Life with Minimum

Wage in Readymade
Garments Sector in
Bangladesh

Abstract
Minimum wage has always been a matter of debate in Readymade garments sector of
Bangladesh. At present, there are several assumptions , whether a person can meet
his/her required level of nutrition, shelter and other element of life through this mere
salary they receive through their hardcore work. This report have emphasized on this
particular topic based on the current scenario and tried to deliver a near-perfect answer
to all questions regarding this particular matter.

ii

Abbreviations

ADB
BGMEA
BIDS
BKMEA
BSR
CEPAA
COC
CPD
CSR
EIT
ETP
EU
FDI
FLA
GSP
IFC
ILO
LDC
MOLE
NGO
PREMA
R&D
UN
WRAP

Asian Development Bank

Bangladesh Garment Manufactures & Exporters Association
Bangladesh Institute of Development Studies
Bangladesh Knitwear Manufacturers and Exporters Association
Business for Social Responsibility
Council on Economic Priorities Accreditation Agency
Code of Conduct
Center for Policy Dialogue
Corporate Social Responsibility
Ethical Trading Initiative
Effluent Treatment Plant
European Union
Foreign Direct Investment
Fair Labor Association
Generalized System of Preferences
International Finance Corporation
International Labor Union
Least Developed Country
Ministry of Labour and Employment
Non-Governmental Organizations
Profitable Environmental Management Approach
Research and Development
United Nations
Worldwide Responsible Apparel production

iii

CONTENTS

Executive Summary

1.

Introduction

2.

Background

2.a.

Research Hypothesis

2.b.

Research Question

10

2.c.

Limitations

10

2.d.

Scope

11

3.

Literature Review

12

4.

Research Methodology

25

5.

Analysis

26

6.

Recommendations

33

7.

Conclusion

35

8.

Appendix

37

iv

Executive Summary
This report discusses about the minimum wage of Readymade garment sector in
Bangladesh and workers lifestyle. According to many labor board and NGOs , the
minimum wage allowed to Bangladesh garment sector workers is not enough to meet all
be basic needs to have a normal and healthy life standard. The report exhibits the
current condition of workers earnings, expenses and life standard. It emphasizes on
how workers spend their earnings and how they manage to live a normal life with
minimum to spent. Though, the sector itself has given a lot of opportunity to rural people
to improve their life and have a better future by working in countries top-export oriented
sector. But few unwanted incidents and myths around the industry, hampers the regular
growth and reputation of the industry globally. With proper statistical presentation and
analysis of renowned research firm, the report clearly states whether it is possible to
afford all the basic need with the lowest wage practiced in RMG sector in present time.

Introduction
Today, the readymade garment (RMG) sector of Bangladesh is an industry of
US$ 21 billion with a workforce of more than 4 million. 80% of workforce is low earning
and poverty affected women, who have got a salvation through this sector for
fighting poverty and making best out of life for them and their family. The industry began
its journey in late 80s of last century and has never looked backward. Though, at first
there were some struggles faced by early entrepreneurs of this sector to achieve orders
from foreign clients and deliver on time by maintaining a standard. But as time passed
and more entrepreneurs entered the industry with a hope of achieving something big,
the industry grew at higher pace and in 2012-13 the number of factories in RMG sector
is around 5600 and this number is expected to grow in coming years as this industry will
flourish more and increase it share in global market. Bangladesh experienced rapid
economic growth through the RMG sector as this industry is the highest foreign
currency earner. In FY2012-2013, the RMG sector contributed almost 79% of gross
national export of Bangladesh and this uprising trend contribution in national export is a
regular scenario for past decades. Through, producing cloths of global standard at
lowest cost this sector has earned Bangladesh recognition and admiration from all
around the world.
The two major strengths, which helped this industry to reach its current stature,
are cheap labor and capacity of production it retain. Global buyers have been always
attracted to this countrys RMG sector due to the quality of product it produce at a
cheaper rate that the global market share of Bangladeshi RMG sector increased
continuously. This industry not only outclassed its global competitor by its quality of
products but also with the capacity of meeting buyers large demand on time. In current
time, only a handful of countries are able to meet those criteria. With proper
development of skilled workers and increased productivity through upgraded production
facilities, Bangladesh has the potential to become the number one RMG manufacturer
in coming years.
Despite the achievement this industry has brought for the country, there has
been always an issue of workers safety in RMG factories of Bangladesh. In its early
days, the industry faced child labor problem and it was solved through various initiatives
but the safety standards in RMG factories of Bangladesh has been remained a question
which is yet to answer. The industry faced numerous incidents which costs lives and
future of family. Mostly, garments workers belong to poverty affected low earning family
where the worker is the principle earner thus the family was depended on one life. But
devastating incidents in factories have caused families not only lost their loved one but
also their future went blackout. Many initiatives by government and responsible
administration have been taken after such incidents had occurred but they were never
7

fruitful as soon as the dead bodies of demise were buried, people began to forget what
had happened and what should be done to avoid recurrence of incident alike. Due to
reoccurrence of devastating accidents in RMG workplace, buyers and consumers are
concern about the working condition and also demanding for proper safety compliance
within RMG factories in Bangladesh.
In spite of having an impressive performance, the RMG industry frequent conflict
and unrest between workers and management. Frequent unrest is a very common
pervasive incident around the garments sector which makes all walks of people
(workers, owners, buyers, investors) apprehensive towards its potentiality. Daily unrest
has become a common feature in the RMG industry. There is a growing concern that
unrests are usually ignored by the owners of the RMG factories. Typically, the factory
owners also actively control the role of management. This controlled management
sometimes disregards some fundamental requirements of workers (like- minimum
payment of wages, unjust payment of wages, irregular and untimely payment of wages,
unfair dismissal and retrenchment, physical and verbal harassment, discrimination on
the grounds of sexual, gender, racial, and religious aspects) which cause serious
hindrance to the productivity and shipment of garments. When these requirements are
ignored by the factory owners, workers become frantic to materialize their demands
through stopping work, demonstration or even vandalism. In this state, the relationship
between workers and management turns into turmoil and trepidation and overall
economic and social condition of the country remain jeopardized. This is a severe threat
to the topmost foreign exchange earning sector of Bangladesh. These incidents have
threatens the very foundation of this industry and its future existence as foreign buyers
are proposing for moving their order to other RMG industries. Effective measures are
needed to be taken in order to save this industry and this countrys economy.
Minimum wage of workers in RMG sector has always remain a topic of
discussion and an important issue, which have been discussed in numerous seminars,
reports and conferences across the country. This issue always makes foreign clients
and international labor bodies concern as they believe that Bangladeshi garments
factories pay their workers a very low wage compared to its peers in other country.
Several survey and researches also suggests that the minimum amount paid by the
factories is not enough for workers to sustain a better lifestyle. RMG workers of
Bangladesh somehow manage to survive with the little money they make from their
earning. Though, RMG sector have the highest revenue from any other sector of
Bangladesh , the factory owners are often criticized that they do not spent a fair share of
their earning behind workers wage or development. This report primarily focuses on the
issue of minimum wage and to judge whether a person or a family can fulfill their basic
needs with the minimum wage provided by the garments sector of Bangladesh.
8

