Why Workers’ Wages Are a Worry in Bangladesh

Yesterday, Bangladesh responded to garment factory worker protests with a hike in the monthly minimum wage. Moving up from $75 to $113, workers received a 56 percent increase that begins on December 1. Much more, the workers’ goal was $208 while the employers’ association offered $90.

You can see below, in two Statista graphics, how the past Bangladeshi wage compared to other garment exporters.

Garment Worker Wages

As an “ultracheap” garment industry exporter, Bangladesh’s output is second only to China. But, even with yesterday’s raise and an H&M wage of $134, still Bangladesh is near the bottom:

Adding Turkey to the top and plunging down to Ethiopia, we can also use this Statista graphic with 2019 data. Although exchange rates and China’s regions vary, the graphic gives us an accurate impression of the wage landscape:

Our Bottom Line: Tradeoffs

When the Rana Plaza collapsed on April 24, 2013, more than 1,100 workers were killed and 2,500 were injured. Although they immediately demonstrated concern, Bangladesh’s multinational customers like Zara, Mango, and Benetton hesitated when it came to spending more. Concerned about reputation, some switched to other countries like Morocco and Turkey. However, they also saw that, shopping at Zara or Carrefour, price conscious consumers did not avoid “Made in Bangladesh” labels.

Employing millions of workers in thousands of factories, Bangladesh’s producers don’t want to lose business to lower cost countries. After all, fast fashion was one reason that Bangladesh moved up to lower middle income status. Still though, as one local suppliers group explained, “Every time we ask for even 1 cent [more] from the buyer, it is very difficult to get their support,”

And, adding to the cost pressure on first generation fast fashion, we now have “ultrafast” and cheap social media brands like Shein.

My sources and more: Thanks to my go-to podcast for trade issues–Trade Talks-– for the Rana Plaza insight and for the link to this paper. Meanwhile, for a fast fashion update, FT and US News and WSJ had the most recent facts.

Please note that our featured image, from WSJ, was an Anik Rahman Bloomberg News photo.