Can Bangladesh break its cycle of garment wage unrest?
Recurring wage disputes in the garment industry, the country’s largest export earner, have shown how successive increases in minimum wages have done little to protect workers’ purchasing power against rising living costs.
The government has responded to the latest bout of protests by forming a six-member wage board. But the immediate question of how much workers should receive is accompanied by a longer-term problem of how to establish a wage structure that preserves purchasing power without undermining the competitiveness of an industry employing about 40 lakh people.
Workers are demanding a minimum monthly wage of 30,000 taka, compared with the current 12,500 taka. Manufacturers say a 140% increase would place considerable pressure on factories already contending with higher production costs, energy shortages and competition from other exporting countries.
The dispute has caused extensive disruption. On Monday, production was suspended at at least 690 factories employing more than 17 lakh workers, according to figures from the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).
Of these, 382 factories were in Gazipur and Mymensingh, 223 in Savar, Ashulia and Zirabo, 65 in Mirpur and about 20 in Narayanganj. The closures followed disruption at 529 factories on Sunday.
Hundreds of workers blocked the Dhaka-Tangail highway in Gazipur on Monday. Protests also spread through industrial areas of Dhaka, while police deployed tear gas and water cannons in confrontations with demonstrators.
The government has urged workers to return to their factories while the wage board begins negotiations. Manufacturers have warned that continued disruption could delay export orders and prompt factory closures under labour law provisions.
Yet the formation of another wage board does not itself address the problem that has accompanied successive revisions, said the industry insiders, pointing out the gap between the statutory minimum and the cost of maintaining a household.
A lasting settlement, they said, would require more than an agreement on the next minimum wage. It would need a mechanism for protecting workers against inflation, a timetable for bringing earnings closer to living costs and an arrangement that takes account of what factories and international buyers can afford.
Why wage increases have failed to keep pace
Bangladesh established its first minimum wage for garment workers in 1994 at 930 taka a month. The rate rose to 1,662.50 taka in 2006, 3,000 taka in 2010, 5,300 taka in 2013 and 8,000 taka in 2018.
The most recent revision, in December 2023, increased the minimum to 12,500 taka, a nominal rise of 56.25%.
But workers had demanded 20,393 taka. The settlement therefore began considerably below the amount sought by unions, even before subsequent inflation reduced its purchasing power.
The current 12,500 taka minimum has purchasing power equivalent to about 9,687 taka in December 2023 prices, a decline of approximately 22.5%.
A 2025 Bangladesh Bureau of Statistics survey of 3,000 households showed average monthly household expenditure of 37,344 taka in urban areas and 32,532 taka in rural areas. A separate study by the research organization Power and Participation Research Centre estimated average household expenditure at 20,826 taka.
These figures are not garment-worker-specific living-wage calculations. They nevertheless demonstrate the difference between the statutory minimum and typical household spending.
The 2023 settlement was intended to provide workers with a higher minimum income. By 2026, much of its initial purchasing-power gain had disappeared.
The government subsequently introduced an additional annual increment, taking the rate to 9%, although the entry-level minimum for newly recruited workers remained unchanged.
“Annual increments for existing employees can improve their earnings, but they do not necessarily protect the starting wage against inflation,” Dr Khondakar Golam Moazzem of Center for Policy Dialogue (CPD) told Daily Waadaa. “Nor do they ensure that a worker's total income is sufficient to meet household expenditure.”
Garment workers frequently depend on overtime and additional allowances to supplement their regular salaries. And for households with children, rent, transport, healthcare and food costs can consume most of that income.
Nazma Akter, president of the Sommilito Garments Sramik Federation, told Waadaa that workers' demand for higher wages reflected the increase in essential expenses.
"Of course, workers need higher wages. A gas cylinder alone costs around 2,200 taka, while the prices of essential commodities continue to rise. Workers' wages must reflect the increasing cost of living," she said.
The problem extends beyond the latest three-year period.
Successive wage boards have delivered substantial nominal increases, but adjustments have been infrequent, with no automatic mechanism to compensate for inflation between revisions.
The government has now reduced the statutory review cycle from five years to three. That should shorten the interval between negotiations, but it does not guarantee that wages will retain their purchasing power during those three years.
What can factories afford?
Manufacturers acknowledge that workers face higher living costs but say the scale of the proposed increase would be difficult for many factories to absorb.
A rise from 12,500 taka to 30,000 taka would add 17,500 taka a month to the minimum wage of each affected worker. For a factory employing 2,000 workers at the current minimum, that would represent an additional wage bill of 3.5 crore taka a month, or 42 crore taka annually, before accounting for any corresponding adjustments to other salary grades, benefits or payroll-related costs.
The increase would also have different effects across the industry. Large manufacturers with higher productivity and stronger relationships with international buyers may have greater capacity to absorb wage increases than smaller subcontracting factories.
Kudrat-E-Khuda Maruf, a director of Fatullah Apparels, told Waadaa that manufacturers supported a revised wage structure but wanted the process to proceed without disruption.
"We support the formation of a new wage structure. However, we do not support vandalism, particularly when the process is already moving forward in accordance with the law," he said.
Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association, said the board should independently assess proposals from employers and workers before recommending a new minimum.
"The wage board should listen to both sides and independently determine the new wage structure," he told Waadaa.
Mohammad Hatem also said manufacturers were concerned about the effect of repeated closures on production and export commitments. “This can’t go on,” he added.
