Inflation gobbles up overtime income of RMG workers: Sanem survey

Highlights:

• Some workers work more than 10 hours a day
• A worker's salary increased by 10-12% in last one year
• Salary increased due to working extra hours
• House rent increased by 17% in last year
• Price of rice increased by 12.5% in 1.5 years

In the readymade garment (RMG) sector, inflation is taking away the overtime income of workers, thereby reducing their real income, according to a recent survey.

The survey was jointly conducted by the South Asian Network on Economic Modelling (Sanem) and Microfinance Opportunities (MFO) on 1,300 workers in five clusters of the country's garments industry over a period of two years between March 2020 and March 2022.

The survey report was released at a webinar, "The Lives of Garments Workers During Covid-19", on Thursday.

Sanem said it would not be sustainable for workers to increase working overtime. A social security programme targeting increased productivity should be implemented to protect their income, which is otherwise gobbled up by inflation.

The survey was conducted under the Garment Worker Diaries Project, a multi-year project led by Microfinance Opportunities, which collects regular, credible data on the work hours, income, expenses, and financial tool use of workers in the global apparel and textile supply chain in producing countries.

The project aims to ensure that a wide range of stakeholders have access to gaining insights into workers' context, experience, and opinions, so that these can be included in decision-making processes affecting their lives.

Daniela Ortega Sambo, director of operations of the project, Farah Marzan, field manager of the project and Dr Bazlul Haque Khondker, chairman of Sanem, jointly presented the survey report. Sanem Executive Director Professor Selim Raihan moderated the webinar.

According to the survey, the volume of work orders increased later, although the workload decreased a little at the beginning of the pandemic in 2020. The workers had to work overtime, about 10 hours daily, due to the increased work orders. In recent times, some workers have had to work more than 10 hours a day. 

As a result, their income has also increased. The survey shows that in February and March 2021, the median salary per month of a woman worker was Tk10,600, which increased to Tk12,000 in March 2022. During this period, the salary of a male worker increased to Tk13,000 from Tk12,100. Their income has increased mainly due to working extra hours, says the report.

But, in the meantime, the house rent of a worker increased by 17% last March compared to 2020, while the price of rice increased by 12.5% in January 2022 as compared to September 2020, the report adds.

In order to protect the reputation of the garment sector, Sanem believes that "the issue needs careful attention, planning and implementation".

The report says an expansion of supply capacity to meet additional demands has been compelling the workers to work extra hours, which is not sustainable. The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) should clarify what initiative it has taken in this regard.

According to the survey, the initial success of digitisation in paying the wages of the RMG workers has stumbled with the improvement of the pandemic situation. Before the pandemic, salaries of only 28% workers were paid digitally, which jumped to 76% after the beginning of the pandemic. But last March, it dropped to 53%. Before Covid, 76% of workers were paid in cash, but after the Covid outbreak, the figure dropped to 28%. It has now risen to 52%.

However, the Covid vaccination of workers in this sector is satisfactory as 80% of garment workers have been inoculated with the first dose of the Covid vaccine. In this case, the participation of male workers is relatively better.

But the children of the RMG workers have been harmed during the pandemic. Among the respondents, 53% said that no online classes were offered at all to their children while online classes were offered but not frequently to children of 26% of the respondents. Besides, they were offered only to the children of 11% of the respondents, the report says.