Wage scenario of the local RMG workers in Bangladesh

Research & Study

Wage Scenario of the Local RMG Workers in Bangladesh

June, 2018

The Bangladesh Labour Foundation has commissioned a study to analyze the wage situation of local Ready-Made Garment (RMG) workers. The study compares wages in local and export-oriented RMG industries, assesses the cost of living, and recommends fair wage levels. The findings aim to inform policy changes, promote labor rights, and ensure fair wages for local RMG workers. The report provides a roadmap for industry stakeholders to improve working conditions and overall well-being.

Key Words: Wage, LRMG, Decent Life, Operator, Piece Rate.

Background

The Ready-Made Garment (RMG) industry in Bangladesh began in the late 1970s and rapidly expanded in the 1980s due to favorable government policies, low labor costs, and global trade opportunities. By the 1990s, it became the country’s dominant export sector, employing millions, particularly women. While the export-oriented RMG sector has received considerable attention, local garment industries, which employ a significant number of workers, often operate informally without proper regulations. The study aimed to compare wages in the local RMG sector with those in export-oriented factories and to recommend fair wage levels for local RMG workers.

Objectives

To know the comparative wage scenario of the RMG workers both at export oriented RMG industries and RMG industries for the local market.
To know the present living expenditure and expected cost living for a decent living of the local RMG workers in Bangladesh.
To analyze the wage of local RMG workers in the perspective of current economic conditions of Bangladesh, especially in terms of inflation, GDP, and per capita income.
To recommend a wage amount for local RMG workers to ensure their decent life.

Key Findings

Local RMG factories lack a standardized wage system, and most workers are paid on a piece-rate basis, without written contracts or fixed salaries.
Low Wages & Long Working Hours: Workers in local RMG factories earn significantly lower wages compared to export-oriented RMG workers. The average wage for an operator in local RMG industries is around Tk. 9,350, whereas in export-oriented industries, it is Tk. 12,038.
Workers in local RMG factories do not enjoy benefits such as paid leave, festival bonuses, maternity leave, or overtime payments, which are mandatory in export-oriented factories.
While there is no official discrimination, female workers often earn less than male workers due to fewer working hours and lower productivity in piece-rate payment systems.
A significant portion of the workforce consists of apprentices and child workers who receive little or no wages but only food and lodging.

Recommendations

Recognize local RMG factories as a formal industry and enforce legal protections for workers.
Revise labor laws to align with international labor standards and establish a local living wage benchmark.
Implement a monitoring system to ensure wage compliance and eliminate wage gaps between male and female workers.
Establish a standardized wage system to provide workers with fair earnings.
Improve working conditions by providing paid leave, festival bonuses, and proper contracts.

The study highlights the stark wage disparity and lack of labor protections for workers in local RMG industries. A minimum wage of Tk. 10,000 is recommended to ensure workers can meet their basic needs. Implementing these recommendations requires coordinated efforts from the government, industry owners, and civil society to formalize the local RMG sector and improve workers’ living conditions.