Real minimum wage slides by 5.9pc in Bangladesh in decade: ILO

Moinul Haque | Published: 23:26, Dec 02,2020 | Updated: 23:48, Dec 02,2020


The real minimum wage in the country witnessed a 5.9 per cent decrease among the countries in Asia and the Pacific in the last one decade, according to a new report by the International Labour Organisation. 

It said that the minimum wage in Bangladesh is below the international poverty line and the lowest among the countries in Asia and the Pacific region.

‘The only country in Asia and the Pacific whose minimum wage does not reach even the lowest international poverty line is Bangladesh.

However, the higher rates apply in the export-oriented readymade garment industries in Bangladesh, said the Global Wage Report 2020–21 published on Wednesday.

According to the report, in Asia and the Pacific, the median value of the monthly minimum wage is $381 purchasing power parity per month, with values ranging from $48 PPP in Bangladesh to $2,166 PPP in Australia.

The report said that excepting Bangladesh, the minimum wages in most countries of the region were set between $200 PPP and $800 PPP per month.

The ILO report showed that in Asia and the Pacific, between 2010 and 2019, real minimum wages increased in 22 countries and decreased in 8 countries.

‘The largest decreases in real minimum wages were observed in Bangladesh and Sri Lanka,’ the report said.

The report showed that between 2010 and 2019 real minimum wages decreased by 5.9 per cent in Bangladesh whereas labour productivity increased by 5.8 per cent in the period.

In the region, Bangladesh is one of the few examples where minimum wages are set entirely according to the industries, the report said.

Shahidullah Chowdhury, president of Trade Union Centre, blamed the policy of the government for the low wage of workers.

He said that the government considers low-paid workers as one of the most important business tools for a competitive edge and the ILO report said that the low minimum wages would continue for some more years.

Shahidullah said that both the government and factory owners want to see development through appropriation of workers’ wages.

He also said that the review of the wages in many of the sectors remained pending for more than seven years.

Workers’ wages in Bangladesh did not increase in line with the international standard due to the lack of trade union rights in the private sector, he observed.      

The ILO flagship report also found that monthly wages fell or grew more slowly in the first six months of 2020 due to the COVID-19 outbreak, in two-thirds of countries for which official data was available, and that the crisis is likely to inflict massive downward pressure on wages in the near future.

The wages of women and low-paid workers have been disproportionately affected by the crisis, it said.

The global report showed that the crisis has also affected low-paid workers severely and without temporary subsidies, the lowest paid 50 per cent of workers would lose an estimated 17.3 per cent of their wages.

The growth amid inequality created by the COVID-19 crisis threatened a legacy of poverty and social and economic instability that would be devastating, said ILO director-general Guy Ryder.

‘Our recovery strategy must be human-centred. If we are going to build a better future we must also deal with some uncomfortable questions about why jobs with high social value, like carers and teachers, are very often linked to low pay,’ he said.

Rosalia Vazquez-Alvarez, one of the authors of the report said that adequate minimum wages can protect workers against low pay and reduce inequality.

‘But ensuring that minimum wage policies are effective requires a comprehensive and inclusive package of measures. It means better compliance, extending coverage to more workers, and setting minimum wages at an adequate, up-to-date level that allows people to build a better life for themselves and their families,’ she said.

The Global Wage Report 2020-21 also looked at wage trends in 136 countries in the last four years preceding the pandemic.

It found that global real wage growth fluctuated between 1.6 and 2.2 per cent.

Real wages increased most rapidly in Asia and the Pacific and Eastern Europe and much more slowly in North America and northern, southern and western Europe, it said.

When asked, labour secretary KM Abdus Salam told New Age that it was really excellent that the government had set a permanent minimum wages board to review the minimum wages of the entire industrial sector in every five years.

‘Wages of workers are being increased gradually. Now the readymade garment workers are not low paid. Along with the RMG sector minimum wages of many other sector workers increased significantly in recent time,’ he said.

The labour secretary said that the government introduced a tripartite mechanism by establishing a permanent wage board to fix the reasonable minimum wages for the workers of industrial sectors.  

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