RMG SACTOR IN BD AND ITS MINIMUM WAGE

RMG SACTOR IN BD AND ITS MINIMUM WAGE

• 1.
  Welcome to my presentation Name:sudipta saha Id: 13-24730-2
• 2.
  My topic is MinimumWage laws in Rmg sector in Bangladesh
• 3.
  Definitionon of MinimumWage The minimum wage is defined in this study as a wage that is sufficient to meet the basic needs of a worker and his/her family, and provide some discretionary income. Conceptually basic needs mean more than the necessities of life - food, clothing and shelter.13 Additional elements used in the definitionon of basic needs are clean water, healthcare, childcare, transportation, education, energy and
• 4.
  some discretioonary incomeor savings.14 In other words, basic needs are not simply the nutritional and non- nutritional requirements at ‘poverty level’; rather it means requirements higher than that level. Different nutritional requirements of male, female and children in the family need to be taken into account while estimating the minimum wage for workers.
• 5.
  MINIMUM WAGE INTHE RMG SECTOR OF BANGLADESH: RULES, REGULATIONS AND PRACTICES • Rules and Regulations regarding Minimum • The setting of the minimum wage is an important policy instrument that can contribute to the socioeconomic • well being of workers in various sectors. The term minimum wage is, however, not defined • in the Bangladeshi Labour Act 20067, nor in the Amended Labour Act 2013.8 Yet, an article in the Wage
• 6.
  Structure of MinimumWage Although the minimum wage is conceptually to be set at a level which covers the basic needs of the lowest earned workers on the job-ladder, i.e. entry-level workers (grade 7 workers in case of the RMG sector in Bangladesh), the prac􀆟ce in the country is that revision has been taking place for workers of all grades (grades 1 to 7). In that way, it is a fixa􀆟on of structure of wages of different grades instead of se􀆟ng minimum wages. According to the last revision of the minimum wages, grade 7 workers should receive a wage of Tk. 3,000 per month of which Tk. 2,000 as basic, Tk. 800 as house rent (40 per cent of the basic) and Tk. 200 as medical allowances. However, an ‘informal’ grade below grade 7 has been introduced during the last revision of minimum wage in 2010 under the job 􀆟tle ‘trainee’. These temporary workers receive a lump sum of Tk. 2,500 per month.
• 7.
  During the last revision,minimum wage for entry-level workers (grade 7) increased by 80 per cent, but a similar level of rise did not take place for workers in other grades (grades 3, 4, 5 and 6). The rela􀆟onship between wage level and seniority (skill plus experience) was not reflected in the structure as evidenced by the low differen􀆟als between these grades – Tk. 322, Tk. 231, Tk. 308 and Tk. 357 respec􀆟vely (Table 2). In other words, the minimum wage structure per se in the RMG sector provides li􀆟le incen􀆟ve for long-term workers of a same factory. This can be done through factory-based loyalty incen􀆟 ves. Thus, at present, there is a high labour turnover within the RMG sector as workers seek the best remunera􀆟on package for themselves. Some companies have been introducing informal sub- grades, for example, A, B, C and D with a view to recognising and remunera􀆟ng different skills levels. This sub-grouping is confusing, and appears to be a bo􀆟leneck at certain grades for upward mobilisa􀆟 on of workers from one grade to the next.
• 8.
  Current Minimum WageStructure Grade and Main Posts Basic House Rent (40% of Basic) Medical Allowance Net Salary Grade 1: Pa􀆩ern Master, Chief Quality Controller Tk. 6,500 Tk. 2,600 Tk. 200 Tk. 9,300 Grade 2: Mechanic, Electrician, Cu􀆩ng Master Tk. 5,000 Tk. 2,000 Tk. 200 Tk. 7,200 Grade 3: Sample Machinist, Senior Machine Operator Tk. 2,870 Tk . 1,148 Tk 200 Tk .. 4,218 Grade 4: Sewing Machine Operator, Quality Inspector, Cu􀆩er, Packer, Line Leader Tk. 2,615 Tk . 1,046 Tk . 200 Tk . 3,861 Grade 5: Junior Machine Operator, Junior Cu􀆩er, Junior Marker Tk. 2,395 Tk . 958 Tk . 200 Tk. 3,553 Grade 6: Operator of General Sewing/Bu􀆩on Machine Tk. 2,230 Tk . 892 Tk . 200 Tk 3. 3,32 Grade 7: Assistant Sewing Machine Operator, Assistant Dry Washing Man, Line Iron Man Tk. 2,000 Tk. 800 Tk . 200 Tk . 3,000 Trainee Tk. 2,500 Source: Adapted