Bangladeshi Wage Protests Have Erupted, With Over 300 Clothing Factories Closed

Starting from the end of October, there have been several consecutive days of protests by workers in the textile industry demanding a significant salary increase in the capital and core industrial areas of Bangladesh. This trend has also sparked discussions about the clothing industry’s long-term high reliance on cheap labor.

The background of the entire matter is that as the world’s second largest textile exporter after China, Bangladesh has approximately 3500 clothing factories and employs nearly 4 million workers. In order to meet the needs of well-known brands around the world, textile workers often need to work overtime, but the minimum wage they can receive is only 8300 Bangladesh Taka/month, which is approximately 550 RMB or 75 US dollars.

At least 300 factories have been closed

Faced with sustained inflation of nearly 10% over the past year, textile workers in Bangladesh are discussing new minimum wage standards with the textile industry’s business owners’ associations. The latest demand from workers is to nearly triple the minimum wage standard to 20390 Taka, but business owners have only proposed a 25% increase to 10400 Taka, making the situation even more tense.

The police stated that at least 300 factories were closed during the week-long demonstration. So far, the protests have resulted in the deaths of two workers and dozens of injuries.

A clothing employee union leader stated last Friday that Levi’s and H&M are the top global clothing brands that have experienced production stoppages in Bangladesh.

Dozens of factories have been looted by striking workers, and hundreds more have been closed by homeowners to avoid intentional damage. Kalpona Akter, Chairman of the Bangladesh Federation of Clothing and Industrial Workers (BGIWF), told Agence France Presse that the discontinued factories include “many larger factories in the country that produce clothing for almost all major Western brands and retailers”.

She added: “Brands include Gap, Wal Mart, H&M, Zara, Inditex, Bestseller, Levi’s, Marks and Spencer, Primary and Aldi.”

A spokesperson for Primark stated that the Dublin based fast fashion retailer “has not experienced any disruption to our supply chain”.

The spokesperson added, “We are still in contact with our suppliers, some of whom have temporarily closed their factories during this period.” The manufacturers who suffered damage during this event do not want to disclose the brand names they collaborated with, fearing losing buyer orders.

Serious differences between labor and management

In response to the increasingly fierce situation, Faruque Hassan, the chairman of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), also lamented the industry’s situation: supporting the demand for such a significant salary increase for Bangladeshi workers means that Western clothing brands need to increase their order prices. Although these brands openly claim to support workers’ salary increases, in reality, they threaten to transfer orders to other countries when costs rise.

At the end of September this year, Hassan wrote to the American Apparel and Footwear Association, hoping that they would come forward and persuade major brands to increase the prices of clothing orders. He wrote in the letter, “This is very important for a smoother transition to the new wage standards. Bangladesh’s factories are facing a situation of weak global demand and are in a nightmare like ‘situation’

At present, the Bangladesh Minimum Wage Commission is coordinating with all parties involved, and the quotes from business owners are also considered “impractical” by the government. But factory owners also argue that if the minimum wage requirement for workers exceeds 20000 Taka is met, Bangladesh will lose its competitive advantage.

As the business model of the “fast fashion” industry, major brands compete to provide consumers with a low price foundation, rooted in the low income of workers in Asian exporting countries. Brands will pressure factories to offer lower prices, which will ultimately be reflected in workers’ wages. As one of the world’s major textile exporting countries, Bangladesh, with the lowest wages for workers, is facing a full-scale outbreak of contradictions.

How do Western giants respond?

Faced with the demands of Bangladeshi textile workers, some well-known brands have also made official responses.

A spokesperson for H&M stated that the company supports the introduction of a new minimum wage to cover the living expenses of workers and their families. The spokesperson declined to comment on whether H&M will increase order prices to support salary increases, but pointed out that the company has a mechanism in procurement practice that allows processing plants to increase prices to reflect wage increases.

A spokesperson for Zara’s parent company Inditex stated that the company has recently issued a public statement promising to support workers in its supply chain in meeting their livelihood wages.

According to the documents provided by H&M, there are approximately 600000 Bangladeshi workers in the entire H&M supply chain in 2022, with an average monthly wage of $134, far above the minimum standard in Bangladesh. However, compared horizontally, Cambodian workers in the H&M supply chain can earn an average of $293 a month. From the perspective of per capita GDP, Bangladesh is significantly higher than Cambodia.

In addition, H&M’s wages to Indian workers are slightly 10% higher than those of Bangladeshi workers, but H&M also purchases significantly more clothing from Bangladesh than from India and Cambodia.

German shoe and clothing brand Puma also mentioned in its 2022 annual report that the salary paid to Bangladeshi workers is much higher than the minimum benchmark, but this number is only 70% of the “local living wage benchmark” defined by third-party organizations (a benchmark where wages are sufficient to provide workers with a decent living standard for themselves and their families). The workers working for Puma in Cambodia and Vietnam receive income that meets the local living wage benchmark.

Puma also stated in a statement that it is very important to jointly address the salary issue, as this challenge cannot be solved by a single brand. Puma also stated that many major suppliers in Bangladesh have policies to ensure that workers’ income meets household needs, but the company still has “many things to pay attention to” in order to translate its policies into further action

Bangladesh’s clothing industry has had a lot of “black history” in its development process. The most well-known one is the collapse of a building in the Sava district in 2013, where multiple clothing factories continued to demand workers to work after receiving a government warning of “cracks in the building” and told them that there were no safety issues. This incident ultimately resulted in 1134 deaths and prompted international brands to focus on improving the local work environment while enjoying low prices.

Post time: Nov-15-2023