthy that 16 apparel and footwear companies including Adidas, Puma, Gap and Levi Strauss wrote a letter On October 11, 2023, a letter was written to then Prime Minister Sheikh Hasina to take urgent action regarding the minimum wage in Bangladesh. “The consultation should try to increase the minimum wage to a level that is in line with the wage level and benefits that are sufficient to cover the basic needs of workers and some discretionary income, and take into account inflationary pressures,” he wrote.
“We found that the average monthly net wage for garment workers in Bangladesh has not been adjusted since 2019, while inflation has increased significantly during that time. We continue to recommend that the Bangladesh government adopt an annual minimum wage review mechanism to keep pace with changing macroeconomic factors,” they said.
Last year, garment workers and their unions demanded the minimum wage be raised from 8,000 taka (Rs. 5,700) to 23,000 taka (Rs. 16,400). The minimum wage in Bangladesh has remained at 8,000 taka since 2018 – below the World Bank poverty line for a two-to-three-person family in 2022, according to the report. Fair Labor AssociationHowever, the government’s wage board, which mainly comprises garment factory owners, proposed a minimum wage of 10,400 taka (Rs 7,400), half the amount demanded. This led to widespread protests in October and November last year.
Although the Bangladesh Minimum Wage Board has set the updated minimum wage for the garment sector at 12,500 taka in December 2023, which is equivalent to $113 (or about Rs 8,900), this did not calm the anger of the people as they found the wage hike negligible compared to the cost of living.
Apart from low wages, ordinary people in Bangladesh are also grappling with skyrocketing inflation. The inflation rate is set to rise from 5.5 percent in 2021 to 7.7 percent in 2022 and 9.9 percent in 2023. Adding to their troubles, the youth unemployment rate has been hovering at over 15 percent since 2020.
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