New Minimum Wage of the RMG Sector Addressing the Issues of Non-Compliance in Implementation

Abstract

The announcement of new minimum wages for the export-oriented readymade garments (RMG) sector of Bangladesh in August 2018 had exposed a number of non-compliances—a) significant mismatch between proposed new minimum wages and workers’ demands; b) non-compliance with regard to inter-grade skills based setting of wages; and c) non-compliance in implementing the new wages. The present study, based on a field survey, reviewed those non-compliances, and suggested some immediate doables. The proposed basic wages for workers of grades I, II and III were found to be anomalous—only one-fifth of sample workers found new wage as per their expectation. Workers’ skill was treated as a less-attendant issue in setting the new wages, which was reflected in further narrowing down the wage differences between skilled and unskilled workers. No visible improvement was observed in the weak implementation process—only one-third of the sample workers were informed through formal channel; female workers were less aware about the new structure of their wages; and workers’ organisations were non-responsive to workers’ demands. Addressing these non-compliances will require, among others, strengthening the Minimum Wage Board in setting minimum wages, awareness-raising activities through better communication tools, strengthening monitoring mechanism of the Department of Inspection for Factories and Establishments (DIFE) in post-implementation period, and strengthening workers’ organisations in facilitating the implementation process.