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

    Moazzem, Khondaker Golam | September 2019
    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.
    Citation
    Moazzem, Khondaker Golam. 2019. New Minimum Wage of the RMG Sector Addressing the Issues of Non-Compliance in Implementation. © Centre for Policy Dialogue. http://hdl.handle.net/11540/11304.
    ISSN
    2225-8175 (Online)
    2225-8035 (Print)
    Keywords
    Economic Crisis
    Economic Efficiency
    Economic Policies
    Regional Economic Development
    Job Evaluation
    Evaluation
    Macroeconomic
    Macroeconomic Analysis
    Performance Evaluation
    Impact Evaluation
    Economic Welfare
    Economic Incentives
    Economic Efficiency
    Economies in transition
    Economic agreements
    Social condition
    Economic dependence
    Economic assistance
    Crisis
    Unemployment
    Economic cooperation
    Gross domestic product
    Employment
    Economic forecast
    Economic indicators
    Growth models
    Gross domestic product
    Macroeconomics
    Economic forecast
    Financial crisis
    Labor economics
    Regional economics
    Turnover
    Economic survey
    Job analysis
    Labor turnover
    International relief
    Exports
    Economic development projects
    Economic policy
    Economic forecasting
    Wages and labor productivity
    Efficiency wage theory
    Income Distribution
    Online
    Digital
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    Citable URI
    http://hdl.handle.net/11540/11304
    Metadata
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    Thumbnail
    CPD-Working-Paper-129-New-Minimum-Wage-of-the-RMG-Sector.pdf (618.7Kb)
    Author
    Moazzem, Khondaker Golam
    Theme
    Economics
    Development
     
    Copyright 2016-2021 Asian Development Bank Institute, except as explicitly marked otherwise
    Copyright 2016-2021 Asian Development Bank Institute, except as explicitly marked otherwise