The news comes following the collapse of a factory building near Dhaka, which killed more than 1,100 garment workers.
On Monday the government of Bangladesh announced it had agreed to allow the country’s garment workers to form trade unions without first getting permission from factory owners.
The announcement came after an eight-story garment factory building — which housed five different garment factories — collapsed on April 24, killing more than 1,100 people. More than 2,500 people were rescued after the collapse, with the most recent survivor being found last week — 17 days after the building collapsed.
While tragic, the Rana Plaza building collapse spotlighted the lack of regulation and hazardous conditions workers in Bangladesh face. Though Bangladesh is the third-biggest exporter of clothes in the world after China and Italy, many textile factories in the country lack or violate proper safety and working standards.
Bangladesh workers are paid some of the lowest wages in the world, even though many work for global retailers. As a result of government corruption, desperation for jobs and industry indifference, factory workers in Bangladesh earn 3,000 takas or about $38 a month. Though the textile industry is valued around $20 billion, the last time workers saw a pay raise was in 2010.
Clothes for companies including J.C. Penney Co., Benetton, Wal-Mart Stores Inc., and Loblaw Cos.’ Joe Fresh brand were found in the wreckage of the collapsed factory. J.C. Penney and Wal-Mart have said they are phasing out the use of the factories for their clothes, while Loblaw said it intends to expand the scope of its factory audits. Benetton said they had placed a one-time order from the factory, which was completed weeks before the building collapsed.
About 5,000 factories in the country employ 3.6 million garment workers, partly because of a large demand in the U.S. for cheap clothes. Clothing manufacturers once based in the U.S. have outsourced many jobs to less-regulated countries like Bangladesh, in the past two decades to reduce costs for consumers.
“Apparel prices are lower in absolute terms now than they were in the 1990s,” Dean Maki, an economist at Barclays, said.
According to Jessica Tenvose, an economist with the U.S. Bureau of Labor Statistics, which compiles the Consumer Price Index, clothing prices have risen 10 percent since 1990. In that same time period, food prices have increased 82 percent. Tenvose added that if adjusted for inflation, clothing prices would show a decline.
In need of reform
While textile manufacturers used to hire low-wage workers in China, many retail and apparel producers have moved their factories to India, Vietnam, Cambodia and Bangladesh as China’s labor costs have begun to rise.
Government spokesperson Mosharraf Hossain Bhuiyan said the cabinet approved an amendment to a 2006 Labor Act that required workers to obtain permission before they could form a union.
“No such permission from owners is now needed,” Bhuiyan said. “The government is doing it for the welfare of the workers.”
Trade unions have always been legal, but trade union leaders say garment factory owners never allowed them, reasoning that the formation of a union would result in a lack of discipline for workers.
“The issue is not really about making a new law or amending the old one,” said Kalpana Akter of the Bangladesh Center for Workers Solidarity, a group campaigning for garment workers’ rights.
“In the past whenever workers tried to form associations they were subjected to beatings and harassment,” she said. “The owners did not hesitate to fire such workers.”
Unable to form a union has prohibited workers from speaking up about other issues, such as the low pay and safety hazards. Included in the government’s announcement on Monday was that a new minimum wage board had been created and will issue a recommendation regarding pay raises within the next three months. Members of the board include factory owners, workers and the government, according to Bhuiyan.
Depending on how much the minimum wage rises in the nation, Western retailers may take their business elsewhere, though some may absorb the cost, which is what happened in 2011 when the price of cotton dramatically increased.