Wage problem in Bangladesh private sector

:: People’s Time Online ::

The dialogue on living wages has come a long way since the Rana Plaza collapse in Bangladesh that killed more than 1,000 people in 2013, but there will be no solution to the living wage problem until all parties involved work together, a diverse group of panelists agreed at a panel on the topic, held during this year’s session of the Commission on the Status of Women at the United Nations.

In April 2013, an eight-story commercial building called Rana Plaza collapsed in a district of Dhaka, the capital of Bangladesh, leaving 1,100 workers inside the building dead. It was a garment factory that housed 3,122 workers during the collapse, and news stories revealed after the disaster that most of the garments produced there were exported to multinational firms. The workers were barely paid a living wage, an average minimum income necessary to meet their basic daily needs. Living wages vary by country and are generally based on cost of living numbers.

A monthlong search for missing bodies in Rana Plaza caused further outrage and a push for better wages and living standards for garment factory workers in developing countries, where most clothing is produced and most of the work is done by women. The revelations led to countries, development organizations and corporations involved in the garment industry to strive to work together to remedy the situation. Yet it is a deeply complex business with little to no oversight.

“There is now a momentum to work together to recreate the industry, and one of the elements is working together to create a living wage,” said Lilianne Ploumen, the minister for foreign trade and development cooperation of the Netherlands. Her government is now working with Bangladesh, she said.

Ploumen spoke as a panelist at the March 10 UN event, titled “Decent Work for Women: A Case for Living Wages,” along with Dr. Mustafizur Rahman, the Bangladesh deputy permanent representative to the UN; Caroline Wildeman, a moderator from Hivos, a Dutch development organization; Jenny Holdcroft, policy director at IndustriALL Global Union; Ashim Roy, from the Asia Floor Wage alliance; and Pierre Borjesson, a senior sustainability specialist at H&M, the Swedish clothing company. The event was sponsored by the Netherlands and Bangladesh governments and organized by Hivos.

While Ploumen and others congratulated the government of Bangladesh, think tanks, labor unions and international brands like H&M for working together, Roy, whose group focuses on empowering garment workers, seemed the most unimpressed by the efforts so far.

“All this talk has not resulted in an increase in wages,” he said, speaking the most frankly of the panelists.”The reality is that all the efforts have not led to anything. I want to be clear about it. Brands have to take responsibility.”

“I know I am talking with a bit of anger, but this is because I have fought about it for 15 years,” he added.

Roy spoke after Borjesson’s short visual presentation on how H&M was building a sustainable business model to support a living wage. Borjesson said H&M was experimenting with an industry-wide approach using a road map designed by various experts in the field. H&M has set up three model factories that will test what is successful, he said, without going into too much detail. Two of the factories are located in Bangladesh and the other is in Cambodia.

They hope all suppliers will have a functioning pay structure in place that ensures a fair living wage by 2018, he said.
“It won’t be sustainable if only one actor is pushing for it,” Borjesson said. In response to Roy’s comments, Borjesson said that H&M’s chairman, Stefan Persson, had met with Bangladesh’s prime minister, Sheikh Hasina, to discuss an increase in minimum wage and cooperation between companies. (Forbes reported that Persson’s net worth as of 2014 is $34 billion.)

But panelists also acknowledged the complications of enforcing a living wage and what a living wage actually means.

“Agencies and subcontractors really complicate how you make sure people are actually paid,” Holdcroft, the unionist, said.

Borjesson confirmed the difficulty in monitoring wages, and said that while H&M had been operating in Bangladesh since 1984, it does not own a single factory, so subcontractors do all the work.

Roy added that competitive markets delay any possible legislation for a living wage — if one country raises its wages for garment workers, another country, usually in Asia, where most of the business is done, will lower its rates.

“It is unfortunate that everyone has talked about a noble thing, but we haven’t been able to conceptualize and opportunitize it, in terms of money,” Roy said. “The reason is because the moment you try and bargain, the companies will move elsewhere to other countries.”

Panelists also discussed how more women were participating in the labor force than ever before but remained underpaid and overworked.

“The sectors where we have the biggest problem with women is sectors where we have women,” Holdcroft said. Sewing clothes is not unskilled labor, she noted, and encouraged women everywhere, including the ones in the audience, to speak for how much they deserve in their work.

The panelists stressed that 80 percent of people who work in the textile industry are women and suggested that an increase in minimum wage and taking into account inflation could help increase living wages for women.

“Raising the minimum wage across the world will go a long way in producing living wages,” Holdcroft said.

Rahman of Bangladesh agreed, saying, “Better labor standards and better wage help reduce gender inequality.”

And Borjesson suggested an annual wage review system that ensures workers are compensated for inflation — an idea that H&M’s chairman, Persson, put in front of Sheikh Hasina, Borjesson said.

Before the session ended, Atiqul Islam, the president of the Bangladesh Garment Manufacturers and Exporters Association, got on stage and suggested a coalition and joint declaration among all buyers.

“If H&M does this kind of thing, why not have a coalition of this sort for everyone?” he asked.

 

People’s Time/MHR

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