Background
The report primarily focuses on the minimum wage currently provided by the
readymade garment sector of Bangladesh to their workers. Currently, Bangladesh RMG
sector has 8 grades of workers within its workforce. Different category receives different
remuneration and facilities due their responsibilities and importance within the operation
line. The minimum wages board under the authority of Ministry of Labour and
Employment (MOLE) of Bangladesh determents and initiates the minimum wage for
every sector in Bangladesh. Every sector is bound to obey the order and policies
implied by the authority, otherwise strict actions are taken against responsible party.
Minimum wage has always been an issue of debate and unrest among the
owners and workers of RMG sector. During past few years, several workers unrests
have occurred in this sector, which was triggered by safety concern and low wage of
workers in the industry. Though, authority to maintain a balanced relationship and tries
to maintain a healthy relationship between owners and workforce but several external
factors triggers such unrest, which causes unwelcomed consequences for the industry.
The readymade garments sector has experienced a regular growth in past
decade and expected to outclass China by 2021. But the bitter of this scenario is
workers lifestyle has not changed as much as it was supposed to. Though, some factory
owners are heavily involved in social activity to improve workers and their facilities life
through introducing free-school, free health checkup and recreational activities but in
the end there is always a trend of dissatisfaction remain present among] the workforce.
One of the prime reasons of workers failure to manage a standard lifestyle within
minimum wage is actually inflation. Currently, Bangladesh has an inflation rate of
around 7% on average. Though, minimum wage board has recently passed a new
minimum wage structure for RMG sector in 2013 but before that minimum wage was
revised in 2010. Through, these 3 fiscal periods the inflation has remain almost constant
and sometimes reaching around 12%. Thus, such rate of inflation makes difficult for
people from RMG sector workforce to survive. As consequences, some force their kids
to quit education and make them to join factories or other occupations for earning
money. Therefore, they could not escape from the trap of RMG sector. Apart from that,
as low income people live in a less hygienic environment with lack of proper sanitation
facilities. They often get sick and this causes them to spend a huge chunk of money
from their wage. Though, medical allowances are mandatory from factories but it is not
enough.

Therefore, it is required to justify that whether a person or a family can fulfill their
all basic needs with the minimum wage resolute by the minimum wage board and
whether it really helps them to make their future more secured as expected.
Hypothesis
Basic needs are vital for a human being to have a sound life. That includes food,
cloths, education, medical benefit and shelter. These five (5) items are needed for a
person to live a healthy life. Apart from these five (5) elements, a person cannot live a
life to the fullest or remain happy. People earn money with a prime target to meet
his/her basic need and afterward they seek optional element of life.
Hypothesis of the report is that the minimum wage for each grade of worker is
enough for a person to fulfill his /her five (5) basic needs given above without any
difficulty. This report only focuses on the basic need of a human needed to survive in
the society with minimal respect and acceptance from his/her peer and the report is
based on the assumption that minimum wage allows a person to have it without any
additional suffering or difficulty.
The report is expected to demonstrate that a person can afford following
elements without any difficulty by only considering the minimum wage a RMG worker
expected to receives:
1. Have the daily required calorie intake for an adult without any borrowing.
2. Provide himself/herself the required cloths for a person live through different
season and without degrading his/her image in the society.
3. Take treatment from doctor or visit hospital in case of illness or disease without
any financial insolvency.
4. Afford education benefit to his/her children on regular basis.
5. Have enough money to afford a good household with proper sanitation facility in
a hygienic environment.

10

Research Questions
The report is expected to reach a conclusion through primary and secondary
research. The primary research has been conducted using a questionnaire, designed
for readymade garment sector worker, which will help to understand the earning and
living expense of an individual working in garments industry of Bangladesh. The
outcome of research is anticipated to answer following questions:
1. What is the average monthly earning of a specific grade of worker in readymade
garments sector?
2. What is the average monthly expense of a specific grade of worker in readymade
garments sector?
3. Can a readymade garments worker meet the basic needs?
4. Is minimum wage is enough for workers to meet their all necessity?
5. Does minimum wage allow an individual to afford optional needs apart from basic
needs?
The questions mentioned above are expected to be answered through the
analysis of primary data and secondary data gathered for the purpose of this research.

Limitations
The limitations of this report are chiefly concerned with the factor of time and the
lack of availability of relevant research findings pertaining to the Bangladeshi RMG
sector. It can fairly be said that for an extensive secondary research, as of the kind of
this report, a fairly longer time allowing greater and minute analysis of secondary
resources is very much essential. Nonetheless, this report has attempted with much
viability to overcome this limitation.
On the other hand, the lack of research findings and secondary resources
pertaining exclusively to the RMG sector of Bangladesh has been major
limitation to the preparation of this report. The analyses of secondary resources that
have been done for the purpose of this report consisted of theoretical frameworks
germane to the RMG sector in general. The report herein thus attempted to overcome
this limitation by the synthesis and symbiosis of the subjective research findings of the
secondary resources that were obtained and the insights provided by the speakers on
the topics in the seminar. Although research findings exclusive to the RMG sector of
Bangladesh were quite unavailable, newspaper articles and other such materials
provided quite some assistance in overcoming the limitation.

11

The other limitation that this report is subjected to is that the authors were not
exposed to the insight of the representatives of all the stakeholders of the RMG
sector of Bangladesh. The seminar without doubt did give a platform to various
people from the large community of stakeholders of the RMG sector of Bangladesh.
However, many representatives were not present in certain topics discussed
where their presence would have broadened the horizon of insights and thus
enhanced this report qualitatively.

Scopes
This report can be utilized as a reference for further research upon the RMG
sector of Bangladesh. Taking the note of limitations of this report it is known a priori
that very little research is available, thus done, on the RMG sector of Bangladesh.
Therefore, any research work that is intended to be done upon the Bangladeshi RMG
sector in the long run might benefit from the analyses done in this report.
Other than that this report might be useful in understanding the current trend
and initiatives that are in limelight in the RMG sector of Bangladesh. The
manufacturers and other stakeholders of the sector both in Bangladesh and beyond
may get significant insights sketched out in this report. The report might be useful in
understanding the pros and cons of various industrial practices and the views of
scholars and academicians regarding them.
Furthermore, the report might be of assistance in developing strategies by
manufacturers addressing labor issues. Thus, the position enjoyed by the RMG
sector of Bangladesh might be strengthened or enhanced. All these may encourage
further research works to be undertaken focusing on particular aspects of the
sector.

