Kazi Zahidul Hasan :
Apparel exporters have raised concern over a possible adverse impact of workers wage hike saying their production will turn unsustainable unless buyers raise prices.
“The rise in the cost of production as a result of higher wage may put pressure on profit margins and jeopardize competitive edge of the industry in global arena,” M Shafiul Islam Mohiuddin, President of the Federation of Bangladesh Chambers of Commerce and Industry told The New Nation on Thursday.
He said when labour cost increases, it rises the cost of production. The industry owners can adjust the higher wage bills by passing it on to the buyers. But the buyers are not ready to increase the price level. They are rather putting price pressure on us.
“The garment industry of Bangladesh is going through a transition after the Rana Plaza Factory disaster few years ago. The industry owners had to take massive safety programme thereafter. High cost of compliance and a high increase in the minimum wage would definitely put extra pressure on the industry,” said Mohiuddin, who is one of the leading apparel exporters of the country.
He also suggested the government for improving road, transport and Port facilities and business climate to maintain competitiveness of local industry and production.
The minimum wage for Bangladeshi garment workers will rise by 51 per cent from December.
The new minimum wage has been set at Tk 8,000 (approximately $95) a month, up from Tk 5,300 ($63) after a long negotiation between the Bangladeshi government, the Garment workers and the Factory owners. Minimum wage of Tk 16,000 ($189) was proposed at a
National Wage Board meeting in July. When asked, M. Shafiqul Islam Mohiuddin said, “We’re always supporting the workers’ rights to have a decent wage for their labour. But the industry owners are incapable of bearing it because any uneven wage increase can bring disastrous impact on the industry.”
“The main concern with any increase in workers’ wage is the possible impact on the international competitive position of Bangladesh,” Faruque Hassan, Vice-President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) told The New Nation.
He said for the bigger factories the wage hike would not affect much. But, small and medium factories may not afford this wage increase forcing them to wind up.
“Global buyers’ ethical buying practice of global buyers only can help overcome such an adverse situation,” said Faruque Hassan, adding, “The minimum wage hike will affect the RMG industry unless buyers raise prices for local apparels.”
Bangladesh’s garment industry employs four million workers, most of whom are poor village women, and exports about $30 billion a year, making it the world’s second biggest suppliers to global clothing brands and retailers after China.
Almost all top clothing retailers like H&M, Walmart, JC Penney, Inditex, Zara, Gap, M&S, Uniqlo, C&A, Tesco, Hugo Boss and Adidas have been souring garment items from Bangladesh every year.
“We have improved working conditions and enforced compliance rules in our production units in line with buyers conditionalities. Now, they have to share the responsibility considering welfare of the thousands of garment workers,” said Faruque Hassan.
Apparel exporters have raised concern over a possible adverse impact of workers wage hike saying their production will turn unsustainable unless buyers raise prices.
“The rise in the cost of production as a result of higher wage may put pressure on profit margins and jeopardize competitive edge of the industry in global arena,” M Shafiul Islam Mohiuddin, President of the Federation of Bangladesh Chambers of Commerce and Industry told The New Nation on Thursday.
He said when labour cost increases, it rises the cost of production. The industry owners can adjust the higher wage bills by passing it on to the buyers. But the buyers are not ready to increase the price level. They are rather putting price pressure on us.
“The garment industry of Bangladesh is going through a transition after the Rana Plaza Factory disaster few years ago. The industry owners had to take massive safety programme thereafter. High cost of compliance and a high increase in the minimum wage would definitely put extra pressure on the industry,” said Mohiuddin, who is one of the leading apparel exporters of the country.
He also suggested the government for improving road, transport and Port facilities and business climate to maintain competitiveness of local industry and production.
The minimum wage for Bangladeshi garment workers will rise by 51 per cent from December.
The new minimum wage has been set at Tk 8,000 (approximately $95) a month, up from Tk 5,300 ($63) after a long negotiation between the Bangladeshi government, the Garment workers and the Factory owners. Minimum wage of Tk 16,000 ($189) was proposed at a
National Wage Board meeting in July. When asked, M. Shafiqul Islam Mohiuddin said, “We’re always supporting the workers’ rights to have a decent wage for their labour. But the industry owners are incapable of bearing it because any uneven wage increase can bring disastrous impact on the industry.”
“The main concern with any increase in workers’ wage is the possible impact on the international competitive position of Bangladesh,” Faruque Hassan, Vice-President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) told The New Nation.
He said for the bigger factories the wage hike would not affect much. But, small and medium factories may not afford this wage increase forcing them to wind up.
“Global buyers’ ethical buying practice of global buyers only can help overcome such an adverse situation,” said Faruque Hassan, adding, “The minimum wage hike will affect the RMG industry unless buyers raise prices for local apparels.”
Bangladesh’s garment industry employs four million workers, most of whom are poor village women, and exports about $30 billion a year, making it the world’s second biggest suppliers to global clothing brands and retailers after China.
Almost all top clothing retailers like H&M, Walmart, JC Penney, Inditex, Zara, Gap, M&S, Uniqlo, C&A, Tesco, Hugo Boss and Adidas have been souring garment items from Bangladesh every year.
“We have improved working conditions and enforced compliance rules in our production units in line with buyers conditionalities. Now, they have to share the responsibility considering welfare of the thousands of garment workers,” said Faruque Hassan.
