Bangladesh Moves Toward Minimum Wage Hike

Workers Currently Make About $38 A Month

BangladeshA Bangladesh government-appointed board has approved a recommendation to nearly double the minimum wage in an effort to improve the living conditions of workers in the country's highly-scrutinized garment industry. Minimum wage workers in the country currently make 3,000 taka, or about $38 a month. The board on Monday recommended an increase to 5,300 taka, roughly $68.

Expert observers believe that Prime Minister Sheikh Hasina, up for re-election this winter, will intervene and set the wage level slightly higher than the board's recommendation. While experienced garment workers normally make double and triple the current minimum wage in the Asian nation, a wage hike will likely create an increase in the price of apparel coming from Bangladesh, according to David Bebon, CEO of DBEBZ Apparel. "This is the natural evolution of a developing country," said Bebon, a manufacturer who has been sourcing apparel from the country since 1986. "It's going to help Bangladesh."

Safe working conditions in the country's garment factories have been called into question since the collapse of a factory building in April that killed 1,110 workers. While separate safety accords signed by European and American apparel companies appear to offer the most tangible route for safety improvement, a minimum wage increase will likely not have the same direct effect on working conditions. "There are two different issues here, and they are intertwined because the spotlight is on Bangladesh now," Bebon told Counselor. "My opinion is they are tied together because the unions are smart and they see this as a way to better the life of the garment worker in Bangladesh."

Bangladesh is the second largest apparel exporter in the world after China. Despite multiple accidents over the past year that have led to hundreds of worker deaths, garment exports jumped nearly 25% between July and September compared to a year earlier, according to the Bangladesh Export Promotion Bureau. As the prices to manufacture in China continue to increase, Bebon sees a continued demand for Bangladesh's low-cost manufacturing environment as efforts are made to improve safety measures.

"Bangladesh is not going away," he said. "And manufacturers won't leave Bangladesh right now if there is a labor wage increase."