Can Bangladesh afford to pay garment workers a basic wage of 30,000 taka?

On November 1, workers walked out of 529 garment factories in Dhaka, Gazipur, Mymensingh and Savar-Ashulia. An estimated 987,190 workers joined the protests. Police used tear gas in Mirpur, and the Border Guard was deployed across Gazipur until November 7.

The same day, the Labour Minister announced a six-member wage board under Senior District Judge Sheikh Ashfaqur Rahman. The factories reopened the next morning with the demands unsettled.

The workers want 30,000 taka a month as the minimum wage, an end to blacklisting and the reinstatement of dismissed workers. The current minimum wage is 12,500 taka, fixed in December 2023. It was worth $113 then and is worth about $101 now, as the taka has lost a tenth of its value against the dollar.

The workers' argument rests on rising living costs, including rent. A room in Ashulia or Konabari consumes half the wage, leaving too little for food, transport and school fees. The unions have demanded 30,000 taka on the streets, 32,000 taka or $260 through the IndustriALL Bangladesh Council, and 37,125 taka through thirty-five federations. The BGMEA's first vice-president says the demand has no mathematical basis.

Can the demand be met?

Start with the T-shirt. Sourcing agents in 2026 quote a basic cotton tee from Bangladesh at about $4.20 FOB, against $4.80 from India and China and $5.20 from Vietnam.

Total labour cost, including supervision and overheads, is 15-25% of FOB, about 70 cents on our tee. Most operators already earn above the minimum, so a floor of 30,000 taka raises the wage bill about 1.9 times rather than 2.4, and the labour cost in each tee rises to about $1.35.

The gas tariff increase of April 2025 and the electricity price increase of June 2026 have added another 15-20 cents. Our tee would therefore sell at about $5.00, close to Vietnam's price.

At $5.00, we would sell at Vietnam's price without Vietnam's advantages. My reading of the industry's productivity studies suggests a Vietnamese operator produces close to twice as many pieces an hour as ours and delivers weeks faster. The workers argue that Bangladesh cannot be replaced, and they are right. Other countries do not have four million workers in one cluster or a knit chain of this depth, while Vietnam and China have moved towards higher-value garments. But Pakistan quotes a tee at $4.32, and Cambodia and Indonesia have spare capacity at our tariff.

The buyer does not need to replace Bangladesh. It needs only to move 10-15% of its orders. Our factories say they earn 3-5% on an order, while rent, machinery and salaried staff cost the same whether the production lines run at full capacity or not. A factory that loses a fifth of its orders makes a loss on the rest. To keep the lines running, the owner accepts a lower price on the next order. The buyer needs to move just enough orders to make the factory fear losing the rest.

Can Bangladesh afford to pay workers 30,000 taka a month? The answer is no. A monthly wage of 30,000 taka, recovered from the price of each tee without any increase in output per operator, would price us out of the basic T-shirt market. Nor would it solve the workers' central problem: inflation.

We have seen this before. In December 2023, the wage board raised the minimum wage by 56% in taka. The taka subsequently lost a tenth of its dollar value, while prices rose over the next two years. The worker retained little of the increase.

The factories absorbed the rest, as the board did not require higher output per operator in return. The new board has again been asked only to fix the minimum wage, without linking it to output or inflation. It risks producing the same result.

What can the government do?

It has five choices.

It can concede the 30,000 taka wage and force factories to pay it from their margins. The unrest ends within a week, and the closures begin within a quarter. Composite mills will stop renewing capacity, and subcontracting factories will close because they lack the margins. Orders will move to factories that can automate, while workers in the closed factories will lose both their wages and jobs.

The government can devalue the taka. A fall from 124 taka to 150 taka to the dollar turns 30,000 taka into $200, below what Cambodia pays, without raising the dollar price of the tee. This is the worst of the five options. Workers pay rent in taka but buy rice, diesel and cooking gas at prices influenced by imports.

Factories buy LNG, cotton and spare parts in dollars. Devaluation raises those costs within months. We tried it after 2023 and failed. The workers are protesting again. The government must explain that higher wages alone cannot resolve inflation, the very problem driving the wage demand.

The government can pay part of the demand from the budget. In my estimate, about a third of the gap between 12,500 taka and 30,000 taka reflects rent, transport and food costs. A ration card, dormitory housing on public land and a transport allowance would raise workers' real incomes without increasing the FOB price. The IMF will ask where the money will come from, but a subsidy that keeps a factory open costs less than the unemployment caused by a wage the factory cannot afford.

The government can cut the costs in a tee other than wages. Energy price increases, lending rates reaching 14%, dwell time at Chattogram and the bond regime cost factories more per piece than the proposed wage increase.

The government should unify the industrial gas tariff and implement the port and customs reforms it has promised for a decade. Factories could then pass the savings on to workers without raising prices. The trade-off is time. These reforms take two to three years, while workers want an answer in December.

The government can make buyers pay. A tee retails at $15-20 but contains just 70 cents in labour costs, leaving much of the margin with brands rather than factories. In 2014, brands sourcing from Cambodia told its Deputy Prime Minister they would incorporate negotiated wage increases into their prices.

The BGMEA should present buyers with a published wage path as a condition of supply. The trade-off is that buyers will demand higher output per operator in return.

Which option should the government choose?

The first two fail. The last three work only together.

The board should fix a wage floor that factories can afford through higher output per operator. In my estimate, that floor is 20,000 taka, reached over three years and indexed to inflation so that rising prices cannot erode it. The board should publish the path now, allowing buyers to price it into their 2027 orders.

The Finance Ministry should fund a worker card covering rations, housing and transport in this budget. The BGMEA should take the wage path to buyers and accept that a factory seeking a higher price must demonstrate the output per operator to justify it.

Owners must abandon the five-year wage cycle. Unions must accept 30,000 taka a month as a target rather than an immediate floor.

Can the workers' demand be met? Not through a new minimum wage alone, or a cheaper taka. It can be met if 30,000 taka reaches workers from three sources rather than one. Factories pay part through higher output per operator. The state pays part from the budget. Buyers pay the rest, once the government has reduced the costs it controls.

Only the government can make that happen. A wage board cannot.

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Md Rubaiyath Sarwar is the Managing Director, Innovision Consulting and Lead, Inclusive Development and Socio-Economic Equity, Panam Institute