Bangladesh clothing industry struggles with less pliable workforce
- 17 July 2012
- From the section Business
Majeda Akter Toma had many dreams when she started working in a garment factory near the Bangladeshi capital Dhaka about five years ago.
Though her wages were low, she thought the job gave her an opportunity to escape from grinding poverty in her village in north-western Bangladesh. A family of five depended on her earnings.
Now she's decided to go back to her village.
"In the last two years, food prices have doubled and our house rent has been hiked by more than 50%," she tells the BBC.
"But our salary did not go up. We are struggling to make our ends meet.
"At least, in our village we can live in our house and don't have to pay any rent. If we work as a farm labourer, we can have three decent meals a day," she adds.
Ms Toma is one among a growing number of workers who are either leaving their jobs and going back to their villages or trying for employment opportunities to work in the Middle East or Southeast Asia.
Though the number is still small, there is little doubt that the frustration and discontent has been growing among millions of workers.
In Bangladesh, the minimum monthly wage for garment workers is around $38 (£24), at current exchange rates. Trade unions claim its the lowest wage in the world for this type of work.
However, factory owners are in no mood to increase workers' salaries immediately. They point out that just two years ago they had agreed to raise the minimum wage by almost 80%.
They say if they match the union's demand, then they will go out of business.
"Look at the world economic situation. The demand for apparel is not increasing and at the same time our production cost has gone up by 12% last year," says Shafiul Islam Mohiuddin, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
"But we are not getting better prices from the buyers."
The rising discontent among workers is a big cause of concern, not least because of the importance of the sector to Bangladesh's overall economy.
Availability of cheap labour has been one of the key reasons the industry has flourished over the past 30 years. It is now the biggest industrial employer in this impoverished nation.
More than 3.5 million people, most of them women, work in around 4,500 factories around Dhaka and in other parts of the country.
Last year, the country exported around $18bn dollars worth of ready-to-wear clothes, mostly to the European Union and the United States.
International retailers and brands such Wal-Mart, Marks & Spencer, JC Penney and Carrefour source their clothes from Bangladesh.
And as labour costs in other parts of the region, such as China, increase, more global brands are turning to Dhaka to get their products made.
Analysts say that for sustained growth of the sector, manufacturers need to share more of their success with the workers.
"The garments industry in Bangladesh is a success story. But workers think despite being part of the success, they are not feeling the benefits adequately," Dr Debapriya Bhattacharya, a senior economist at the Dhaka-based think tank, Centre for Policy Dialogue, tells the BBC.
"The industry is in the process of getting more new high-value products into new markets. In order to meet the productivity growth, we need to pay the workers better."
'Unprecedented and worrisome'
The calls to sort out the issue with workers have increased even more after the recent labour unrest in the industrial suburb of Ashulia, near the capital Dhaka, which came as a rude shock to the sector.
A number of factories were damaged when tens of thousands of workers, demanding better pay and conditions, clashed with security forces.
More than 300 garment factories were shut down for a few days following the unrest. They were reopened after the government promised them security.
Industry watchers say the violent nature of the protest was "unprecedented and worrisome".
The recent abduction and killing of a trade union activist has only added to the insecurity of the workers. The activist, Aminul Islam, was campaigning for better pay and wages.
His colleagues say his murder in April this year was a warning to those protesting against the low wages and working conditions in the industry.
The government says it is willing to mediate between workers and factory owners but admits that continuing workers' protests will harm the image of the industry abroad.
"There is no doubt protests of this magnitude will definitely send a wrong message," says Khandaker Mosharraf Hossain, the Bangladeshi Labour Minister.
Consultancy firm McKinsey & Company has said that Bangladesh can double its garments exports in the next 10 years and that the country has the potential to become a sourcing hotspot.
But the growing labour discontent is posing a serious challenge to the Bangladeshi clothing industry's attempts to gain ground and analysts warn that it may do irreparable damage to the sector.
"If this is not resolved soon, there's the threat that because of the very nature of this industry, the orders and demands may shift to other countries," warns Dr Bhattacharya of Centre for Policy Dialogue.