12

Literature review
Background of Readymade Garment Sector in Bangladesh
Bangladesh is a one of the largest readymade garment sector in the world
behind China and it is expected to excel to another the summit in few decades. The
sector has become the backbone of Bangladeshi economy, helping to earn immense
foreign exchange for the country as well as establishing the countrys image as one of
finest readymade garments manufacturing figure. Throughout the establishment of this
sector, overall the sector has experience many ups and downs during its early stage.
Few energetic and dynamic entrepreneurs started doing business in readymade
garment at early 80s without any government aid or intervene.
During early 90s the sector started to grow at a higher rate as new entrepreneurs
were entering the emerging sector as well as financial institutions were also interested
to invest capital in this sector. As a result of increased interest from various agents of
the economy, this sector looks to take a shape of one of leading industrial sector.
Readymade garment sector was established during the period when one of the leading
industries of Bangladesh at that time, Jute industry was deteriorating at a faster pace.
Many factories involved in jute industry were shut-down due to low demand from buyers
and low margin. Therefore, many people become unemployed and though readymade
garments sector has given a light of hope to this unemployed labor force and created
several employment opportunities for people in lower hierarchy of society.
Readymade garments workers are mostly belong to the poverty stricken
population. In most cases, people belongs to this population lack the basic needs
required for a human being to live a healthy life. The majority of RMG workers also
belong to the rural area of Bangladesh. It is well known that rural areas of Bangladesh
are not much developed and lack the facilities, which are provided in urban area of the
country. Since, Bangladesh is a capital centered country, every day at least 1436
people get settled in Dhaka to have a better life and change their fate in the process
due to the facilities provided within the capital.
Through rural to urban transition, people find it hard to get settle in a busy city
and struggle for survival as lack of skill and expertise do not allow them to obtain work
so that they can earn money and survive. But, RMG sect have changed this scenario
and people living in poverty are able to change their life through the opportunities
provided by RMG sector. RMG sector hires people representing poverty stricken
population and train them in tasks they required within their labor force for operational

13

activity of their factory. In addition to that factories provide other benefit and a better
salary so that they can have a comfortable life and survive without worrying the future.

The Problems within Bangladeshi RMG sector

There is no doubt that RMG sector has immense contribution towards improving
the life and future of people living within poverty line of Bangladesh but several
international institutions and labor force bodies believe that workers working within the
RMG sector of Bangladesh are hugely underpaid compared to other countries RMG
sector workers. RMG sector factories of Bangladesh are alleged to pay low wage to
their workers compared to the profit they receive. Though, at the beginning of RMG
sector era in Bangladesh, there were not much regulation and policies for ensuring or
managing workers wage and safety but now a days, administration are much aware of
the underpaid workers scenario and encourages factory owners to follow guideline and
rules set by the government authority of Bangladesh which are established strictly for
RMG sector of Bangladesh. Though, there is always a loop whole remain in the policies
and people get benefit of these errors. There are several problems faced by workers
regarding payment of wage and working hour in RMG sector of Bangladesh.

Heavily underpaid
Safety issue at workplace
Wages remain due for more than one month

Workers in RMG sectors of Bangladesh are regarded as underpaid compared to

workers of RMG sector in other countries such as Vietnam, Sri Lanka, India and etc. It
has been seen that at entry level workers of RMG sector in Bangladesh receive $39 per
month, which is roughly half of the lowest applicable rate in other major garmentexporting countries such as Cambodia, India, Pakistan, Sri Lanka and Vietnam. The
lowest wage applicable in Cambodia, India, Pakistan, Sri Lanka and Vietnam is
respectively US$ 80, US$ 71, US$ 79, US$ 73 and US$ 78. In china the relevant
provincial minimum wages now range from US$ 138 in Guangdong to US$ 262 in
Shanghai. (International Labor Union, 2013)
The differences of minimum wage received by RMG sector workers in
Bangladesh are too low compared to other countries. International Labor Union and
other international labor right body have asked local government authority and
Bangladesh Garment Manufactures & Exporters Association (BGMEA) for taking
initiatives to improve the payment and wage condition of local RMG workers of
Bangladesh. The quality and quantity of readymade garments good produced by RMG
sector of Bangladesh is huge. It has occupied almost 18% market share of international
14

readymade garments manufacturing good in the world market but still the workers do
not receive enough wage for their contribution towards the establishment and survival of
the industry in Bangladesh. According to Asian Development Bank (ADB), Bangladeshs
share of the global garment market has been growing. It is the second-largest exporter
to the European Union, with a 12.0% market share in FY2012, when exports surged by
21.6%, substantially benefiting from a change in Generalized System of Preferences
rules of origin that became effective in January 2011. Bangladesh also has a significant
4.6% share of the US market. Exports of high-end garments are rising, and garment
sales to Australia, Canada, the Peoples Republic of China, India, Japan, Turkey, and
other emerging markets in Asia and South America are expanding briskly.
(Asian Development Bank., 2013)
It must be mentioned that Bangladesh enjoys the comparative advantage over its
competition of RMG global market due to cheap labor and productivity of the workers
involved in the RMG sector but owners are utilizing this advantage against the very
workers, who are helping them to earn profit and achieve higher revenue target through
the dedication and endless working hour in the factory of RMG industry.
In addition to underpaid situation, RMG workers also need to work in an
unhealthy working condition. Due to the emergence of the RMG industry in early 80s
without any government regulatory and policies, enthusiast entrepreneurs have setup
garments privately without considering the safety concern and issues of workplaces. In
the early days of the industry , people used to setup their garments in narrow rooms and
building, which have cheap rent and low management cost but devastating accidents
have occurred in numerous timeframe , which raised the question of government
intervention and governments role to build a workers friendly working environment in
garments factory. As time passed and owners became more aware of the safety
concern, responsible entrepreneurs and factory owners began to operate their factories
with applicable set of safety rules and regulation implied by fire safety authority and
administrator but yet there were some people, who again overlooked these regulations
and began to operate their RMG operation in a more congested, unhealthy and risky
working environment with greed to earn more money with less to spent.
Most of the factories in Bangladesh do not have proper safety instruction or
system for risk management in case of accident or emergency. The lack of safety and
risk management practice has costs much accident in recent past. For example, the
calamity of Rena plaza and Train Fashions fire accident have grabbed media attention
worldwide but before these accidents occurred there were also other event, which have
costs many lives and precautionary measures have not been taken. Workers of
Bangladeshi RMG sector always complain about wage due from their employers. As
most of the garments worker fully rely on their wage they receive from their employers,
15

due wages make their life difficult and they are in most cases unable to meet their daily
need due to lack of financial stability or otherwise, they need to borrow money from
others at higher interest rate.
Current Scenario of Minimum Wage in Bangladesh and Other RMG Countries
In past few years, Bangladeshi RMG sector has experienced numerous workers
unrest. These unrests were primarily caused by the agendas mentioned above but
most important and frequently discussed agenda was garments workers low wage and
their life style. The sector overall has performed in a positive manner as the sector has
contributed 79.63 percent to total export for the FY 2012-2013. During this time, the
RMG sector exported an amount of $ 21.51 billion to global market. It has always
outperformed other sectors in Bangladeshi economy with continuous growth
and made major contribution towards countrys economy. (Trade Information, 2014)
The export trend of RMG sector has always been positive since its creation and
particularly last five years have been outstanding. The sectors annual export
growth rate was 16.251 percent during last five year. And during this period of time
Bangladesh has an average inflation rate of around 7%, which sometimes has
fluctuated to 12% or went down to 6%. (Bangladesh Inflation Rate, 2014). But, the
minimum wage did not changed radically as inflation rate or growth in RMG sector of
Bangladesh.
The definition of minimum wage is different in different countries. The meaning of
minimum wage based on constitution of different countries are given below (Centre for
Policy Dialogue, 2013)

