Minimum Wage in Readymade Garments Industry in Bangladesh

Manufacturing Ready-Made Garment (RMG) is labor intensive and low-wage-based industry. Nowhere was this industry static or permanent, basically on account of wage. As soon as any country developed, the apparel and textile industry left that country. RMG is highly focused on the relocation of production. The relocation occurs from high-wage regions to low-cost production regions, just like water always flows downstream. This single sector has been dominating Bangladesh's economy Since the ‘80s. In Bangladesh, different sectors have different wage levels according to the nature of the job. The Minimum Wages Board recommended minimum wages for the 42 industrial sectors. The minimum wage of this same sector is lower than other sectors within the country and among the RMG manufacturing countries. On the contrary, within the country, for the same sector – RMG, there is dissimilarity in the minimum wage. Bangladesh Export Processing Zone Authority (BEPZA) declares the same for the industries inside Export Processing Zones (EPZ), which is higher than the declaration by the Minimum Wage Board for outside EPZ factories. The minimum wage board has classified the non-EPZ workforce into seven grades according to their skills with seven different wage levels. Contrary, EPZ workers are divided into five categories. BEPZA has fixed higher wages and benefits compared to non-EPZ factories. Moreover, the study finds that the grading system has many loopholes which are not based on well thought out and planned. Many posts and positions are required to run an RMG factory that is not mentioned in the gazette. There is no guideline on measuring workers’ competency for a particular grade and how long a worker will be retained in the same quality. These loopholes are helping employers to manipulate determining workers’ rates. The minimum wage structure applies to those whose positions are mentioned in the gazette and entitled to all types of benefits mentioned in the law, including overtime (OT) payment at double the wage rate. To avoid extra overtime payment, factory management promotes or changes the designations like executives, supervisors, etc., who are getting comparatively higher wages to keep them away from OT benefits. All those anomalies need to be adequately addressed.