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The Financial Express
Swasti Lankabangla Swasti Lankabangla

Living wage vs minimum wage

| Updated: February 28, 2018 22:46:20


Living wage vs minimum wage

At a time the wage board formed by the government at the insistence of ready-made garment (RMG) factory owners is working on a wage structure for workers, the issue of living wage now comes to the fore. Thanks to a study titled, 'Moving towards living wage in the RMG sector in Bangladesh: What will it take?' by Care Bangladesh, some fresh lights have been shed on the issue. There is a tacit admission that under the prevailing circumstances, implementation of living wage in the RMG sector here is impossible. But at the same time there should be an unrelenting effort towards increasing the minimum wages to the level of living wage. The hard truth is that garments workers draw wages that are insufficient for allowing them to lead a decent life. When the minimum wage for a garments worker is Tk 5,300, it hardly allows one to lead a better life than what is called subhuman.

In this connection, the recent price rise of rice, staple food here, and other commodities should be taken into account. Also the emphatic increase in pay package for government employees must not be overlooked. When the minimum salary for a government employee is Tk 15,250, how can a garments worker make do with one-third of that amount when both purchase their essentials from the same market? That owners of garments factories voluntarily took up the matter of fixing minimum wages for their workers is quite significant. But how far are they ready to raise the minimum wage? Already voices have been raised from concerned quarters for fixing the bottom slab at Tk 16,000. A living wage structure is unlikely to be lower than this.

However, with rare exceptions most garment factories will be unable to afford wages at this level. But then the nagging complaint that they will be out of business if the minimum wage is fixed in between Tk 8,000-10,000 cannot be entertained. The garments workers were deprived of reasonable wages at the outset. Since then factory owners have mostly expanded business and transformed their living standard beyond recognition but only at the cost of the workers. RMG workers could be given a better deal last time when in the face of movement a raise in wage was effected. This time the wage board should take into consideration this fact and keep open an avenue for taking the minimum wage to living wage within the shortest possible time.

In this task, though, trade diplomacy will have to be called into action. The Accord and Alliance, two RMG buying consortiums from the Americas and Europe, have played a pivotal role in raising the safety standard in the country's garments factories. Now they should equally stand by the workers here. If they agree to increase the price of a garments article by just a cent, it can be enough to raise the minimum wage for a worker in Bangladesh to a reasonable level. The profit they make on purchase from Bangladesh and sale in their respective markets is unusually high. So, they have a moral obligation to play a role here. 

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