Minimum Wage Impact on RMG Sector of Bangladesh: Prospects, Opportunities and Challenges of New Payout Structure

Abstract

Strike and labor unrest is very much common for the Readymade Garments (RMG) sector of Bangladesh. Most of them are basically for payment related issue like irregular wage payment practice of the garment factories owners and significant lag time of wage payment to the workers. With a view to maintaining stability in RMG sector, Ministry of Labor and Employment published new wage structure specially for the RMG sector in November 2018. Though new payout structure has been approved the effective implementation has become a great challenge for the governmental or regulatory authority as more than 50 percent increment in the lower graded workforce gross payout generates expectation gap of the owners of the RMG factories regarding the passion and value generating activities of the lower graded or minimum payout holder working force. High turnover in lower graded labor force and lack of working dedication generates reluctance of the owners to implement new payout structure of RMG sectors. However early stage patience and passion for working in RMG sector may gift a better career growth for the new workforce. Results have also justified the affiliation of a number of factors that may get influenced for the implementation of new minimum wage payout in the RMG sector.