The existing monthly minimum wage is unjust and unacceptable | The Business Standard
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SUNDAY, MAY 28, 2023
The existing monthly minimum wage is unjust and unacceptable

Panorama

Dr M M Akash/Economist 
07 December, 2020, 12:35 pm
Last modified: 07 December, 2020, 01:46 pm

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The existing monthly minimum wage is unjust and unacceptable

The monthly minimum wage level in Bangladesh was $48 or around Tk4,070 in 2019 – the lowest among all nations in Asia and the Pacific region

Dr M M Akash/Economist 
07 December, 2020, 12:35 pm
Last modified: 07 December, 2020, 01:46 pm
Trade union laws should be in favour of the workers to increase their bargaining power. Photo: Salahuddin Ahmed
Trade union laws should be in favour of the workers to increase their bargaining power. Photo: Salahuddin Ahmed

In our society, the minimum wage is determined by subsistence cost, which is equal to food cost and non-food cost. 

 Minimum per capita food cost depends upon the value of the least cost combination of food for an individual. 

 If we are extremely minimalist then we may propose –Tk10 for breakfast and Tk40 for lunch and another Tk40 for dinner, altogether Tk90 per person per day. 

 Non-food cost for subsistence is assumed to be one half of the food cost, so we will have to add another Tk45 per person per day. 

 So, the daily wage of labour in our extremely minimalist view should be at least Tk135 per day per person. 

 If the household consists of four persons, then family subsistence income should be at least per month (Tk135x4x30) =Tk16,200. 

 Now our legal basic minimum wage is perhaps half of this in the garment factories. 

 In the informal sector with Tk300 wage per day and assuming 20 workdays per month, the minimum wage earning comes to only Tk6,000. 

 The monthly minimum wage level in Bangladesh was $48 or around Tk4,070 in 2019 – the lowest among all nations in Asia and the Pacific region, as revealed by the Global Wage Report 2020–21.

 Globally, Bangladesh ranked fifth from the bottom among 136 countries.

 Published by the International Labour Organisation (ILO) recently, the report calculated the "Gross Monthly Minimum Wage Levels in Asia and the Pacific" using the Purchasing Power Parity (PPP) values.

 Pakistan topped the chart in South Asia with a monthly minimum wage level of $491, while India has the second lowest minimum wage level of $215 in the region.

 In the Asia and the Pacific region, the median (average) minimum wage is $381, which is $333 or around Tk18,250 higher than that of Bangladesh. 

 This is the stark reality of Bangladesh, which is socially and morally, given the inequality of income, very unjust and unacceptable.

 So, what are the main obstacles in the way of raising workers' wages? What can be done to ensure fair wages for our workers?

 Firstly, we must enhance decent and productive job supply more, so that employers cannot push wages down to its barest minimum level.

 Secondly, we should arrange education for the workers to increase their skill and productivity.

 Trade union laws should be in favour of the workers to increase their bargaining power. 

 One way of doing that is to ensure social security payments or job guarantee to the workers as we find in Scandinavian and Japanese welfare capitalism, or as is the practice in Vietnam-China-Cuba and other socialist countries. 

 The industry owners, however, are not the only ones exploiting our workers. The entire power structure is against the proletariat class who is property-less and has only labour power to sell.

 Industry owners usually claim that our exports will fall if worker's wages are raised, since our success is heavily dependent on cheap labor.

 I don't think that would necessarily be the case.  

 Through diversified export, with industrial development and productivity gain, we can simultaneously have growth and equity. 

 The East Asian miracle countries have shown that it is possible to have both wage increase and export increase.


 The author is a Professor at the Department of Economics, University of Dhaka

Economy / Features / Top News / RMG

minimum wage / Garments worker / unacceptable / garment business / Labour code

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