Bangladesh approves wage hike for garment factory workers

Reuters , Thursday 21 Nov 2013

Minimum wage for garment workers in Bangladesh to be raised 77 percent

Garment workers in Bangladesh will get a 77 percent pay increase from December as the government tries to end a wave of strikes that have roiled the world's second largest clothing exporter in recent months.

The official wage board approved on Thursday increasing the monthly minimum wage for entry-level garment industry workers to 5,300 taka ($68) from 3,000 taka currently, a raise that was in line with the expectations of factory owners who had said they would ask retailers to shoulder part of the costs.

Workers had asked for the minimum wage, which was last raised in 2010, to go up to 8,000 taka a month, but the wage board negotiated a compromise which was acceptable to all sides, said Sirajul Islam Rony, a member of the government appointed committee.

"The representatives of the owners and workers have agreed to comply with the decision of the wage board," Rony said.

The new wage structure includes allowances for food, rent, transport and medical care. Workers' basic salaries will also be increased by 5 percent a year, Rony added.

The pay increase follows international pressure on Bangladesh after a string of fatal factory accidents that thrust poor working conditions and pay into the spotlight.

Rock bottom wages and trade deals with Western countries have propelled Bangladesh's garments sector to a $22 billion industry accounting for four-fifths of its exports, with retailers such as Wal-Mart Stores Inc (WMT.N), JC Penney Company Inc (JCP.N) and H&M Hennes & Mauritz AB (HMb.ST) buying clothes from its factories.

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