Mexico- The general minimum wage must be sufficient to satisfy the normal
necessities of a head of family in the material, social and cultural order and to
provide for the mandatory education of his children.
India - Living wage for workers, the state shall endeavor to secure suitable
legislation or economic organization or in any other way, to all workers.
Bangladesh- The setting of the minimum wage is an important policy instrument
that can contribute to the socio-economic wellbeing of workers in various
sectors. The term minimum wage is, however, not defined in the Bangladeshi
Labor Act 2006, or in the Amended Labor Act 2013. Although, in an article in
labor act related to wage setting in minimum wage board states that the cost
and standard of living of workers should be taken into consideration while
recommending a minimum wage for a sector: In making its recommendation

Geometric mean of Annual Export of RMG sector between FY 2008-09 and 2012-13

16

the wage board always considers the cost of living, standard of living , cost of
production, productivity, price of products, business capability, economic and
social conditions of the country and of the locality concerned and other relevant
factors.
In economics, minimum wage is the minimum amount of compensation an
employee must receive for performing labor; Minimum wages are typically established
by contract or legislation by the government. As such, it is illegal to pay an employee
less than the minimum wage. (Investopedia, 2014)
Minimum Wage Structure (Eective since 1 November 2010) (Centre for Policy Dialogue, 2013)
Grade and Main Posts

Tk. 6,500

House Rent
(40% of
Basic)
Tk. 2,600

Medical
Allowanc
e
Tk. 200

Net
Salar
y
Tk. 9,300

Tk. 5,000

Tk. 2,000

Tk. 200

Tk. 7,200

Grade 3: Sample Machinist,

Senior Machine
Operator
Grade 4: Sewing Machine
Operator, Quality
Inspector, Cutter, Packer, Line
Leader

Tk. 2,870

Tk. 1,148

Tk. 200

Tk. 4,218

Tk. 2,615

Tk. 1,046

Tk. 200

Tk. 3,861

Grade 5: Junior Machine

Operator, Junior
Cuer,
Marker
Grade 6:Junior
Operator
of General

Tk. 2,395

Tk. 958

Tk. 200

Tk. 3,553

Tk. 2,230

Tk. 892

Tk. 200

Tk. 3,322

Tk. 2,000

Tk. 800

Tk. 200

Tk. 3,000

Grade 1: Pattern Master, Chief

Quality
Controller
Grade 2: Mechanic, Electrician,

Basi
c

Cutting Master

Sewing/Button
Machine
Grade 7: Assistant Sewing
Machine Operator, Assistant
Dry Washing Man, Line Iron
Man
Trainee

17

Tk. 2,500

Definition of minimum wages may vary from country to country but the principle
role of minimum wage is that the wage should be enough for an individual or head of a
family to run his/her family without any difficulty. The wage should be enough to provide
them proper education, proper food or calorie intake and a standard life style in which
they will be able to enjoy their life to the fullest and without worrying much about their
survival for the future. Though, some countries have equal minimum wage legislation
for all sectors but in Bangladesh, minimum wage varies from sector to sector. After
constant pressure from buyers and international labor union, the Minimum Wage Board
has decided to introduce new minimum wage for RMG sector of Bangladesh. In
minimum wage structure of 2010, the trainee was supposed to receive tk. 2500 each
month. During this period, an individual is more likely to grab a thorough experience of
working in RMG sector. The trainee post is the starting position of factory in RMG
sector. In general an individual works as a trainee for 3 month and afterward they move
into grade-7 category of workers.

Minimum Wage Structure (Eective since 1 December 2013)

Grade and Main Posts

Basi
c

Grade 1: Pattern Master, Chief

Quality
Grade
2: Mechanic, Electrician,
Controller
Cutting Master

Tk. 8,500

House Rent
(40% of
Basic)
Tk. 3,400

Tk. 7,000

Tk. 2,800

Tk. 250

Tk. 10,900

Grade 3: Sample Machinist,

Senior Machine
Operator

Tk. 4,075

Tk. 1,630

Tk. 250

Tk. 6,805

Grade 4: Sewing Machine

Operator, Quality
Inspector, Cutter, Packer, Line
Leader

Tk. 3,800

Tk. 1,520

Tk. 250

Tk. 6,420

Grade 5: Junior Machine

Operator, Junior
Cuer,6:Junior
Marker
Grade
Operator
of General

Tk. 3,530

Tk. 1412

Tk. 250

Tk. 6,042

Tk.3,270

Tk. 1,308

Tk. 250

Tk. 5,678

Sewing/Button
Machine
18

Medical
Allowanc
e
Tk. 250

Net
Salar
y
Tk. 13,000

Grade 7: Assistant Sewing

Machine Operator, Assistant
Dry Washing Man, Line Iron
Man
Trainee

Tk. 3,000

Tk. 1,200

Tk. 250

Tk. 5,300

Tk. 4,180

Source- (Gazette on Minimum Wages for RMG Sector Workers , 2013)

The new minimum wage structure of trainee has increased by 67% compared the
previous legislation passed by the government in 2010. But it is yet to decide whether
this minimum payment made to trainee is enough for an individual to survive in an
economy with constant rise in inflation rate.
Minimum wage is conceptually to be set a level which covers the basic needs of
the lowest earned workers on the job-ladder. In Bangladesh, revision has been taken
place for workers of all grades. In that case it is a fixation of structure of wages of
different graders instead of setting minimum wages. According to the last revision of
the minimum wages, grade 7 workers should receive wage around tk. 5300 per month
of which tk. 3000 as basic, tk. 1200 as house rent and tk. 250 as medical allowances.
However, an informal grade below grade 7 has been introduced during the revision of
2010 with the job title trainee. These temporary workers receive a lump-sum of Tk.
4180 per month. During the last revision, minimum wage for entry-level workers
increased by 67.2%, but a similar level of rise did not take place for workers in other
category. For example, grade 1 workers wage increased by 39.8%, grade 3 workers
wage increased by 61.3%. The relationship between wage level and seniority was not
reflected in the structure as evidenced by the low differentials between these grades.
(Estimating a Living Minimum Wage for the Ready Made Garment Sector in
Bangladesh, 2013)
The minimum wage structure per se in the RMG sector provides little incentive
for workers to work long term at the same factory. These can be provided by the factory
based on loyalty incentives. At present there is thus a high labor turnover within the
RMG sector as workers seek the best remuneration package for themselves. Some
companies have been introducing informal sub-grades with a view to recognizing and
remunerating different skills levels.
Apart from the minimum wage, there is an overtime culture in the Bangladesh
RMG sector, necessary for workers to achieve a take-home pay which comes anywhere
near to meeting their basic needs. It has been seen that dependency on excessive
overtime to attain a level of earnings to meet the cost of living is harmful to workers
health and general well-being. In the interest of a sound work-life balance, a minimum
wage needs to be based on improved compensation for normal working hours. For this
reasons overtime is not included in calculation of a minimum wage.
19

