Solving the RMG wage problem
Even the uncertain situation of 2007 and 2008 has made the situation more dangerous. In 2007, the EU is ending the current quota with China, and in 2008 the US quota agreement is ending. Then we will have to face an even more competitive market, and consequently there is every chance of reduction of CM of garments in the international market one more time. There is little doubt that our garments industry will not have the capability to take the load of increased production costs, the ultimate result of which will be that foreign companies will pack-up for other countries and our local companies will be sitting without work.
Now the problem is from both the sides. We have to save our workers and also our RMG industry. Without analyzing the situation, and going deeply into the problem, anybody may call for mutual understanding of workers and garments owners. But it is not that simple. The root of the problem runs far deeper.
For all latest news, follow The Daily Star's Google News channel. We need the integrated efforts of owners, workers, and the government. Before that, all of us have to realize this from very deep in our hearts, and take an oath to save our garments industry.
The variables are as follows:
- Present market price of essential goods.
- Workers' existing salary.
- Price received from international buyer (CM).
- Productivity (production per person)
- Unit production cost.
Unfortunately, while bargaining with each other, we are talking about the first three points; consequently, there is no solution. But no one is talking about the last two. The wage board recently settled Taka 1662.50 (revised) as minimum wage, which is 78.70% more than the present salary. This increment is unbelievably high, but is still not satisfactory, not enough to survive on. The reason is the unbelievable price hike of essential goods at present, and the low level of the existing salary.
Workers have to survive, and garments owners have to make profit -- this is reality. We cannot go beyond these two basic conditions. Whenever we think, whatever we think, and however we think -- we have to think about satisfying both of the above two basic conditions. By bargaining in the present style, that is by ignoring each others' needs, nobody can come to any solution.
Let us discuss the solution based on the following five variables -- where the role of the government is the major part in this process:
The prices of essential goods and services: These need to be brought to a realistic/logical level, and need to be kept stable. There is no alternative but to do this, if we fail the whole Bangladesh economy is bound to fail. At present, the situation is so bad that every employee is in dire straits. Can anybody think about the situation of the garments workers whose salaries are exceptionally low? If this situation is not rectified the crisis will never end. And, ultimately, our garments industry will be under threat.
Productivity (production per worker): This is the main issue, where there is solution of main conflict. Can anybody imagine what our average productivity level is? It is not above 40%! Some factories are even far below this level. In the long process of bargaining about salary, has anybody said: "Ok, I will pay you this much salary, in return how much production you will give?" Or has anybody from workers' side said: "Ok, I will give you this much production, in return how much you will pay?" It can be fruitful bargaining, and by increasing productivity both owners and workers can preserve their interests.
Productivity is the integrated process of workers and management. First, we need positive attitude of both the parties. The owners can appoint some consultants to re-arrange the whole process in scientific way. They can introduce a standard production organogram and train the management people and workers; introduce computer software to minimize wastage and process loss, smoothen supply of raw materials, and bring transparency and accountability. This is the only way to ensure increased production, and, thus, more benefit for owners and workers.
Introducing high productive-automatic machineries: Owners can reduce the dependency on workers by introducing high productivity automatic machinery, though this is costly, but in the long run it will be beneficial. It will ensure more production, more employment, more benefit. It will also help to attract the attention of buyers in our country. It will open the door for more orders in our country.
Reducing process loss and harassments in government offices: Wherever we have involvement with government offices there is the question of loss of money and time.
Keeping actual data and information: I was talking to a labour leader, and in response to one question he told me that garments owners are making profit five times more than workers' salary. The workers are demanding three times salary. He should have the actual data and then he could calculate how much he should demand. On the other hand, the garments owners should have the information about the basic needs of workers and their lifestyle.
As such, the governments, the garments owners, and the workers should sit together with the factual information and data about current CM of garments in international market, productivity, profit, market price of essential goods, minimum needs of workers, workers' skills and education, and also about the threats and opportunities in our garments industry. Along with this, all the parties have to have respect each other. If this were to happen, I think the solution would not be far away.