Solaiman Kabir, general manager of Jamuna Apparel Ltd, said the protests were already disrupting factory operations. "Most workers are not participating in the demonstrations voluntarily, and some are allegedly being pressured or forced by outsiders to join the protests," he told Waadaa.
"As a result, production at our factories is being disrupted, which could eventually affect our ability to fulfil orders."
Anupam Dutta, director of SiATEX Bangladesh, meanwhile said manufacturers and workers were facing different consequences of the same economic pressures.
"Rising commodity prices are making it increasingly difficult for workers to manage their living expenses. At the same time, factory owners are also facing considerable financial pressure amid the current economic situation," he told Waadaa.
The financial constraints facing exporters complicate negotiations over the minimum wage. Bangladesh's garment industry operates within international supply chains in which overseas buyers negotiate prices, delivery schedules and quality requirements.
Factories cannot necessarily recover higher wage costs by increasing prices unilaterally. Buyers can compare sourcing costs across competing garment-producing countries, while manufacturers must also finance materials, energy, transport and other operating expenses.
Economist Selim Raihan, writing in The Daily Star on Sunday, identified phased wage adjustments, productivity improvements and fairer prices from international buyers as important considerations in reconciling higher wages with industrial competitiveness.
That points, Selim Raihan wrote, to a financing question largely absent from conventional wage-board negotiations: how much of the additional labour cost should be absorbed by manufacturers, and how much should be reflected in the prices paid by international brands?
Without higher purchasing prices, factories with limited margins could respond to substantial wage increases by reducing recruitment, limiting overtime, investing in automation or cutting other operating costs.
Conversely, holding wages below the cost of living could perpetuate labour shortages, employee turnover and industrial disputes, imposing costs of its own, Selim Raihan identified.
A settlement that lasts beyond December
The government said that its immediate priority is to restore factory operations while establishing a credible timetable for wage negotiations. The new board, chaired by Sheikh Ashfakur Rahman, includes representatives of employers, workers and a neutral member.
Babul Akhter, general secretary of the Bangladesh Garment and Industrial Workers Federation, and Anwar Hossain, president of Bangladesh Jatiyatabadi Sramik Dal, will represent workers.
ABM Shamsuddin, a BGMEA director, and Asif Ayub of the Bangladesh Employers Federation will represent employers. Mosleh Uddin Ahmad, a University of Dhaka professor, has been appointed as the neutral member.
The board is required under the labour law to recommend a wage structure within six months of receiving a government directive, although the government can extend that deadline.
The previous wage board took approximately seven months from its formation in April 2023 to reach a final recommendation in November. Labour representatives want a faster settlement this time.
Babul said at a press conference on Monday that the revised wage structure should be finalised by December, when the three-year period following the last adjustment concludes.
Union proposals range from 27,500 taka to 37,000 taka, including demands for 30,000 taka, 32,000 taka and 35,000 taka.
"We will have to sit with the stakeholders and discuss their proposals before reaching a decision. The objective is to arrive at a reasonable and practical wage structure that reflects current market conditions," Babul said.
Salahuddin Swapan, general secretary of the Industry All Bangladesh Council, said a December settlement would benefit both sides.
"If the wage board can finalise the new wage structure by December, it would be beneficial for both workers and employers," he said.
Taslima Akhtar, president of Bangladesh Garment Workers Unity, also supported "completing the revision through the established legal process."
The immediate negotiations offer several possible approaches, although the government has not announced a preferred formula.
One would be to agree on a higher minimum wage immediately, with additional increases phased in over the following two or three years, Dr Moazzem told Waadaa. “This could provide workers with an initial improvement while giving manufacturers time to adjust production costs and negotiate prices with buyers,” he said.
A second, Dr Moazzem said, would be to introduce an annual cost-of-living adjustment linked to a recognised inflation measure, alongside the existing periodic wage review.
“Such a mechanism could protect the real value of wages between major settlements. It would also reduce the extent to which each wage board must compensate for several years of accumulated inflation,” he said.
There is also a case for involving international buyers more directly in financing higher wages, as suggested by Md Sazzad Amin, an apparel manufacturer.
“A phased wage agreement would be more sustainable if major brands accepted corresponding adjustments to sourcing prices, particularly for contracts extending beyond the implementation date,” Sazzad told Waadaa.
However, Sazzad said, buyer commitments would need to be measurable and reflected in actual purchasing agreements. “General pledges to support better wages would not necessarily translate into additional revenue for factories,” he said.
Political allegations complicate the dispute
The negotiations are taking place amid allegations that groups outside the garment workforce have encouraged violence during the demonstrations.
Senior police officials on Monday alleged that domestic and foreign actors were involved in attempts to destabilise industrial areas.
Dhaka Range Deputy Inspector General Mostafizur Rahman and Dhaka Superintendent of Police Shamima Parveen said investigators were examining the involvement of people accused of vandalism and attacks on factories.
Several labour leaders and manufacturers interviewed by Waadaa also alleged that outsiders were responsible for some incidents of violence.
Nazma and Salahuddin both said workers' wage demands should be distinguished from "acts of vandalism."
Mohiuddin Rubel, a former BGMEA director and additional managing director of Denim Expert Ltd, said the wage revision should proceed under the law.
"We have always followed the law, and the process is currently moving forward through the established legal framework," he told Waadaa.
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