In addition to overtime, fringe benefits are also received by employees of

garments factories. This allowances includes attendance allowances, transport
allowances, festival bonuses and production bonuses, But these benefits are not
included as part of the basic minimum wage as well due the lack of guaranty by law.
Lifestyle with Minimum Wage
There is no doubt that the amount RMG workers receive as wage from their
factories or workplace is not enough for them to change their lifestyle too much or
change their status within the society. They cannot afford the luxuries what others can
because they barely make something out of their salary to survive in a challenging
economic environment.
If we focus on the wage of lowest grade worker of RMG sector, which is grade 7,
he/she takes away home tk. 5,300 minimum per month. This amount includes house
rent, medical expense and other benefits as well. Some factories provide transportation
services and some factories do not. But it is mandatory for factories to provide free
lunch service to their worker every day. Center for Policy Dialogue (CPD) has
conducted a research, which gives an estimation of living with minimum wage of RMG
sector in Bangladesh. They have conducted the research based on three
methodologies.
1. Using upper poverty line.
2. Using real picture of existing expenditures and purchasing power.
3. Using a model diet which incorporates energy and nutritional values.

The upper poverty line

The HIES 2010 calculates the costs of a fixed food basket composed of 11
different food items, corresponding to the required minimum calorific intake of 2122
kilocalories per person per day. The costs of this food bundle per person per month
were 1018 Taka for the Dhaka Urban area in 2010.
To arrive at the total food costs for the family, it is assumed that the family
consists of 2.08 adults consuming 2,122 calories and 2 children aged 1 3 consuming
1060 calories each. For a single worker, food costs are equal to the poverty line food
costs corrected for inflation. The ratio of food to non-food costs is determined by using
the ratio of food poverty line : upper non- food allowance. The ratio is 57: 43
The following table presents the detailed estimates of required estimates of required
monthly income for workers having families in case of upper poverty line. The estimated
required monthly income for the married worker is Tk. 5223.
20

Issues
Monthly per person food cost in 2010
Monthly family food cost in 2010
Monthly food cost in 2013 after
inflation adjustment

Tk./month
1018.00
3135.44
4287.36

Monthly non-food cost (43% of total

Monthly
total cost for a family (Tk.)
cost)
Estimated Required Monthly
Income for a married worker
=(Food costs + Non-food
costs)/1.44

Household
No.
size of earners

4.08
1.44

3234.32
5223.39
7521.68
7521.6
8

Source- (Center for Policy Dialogue, 2013)

Actual Expenditures
CPD conducted field research on three areas: Ashulia, Tongi and Dhaka. In most
cases unmarried workers live with their parents and other family members are involved
in jobs. The effective participation in jobs of members of unmarried workers is rather
high compared to those of married workers. A major observation from the field survey is
non-food costs are a major expenditure for workers and their families. The ratios of food
to non-food costs for families of married and unmarried workers are likely to be 50.1:
49.9 and 47.8: 52.02 respectively. In fact non-food consumption expenditure is found to
be more important for unmarried workers. There is a difference in the ratios of food to
non-food consumption between sample workers and the national average of the urban
Dhaka region. Similarly, the size of the family is relatively small compared the national
norm. (Center for Policy Dialogue, 2013)
Furthermore, for a large number of families and in the case of unmarried
workers, if there have more than 1 earner in their Family, these are not always fulltime
earners. So the non-full time earners contribute relatively less to the family income. All
this worker-level information is very important to understand the structure of the family,
nature of participation in the job market and composition of household expenses etc.

21

The following table shows the estimation of required monthly income for married
workers:
Issues

Tk./month
3.2

Monthly expenditures for the

family

Household size

Food Costs

5180.154

Non-food Costs

5172.308

Total Food + Non-food Costs

Estimated Required Monthly
Income
=(Food costs + Non-food
costs of the family)/no of
earners)
Effective Monthly Income =
(Food costs +
Non-food costs of the
family)/no. of full-time earners

10352.46
6430

8216

Source- (Center for Policy Dialogue, 2013)

22

No. of earners
No. of
effective
earners

1.61
1.24

The following table shows the estimation of required monthly income for unmarried
workers
Issues

Tk./month

Monthly expenditures for the

family
Food Costs

4405.7

Non-food Costs

4776.6

Total Food + Non-food Costs

Estimated Required Monthly
Income
=(Food costs + Non-food
costs of the family)/no of
earners)
Effective Monthly Income =
(Food costs +
Non-food costs of the
family)/no. of full-time earners

9182.3

Household size

3.13

No. of earners
No. of
effective
earners

1.86
1.28

4936.7

7173.7

Source- (Center for Policy Dialogue, 2013)

Model Diet
Based on the model diet and family size (4.08) and composition (1 moderately
working man, 1.08 moderately working woman and 2 children aged 1-3) it is possible to
calculate the amounts of food items needed on a monthly basis. The study showed the
amount of food a worker can afford for himself/herself and for his/her family as well
within the minimum wage figure. This includes the required daily allowances in terms of
energy (kilocalories), macronutrients (fat, carbohydrates, and protein) and micronutrients
(vitamins and minerals). Such a model diet listing a number of food items and their
amount that should constitute a persons daily intake, does not (yet) exist for
Bangladesh.
The costs of this monthly family food basket are furthermore calculated using a
price list for Bangladeshi food products in the Dhaka Urban area circulated by the
Ministry of Agriculture. In the case of a single worker, the same calculation is based on
the model diet for a moderately working man only.
23

A model for the non-food items a person needs does neither exist in the
Bangladeshi context, nor is there a consensus on the non-food items that are required to
meet a workers basic needs, since these are - more than food items - dependent on the
development level of a society. As part of this methodology, the non-food costs are
therefore calculated on the basis of the average ratio of food costs: non-food costs as
reported by workers in the FGDs.
The estimated required minimum wage for married and unmarried workers would
be Tk.14856 and Tk.6750 respectively.
The following table shows the estimation of required monthly income for unmarried
workers
Issues
Daily Food costs
Male
Female
Child (2)
Total Daily Food Costs for a
Monthly
Family Food Costs for a Family
Monthly Non-food Costs for a
Family (50% of total cost as per
the FGD)Food + Non-food Costs
Monthly
for a Family
Required Monthly Minimum
Wage=(Food costs +Non-food
costs)/no. of earners

Tk.
117.9 Household
107.3 size
No. of earners
131.4
356.6
10696.9

4.08
1.44

10696.9
21393.7

14856.74

Source- (Center for Policy Dialogue, 2013)

The following table shows the estimation of required minimum wage for unmarried
workers
Issues

Tk.

