Introduction of the Topic: Pay Plan System of Bangladesh Garments Industry

Introduction of the Topic: Pay Plan System of Bangladesh Garments Industry

Introduction of the topic: Pay plan system of Bangladesh Garments Industry.

Bangladesh, has very recently, escalated to the second position in the list of world's largest exporter of RMG, falling a meager point behind China. There are various reasons why Bangladesh could manufacture such a result, albeit its lack or rather disruption of basic energy providers such as Gas and Electricity. The vertically integrated system of the Garment units has allowed them the benefit of gaining efficient access to the Raw Materials and such. The huge workforce has also been one of the biggest factors which contributed to the growth of this sector in such a rapid pace. In the last 15 odd years, Bangladesh could manage to elevate and spread its wings of RMG export to countries where, it had little or no recognition.

The regulation such as the quota system was been entrusted to the export of RMG in the previous era, but much of the scenario changed when Bangladesh found its key to the International Market Highway by manufacturing good quality products, and which in turn lead the Importers of different nations to gain profit from their sales. Eventually, the relationship with the International Market started to rise to its peak. But the main factor which led Bangladesh to this 2nd position in the World RMG trade, is its labor force which is highly influenced by, comparatively, low wages. The ultimate effect being, the competitors e.g. China, Vietnam, Indonesia, Sri Lanka, Pakistan, India, given hard time. All Bangladesh's competitors have a high wage structure, mainly due to the fact of Literacy rate, standard of living etc. As learnt from articles, and news, wage market is determined by the market forces, but the Minimum wage comes mainly in play when the country has a high literacy rate, and sustaining of an industry is a major issue for the economy.

The pay plan structure of the RMG Sector has been heavily criticized in the recent years by the Human Resource Agencies and various other institutes. RMG sector has been blamed of not providing the actual pay to its workers to even fulfill the basic needs. This issue is very critical and have been dealt with utmost scrutiny by the BGMEA(Bangladesh Garment Manufacturers and Exporters' Association) in the year 2010. Bangladesh was faced with severe worker strikes which would disrupt the normalcy and have managed enforce many manufacturers to shut their plants. The Government along with BGMEA issued a newly legislated labor law for the Garments Industry on the 31st of October. The minimum wage has been set to Taka. 3000 which previously was Taka. 1662.

The increase of the pay scale has also been thoroughly criticized by the Labor Union Parishad as well as the Humanitarian Organizations who repeatedly echoed with the previous cries of "labor wage not meeting the growing cost of living and food". On the other hand, the Manufacturers are placing their reasons as justified enough, and that the increase of the wages still meant a squeezed out profitability, since the International Market is plagued by the repercussions of Financial bubble, along with the high cost of production due to shortage of Electricity and Gas.

The overtime issue has also been regulated by the BGMEA, although majority of the factories are still on the hind side of "on-time" payment schedule. The overtime laws have been enacted since the early 1990's, according to BGMEA, and the body has repeatedly told that the rules are being followed strictly. All being said, we are still faced with the hues and cries of ill commitment from Manufacturers to pay the dues the workers thoroughly deserve.

The new law, APPENDED, is strictly segmented in two categories, one for workers the other for the employees. Two of the 9 rules laid in the newly passed Labor minimum-wage law are:

1. All the workers and employees working in the Garment Industry are to be graded in terms of their workmanship, type of work, education and experience, etc. All workers shall be graded in 7 ways, and all the employees will be graded in 4 ways.

2. In the 2 segmented categories, the minimum wages along with the bonuses have been assigned carefully on a monthly basis.

The remaining information can be found in the Appendix, where the total breakdown of the salary package (Basic + Bonus) is given.

When asked to Ms. Umme Saira, Deputy Secretary(RDTI) Cell, BGMEA, about the contingency for the future restructuring of the current pay plan, she smirked and said, "We are working on the contingency as to how to make the contingency. We are more than certain that we, as a unit, are incapable of handling what's coming in the future due to lack of Skilled,