Bangladesh will raise the minimum wage for the country’s garment workers by 77 percent to 5,300 taka ($68) following a labor dispute that shut factories in the Ashulia industrial zone on the outskirts of the capital Dhaka.
The wage increase will be effective from Dec. 1, Labor Minister Rajiuddin Ahmed Raju said at a media briefing yesterday. The announcement came after workers’ protests that forced about 250 garment factories to close and Prime Minister Sheikh Hasina urged factory owners to accept the pay recommendation made by a government-appointed panel.
Ashulia factories account for 35 percent of Bangladesh’s garment output and supply retailers including Hennes & Mauritz AB (HMB) and Wal-Mart Stores Inc. (WMT:US), according to Abdus Salam Murshedy, president of the Exporters Association of Bangladesh. The South Asian nation has struggled to rebuild its image after the April collapse of the Rana Plaza factory complex killed more than 1,100 people in the country’s worst industrial disaster.
In September, thousands of demonstrators demanding higher wages forced the closure of 400 of the country’s 5,000 clothing factories. The protests reflect the rising labor tensions in Bangladesh, which has the lowest wages in Asia after Myanmar.
Its cheap labor has spawned a $20 billion garment industry, the world’s second largest.
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