Daily Food Costs (average of male

and female)
Monthly Food Costs
Monthly Non-food Costs (52% of
total cost as per the FGD)

108
Household
3240 size
No. of
earners
3510

Food + Non-food Costs

Required Monthly Minimum
Wage=(Food costs + Non-food
costs*household size)/no. of earners

6750
6750

Source- (Center for Policy Dialogue, 2013)

24

3.25
1

Non-Food Expenditures
The FGDs with the workers reveal that non-food costs are equally important to food
costs for the garment workers. Overall expenditure as well as its distribution varies in
different locations. For example, the highest overall expenditure is observed in Tongi
followed by Ashulia and Rampura (Dhaka) which partly reflect the general perception of
differences in the expenditure pattern. In contrast, the distribution of consumption of
food and non-food items varies in the opposite direction- from the share of high food
ratio in Rampura followed by Ashulia and Tongi.
Among the food items, the cost of rice constitutes over one-fifth of total food costs both
for married and unmarried workers. In the case of the main non-food items, costs differ
between married and unmarried workers. The main non-food cost items include house
rent (15.3 per cent and 7.7 per cent respectively), education (12.9 per cent and 6.9 per
cent), medical (5.0 per cent and 4.3 per cent) and mobile bill (4.7 per cent and 5.9 per
cent) respectively. Because of a limited family income, workers often have to borrow a
part of income to meet their monthly expenses. The average monthly borrowing for
married and unmarried workers varied between Tk. 770 and Tk. 1830 respectively.
The following tables show the distribution of food and nonfood expense in different area
of Dhaka (Centre for Policy Dialogue, 2013)

Cost per month (Tk.)

Ashulia

Tongi

Food

5294

7916

Non-Food

5296

6563

10591

14479

Ratio of food costs : non- food

costs

Dhaka

Ashulia

Tongi

Dhaka

50

55

38

50

45

62

4440

Married

Unmarried

Food Costs

5180

4406

Of which: Cost of Rice

Non-Food Costs

1118
5172

997
4777

House Rent

789

367

Educational expenses

665

330

Medical expenses
Mobile phone bill

261
242

206
281

Of which:

25

Research Methodology
Primary data collection through questionnaire
Desk research
Primary Research
The primary research is based on questionnaire developed for solely purpose of
collecting data on RMG sectors workers lifestyle and financial stability. Though, the
RMG sector has a vase category of worker, therefore, the report only focuses on grade
7 worker of the industry. They belong to lowest grade of workers in the industry with
less or no experience and they receive the minimum amount of wage compared to other
category of worker.
The primary research was more narrowed down according to matrimonial status
of sample as only single or unmarried individuals were considered as sample for
collection of data. The primary research was conducted in Dhaka city and sample size
is 20 , of which 50% is male and 50% is female.

Desk Research
The secondary sources of information are mostly journals, articles and reports
published by BGMEA, CPD and other relevant organizations. International references
like that of the ILO, report on global Bangladeshi RMG sector known as Seeking
Employment Conditions for Better Socioeconomic Outcomes will be used to get a
holistic view of the best practices of this sector. Apart from that, numerous reports and
research conducted by CPD have been used for gather secondary data as well as
their analysis of current and past scenario of RMG sector. The literature review
section of the research paper was based on these secondary sources of information.
Reports from different websites and articles are used for the overall understanding of
the core research problem and the research questions.

Desk research has been conducted to find out:i.

Preliminary results against the key research questions
ii.
The best practices for ensuring labors do not remain underpaid.
iii.
Initiatives taken by the various stakeholders for development of workers
lifestyle.
26

Analysis of Data
The minimum wage received by grade 7 worker in Bangladesh RMG sector is
around Tk. 5,300. The amount includes a basic of Tk. 3,000; House rent Tk. 1,200,
medical benefit worth of Tk. 250 and other monetary benefit provided by factories on
monthly basis. Grade 7 generally consist assistant sewing machine operator, assistant
dry washing man and line iron man. These posts in the line of operation of a garment
factory are lowest and required less expertise or experience to perform task.
The minimum wage, which is determined by the minimum wage board under the
Ministry of Labor and Employment of Bangladesh, is always a debatable issue as the
board faces external pressure from all stakeholders of RMG sector. They always seek
to determine or issue a unanimously acceptable figure. The factory owners always tend
to reduce the wage demanded by workers and workers often seek a higher wage, which
might not be acceptable for business purpose of factory owners. CPD have worked in
this issue for several years and they have actively participated in determining the
minimum wage of RMG sector. In 2010, their research suggested that a minimum
calorific intake of 2122 Kcal Is required for a person on daily basis.
They suggested an unmarried worker at least need tk. 4936.7 for meeting his/her
necessities. This amount was calculated in 2010 and as years based regarding inflation
this amount is around tk. 5500. Food expense is the prime expense in this case. It has
been seen that around more than half portion of wage is spent behind food expense.
CPD estimated that a person at least spend tk. 4405.7 per month as food expense.
Apart from that, on daily basis a male person needs to spend at least tk. 117.9
and female needs to spend at least tk. 107.3 for food. Rice is a prime source of energy
and it also cost around tk. 35/Kg. in local market of Bangladesh... The cost of rice
constitutes over one-fifth of total food costs both for married and unmarried workers. In
the case of the main non-food items, costs differ between married and unmarried
workers. The main non-food cost items include house rent (15.3 per cent and 7.7 per
cent respectively), education (12.9 per cent and 6.9 per cent), medical (5.0 per cent and
4.3 per cent) and mobile bill (4.7 per cent and 5.9 per cent) respectively. Because of a
limited family income, workers often have to borrow a part of income to meet their
monthly expenses. The average monthly borrowing for unmarried workers varied
between Tk. 770 and Tk. 1830

27

In general, it has been seen that people who work a grade 7 worker has a decent
work experience. On average, it has been seen that people have at least 2 years of
work experience worker. Though, this grade is the entrance level but many workers
tend to switch their
workplace for better
Years of Experience
living and payment
therefore, they tend to 14
gain much experience 12
within this grade or 10
otherwise, they lack
8
required skill to move
6
upper grade of worker.
4
As,
the
primary
2
research was focused
0
on and grade seven
1
2
3
4
worker. It has been
seen that at least more
Years of Experience
than half of sample
have a decent experience of two (2) years. Mainly, grade 7 workers are meant to assist
other workers therefore these grade workers requires less experience to perform task.
In addition, these tasks are less complicated than other tasks.
According to Minimum wage board , the minimum wage for grade 7 worker in
RMG sector is tk. 5,300 as the authority expects that a person is able to fulfill his/her
basic needs based on this earnings. RMG factories are also expected to at least pay
this amount in order to follow the guideline provided by the authority. Otherwise, they
might face consequences. Based on the research conducted on samples, it has been
seen that most of
workers earn around tk.
Monthly Salary (in Taka)
5,500 on average as
14
monthly salary. Which
is almost tk. 200 more 12
than
the
declared 10
minimum wage set by
8
the
authority?
6
According to workers,
4
the amount of minimum
2
wage settled by the
0
government
is
not
5,300
5,500
5,800
enough for them to
Monthly Salary (in Taka)
survive in Dhaka city,
28

though people who live in outside of Dhaka can lead an acceptable way of life with
minimum wage. Therefore, many factories provide additional monetary benefit to their
workers by paying extra amount of money as salaries so that workers can live happily
and work more eagerly. The minimum wage have been received by two workers,
though they mentioned that the factory provide them free lunch and medical benefit
without any expense. More than 50% of sample said that they receive at least tk. 5,500
as their monthly salary though factories do not provide any additional benefit to them.
Apart from that, to motivate workforce and reduce employee turnover ratio, few factories
provide at least 70% more than the minimum wage. Almost six (6) people from the
sample receive wage around Tk. 5,700 from their employers. This strategy is common
among factories to keep their workers motivated and build up loyalty among workers
regarding business institute.
Apart from the main source of earning, many workers are tending to seek or have
alternative earning source. Though in most case, they do not get involve in these
alternative work on regular basis. However, in order to meet certain need workers
sometime work as teastaller,
vegetable-fruit
Alternative Sources of Income
seller and rickshaw puller
during their off time.
Though, every individual
has different need but less
25%
than 50% workers have
Not Required
alternative
source
of
Required
income. The prime reason
for requiring alternative
75%
sources of income is to
gather money to look after
family in village. Since,
villagers are tend to have
bigger family with minimum income, it is hard for few worker to live a life with mere
salary received from garments. Thus, they do part-time business on street as street
vendors or pull rickshaw in order to earn extra money so that they can send it to their
family back home.

29

Although, sometimes the amount they earn through these activities are not
enough for them to
send as families
Earning from other sources
expects a lot from
4,500
them in most cases. 4,000
A
street
vendor 3,500
roughly
earns 3,000
around Tk. 3,000 2,500
monthly , a rickshaw- 2,000
puller earns around 1,500
tk. 2,500 monthly . 1,000
500
These figures do not
0
remain constant as
Rickshaw-puller
Street vendor
Tea-stall vendor
workers do not get
Alternative earning (in Taka)
involved in these
activist on regular
basis because after working for around 12 hours or so , they feel fatigue which prevents
them to work part-time. Though, part-time tea-stall vendor tends to earn more than other
two alternative sources. This requires less physical activity and worker can rest on
his/her tea-stall if required as well as these stalls are popular resting place to streethawkers so it helps worker to earn more money and full fill his/her need.
The monthly expense of workers varies from person to person but on average
the expense remains
around tk. 5,000 on
Break Down of Expenses
monthly basis. Rent
expense also varies 100%
area of Dhaka city as
80%
well as many workers
prefers to live in
60%
outskirt of Dhaka ,
40%
where
rent
is
comparably low as
20%
well as transportation
facilities are better to
0%
5,000
5,400
5,800
their
workplace.
Residence of workers
Food
Rent
Misc.
Medicine
are tend to be slums
or commercial building of one rooms. These building do provide hygienic sanitation
facilities and including all utilize, the rent expense stands around Tk. 1,500 to Tk. 2,250
on monthly basis. The food expense varies from tk. 2,500 to tk. 3,200 individually.
30

Medical expense is almost similar for individuals as almost all factories provide
medical benefit to
their employees on
Monthly Expense (in Taka)
monthly basis at least. 14
Miscellaneous
12
expenses varies from
person to person and 10
8
basically to meet that
expense workers tend
6
to work or seek
4
alternative
earning
2
sources so that they
0
can met their other
5,000
5,500
5,800
needs for example
Monthly Salary (in Taka)
buying
cloths
,
electronics
or
spending money for recreational purpose. Since, workers earn very less and hardly
maintain a quality life, there is no scope for them to have saving for their future. Though,
pension benefit is provided by RMG sector factories but there is no realistic scope for
these low earning workers to preserve some of their earning so that they can establish
their asset for future. Festival and performance bonuses are spend to meet their other
needs , which they could not meet in other time of the year. But , it also must be
mentioned that workers are more concern about surviving in present rather than
thinking about their future. One of the workers said We barely survive with this amount
of money and thinking about saving is nothing less than a joke to use , saving is a
luxury to us . Among the samples , none of individual has saving account or purpose of
saving asset.
RMG workers have very low earning and sometimes they struggle to keep up
with their earnings to
Tendency to Borrow
maintain their regular life.
Therefore , they tend to
borrow money. Borrowing
10%
money creates additional
pressure on them as well
Borrowed money
as the burden of interest
makes them tense and
Did not borrowed
worried unless they repay
money
the borrowed amount. In
90%
most
cases,
workers
borrows money when
31

there is medical emergency. As , they live in slums, where the environment is

unhygienic, people tend to get seek very frequently. Another prime cause behind
borrowing money is sending money to home for urgent basis. Though workers do not
borrow money to fulfill their luxurious demand but people have become more aware of
the burden of interest and day by day the tendency of borrowing is decreasing. Among
the samples at least 90% of individuals have borrowed money in some part of their life
and only
10% people have never borrowed money from other under any
circumstances.
According to primary research, the average monthly earning for grade 7 worker
in RMG sector is around Tk. 5,500 monthly. Though, pay scale varies from factories to
factories but none workers were found paid less than the legislative minimum wage
figure. In addition, it has been seen that companies do offer additional benefit to their
workers during the employment period, which reduces the burden or expenses of
workers. As part of RMG factories social accountability drive, these initiatives or benefits
help factories to keep their workforce motivate as well as reduce the employee turnover.
Though, this research primarily focuses on unmarried workers, some factories offer free
daycare school to workers infants as well as support meritorious students by offering
scholarship for further studies if required.
The average monthly expense a grade 7 worker is around tk. 5,000. However,
expenses solely depends on people preferences and need. It has been seen that some
people prefers to live in a more hygienic environment, thus additional portion of money
is spend on rent for better housing facilities. In addition to that, utility bills also plays an
important role in determining monthly expense. Since, telecommunication has become
an integral part of our lifestyle, people tend to spent at least tk. 300 monthly for this
purpose as well as internet surfing causes the net expense to increase. Some individual
tends to take medicine for different purpose. Since regular medication can cost a
significant portion of salary, variation in monthly expense can be seen by this factor as
well.
The most important portion of expense is food. An individual can easily reduce
his/her food cost if he/she only requires to eat vegetables without consuming any meat
or fish. Though, protein is necessary but people tend to overlook this important food
element due to lack of purchasing power or tend to ration the consumption of protein on
weekly basis. Thus, food expense variations are seen among individual. Workers seem
to be able to meet all of their basic need with this money as they do not need to borrow
additional money to meet their basic needs.

32

However, they do not need have the ability to afford other luxuries but the prime
target of minimum wage is to provide a person the basic needs require to live a normal
life and stay above poverty line. But it must be said that, the minimum wage is not
enough for a person since it does not give them the chance to save for future or build up
their own asset. They work hard every day for a long hour of shift and has very less to
save for their future or for any unexpected need occur in future. The amount given as
minimum wage is never enough, since every person has the right to live a happy and
enjoyable life, minimum wage does not allow them to do so. Some workers tend to work
in part-time at other occupation to fulfill their additional needs due to lack of saving
opportunities.

33

Recommendations
The readymade garments sector has created jobs for millions of people in
Bangladesh and contributing to the social welfare of this country since its inception. The
sector does not only gives people from below poverty line a lifeline to improve their life
but also an opportunity to change their and their next generations fate. Readymade
garments sector has shown a path for woman development and proves how effective
women can be if they get proper guideline and encouragement from the society. The
sector not only changed the social barrier worked against women empowerment but
also allowed women to become independent without relying on others. Thus, the
contribution this sector has made towards Bangladeshi society is immense.
Though, there is always an issue remain a topic of debate. Many believe and
even proved that the garments workers are heavily underpaid and they need to have
better paid to have a healthy life. Studies suggests that the amount earned by people of
RMG sector, is not enough for a person to meet basic need of life. CPD and other
institutions also agrees with the hypothesis that the minimum wage practiced in this
sector required regular adjustment as inflation fluctuates but wages do not.
Therefore, according to the outcome of this research paper following
recommendation are made in order to improve workers life style so that workers
become more efficient, happy and productive , which will help the sector as well as the
countrys economy in coming days.

Minimum wage should be revised on semi-annual basis.

Free school , medical benefit , free lunch should be mandatory as social
welfare activity within every factory of RMG sector.

In general practice, the minimum wage is revised once in two or three years. This
practice is needed to be change. Labor unrests are generally caused by the inflation
and difficulties faced by workers to cop up with their mere salary they get from their job
place. Since , this sector provides a greater chunk of remittance to the economy,
authorities and business personal directly connected to this sector need to evaluate the
lifestyle scenario of workers on semi-annually basis. The price of basic goods in
Bangladeshi market fluctuate a lot as the government do not have strong control over
the pricing of commodities. Therefore, the consumer and in this case , low earners like
garments workers have to pay price by surviving in tough conditions of life. Labor
ministry should track the market of basic need as well as workers lifestyle on semiannually basis to evaluate whether the minimum wage is enough for people to survive
without any difficulty. Inflation adjusted minimum wage policy is also possible but this
option is nearly impractical as workers would not prefer a cut back in their salary if
34

deflation occurs. But a semi-annual observation can reduce unwanted unrest among
workers regarding their wage and expense issue. In this method, the ministry will
establish a basket of essential commodities for workers and evaluate the price of those
commodities on regular basis. The evaluation of commodities will be done by the
minimum wage board. They will submit an evaluation report on semi-annual basis,
which will be given to responsible authority and stakeholders of RMG sector. The report
will be expected to suggest , whether the minimum wage can allow a person to fulfill
their basic need based on current market scenario. Based on the outcome of the
evaluation , the minimum wage board can recommend required action as if new
minimum wage is required or not. If this initiative is taken then all the stakeholder will
also be able to understand the expense burden of workers as well as a valid logic can
be raised for increasing the minimum wage without any complication and unwanted
chaos.
Additional benefits are provided by many factories of RMG sector to their
workers. These benefits include free lunch, free health care facilities , day care and
school for workers children. These benefits not only help the workers but also benefit
firms through increasing productivity of their workers. These benefits are not provided
by all factories as these are not made mandatory by authorities or government. If free
lunch, free education for workers children and free health care service is provided by
firms then , it will eventually reduce the expense burden of workers. As a result, their
monthly expense will reduce significantly and allow them to have the opportunity for
saving. Thus, these additional benefits should be included as mandatory under social
service provided by companies.

35

Conclusion
The RMG industry of Bangladesh undoubtedly has a bright future and potential
to become the leader of global RMG manufacturer. The comparative advantages
Bangladesh has over other RMG manufacturing country are cheap labour and large
capacity to produce as mentioned earlier. With proper and effective development in this
sector along with the comparative advantages the industry pursue in present time. It will
not only benefit the industry itself but also the overall economy of Bangladesh.
Bangladeshi economy is overall dependent on this specific sector, as this sector is
considered as the backbone of nations economy. Banking sector, transport sector and
shipping sector are directly connected with the performance of RMG industry.
Cheap labor allows Bangladesh to remain in the competition in global market.
Bangladesh do not have technical advantage as in most factories machines are
imported from abroad and requires huge capital investment for future improvement and
upgrade. But due to cheap labor and low wage offered to workers, Bangladeshi RMG
factories can offer clothes at lower cost. Although, this cheap labor prevents workers in
this sector to have a better life.
According to analysis of data gathered for the purpose of this research, the
hypothesis is found truth as with minimum wage workers can afford to meet all their
basic needs . It is true that they could not afford savings or have other optional elements
of live but they can meet all their basic needs with the minimum wage. But , authority
and government should focus improve the minimum wage scenario so that workers can
have the opportunity to have saving and build up their asset without any extra labor. So,
their future generation can have a far better and bright future than themselves.

36

APPENDIX

37

Survey Questionnaire

1. Gender -

Male

2. Experience (in years) -

3. Monthly Salary (in taka)-

5,300

5,500

4. Other Source of Income -

Yes

No

5. Earning from other source of income -

2,500

3,000

4,000

6. Total Monthly Expenditure

5,000

5,500

5,800

7. Monthly Expenditure on Rent

1,500

2,000

3,000

8. Monthly Expenditure on Food -

2,500

3,000

4,000

9. Monthly Expenditure on medicine -

250

500

1,000

10. Monthly Expenditure on misc.

2,500

3,000

4,000

11. Monthly Savings-

Yes

No

12. Monthly Borrowing-

Yes

No

Female
3

4 or more
5,800

References
Gazette on Minimum Wages for RMG Sector Workers . (2013, 12 05). Minimum Wage Board.
Bangladesh.
Bangladesh Inflation Rate. (2014). Retrieved from Trading Economics:
http://www.tradingeconomics.com/bangladesh/inflation-cpi
Trade Information. (2014). Retrieved from BGMEA: http://bgmea.com.bd/
Asian Development Bank. (2013). Asian Development Outlook 2013. Asian Development Bank. .
38

Center for Policy Dialogue. (2013). Estimating a Living Minimum Wage for the Ready Made Garment
Sector in Bangladesh. Center for Policy Dialogue.
Centre for Policy Dialogue. (2013). Revision of the Minimum Wage in The RMG Sector in 2013.
Centre for Policy Dialouge. (2014). Minimum Wage in the RMG sectory of Bangladesh.
International Labor Union. (2013). Seeking Bettern Employment Conditions for Better SocioEconomic
Outcomes.
Investopedia. (2014). Definition of 'Minimum Wage'. Retrieved from
http://www.investopedia.com/terms/m/minimum_wage.asp

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