The impact of Bangladesh’s garment workers’ strike

Subject : Economy

Section: External sector

Context:

One of Bangladesh’s largest labour forces — the 4.4 million-strong ready-made garment (RMG) sector workers are protesting and demanding a trebling of their legally mandated minimum wages from 8,000 Bangladeshi Taka (BDT), or about $72, to 23,000 taka ($208).

What is fast fashion’s significance to Bangladesh’s economy?

Bangladesh is the world’s second-largest exporter of fast fashion, or RMG, after China, accounting for 85% of the country’s export earnings of $55 billion in 2022.
It has a global market share of almost 8%.
The main markets are the U.S., the U.K., Europe and Canada.
H&M is the top importer. Other big brands include Levi’s and Zara.
The 4,000 odd manufacturing facilities in the RMG sector are largely small and medium enterprises (SMEs), mainly employing rural women, and it has been credited with helping the country’s drastic reduction in poverty from 44.2% in 1991 to 5% in 2022 based on the international poverty line of $2.15 a day (using 2017 Purchasing Power Parity exchange rate).
Rising remittances by a growing emigre population is the other factor contributing to the government’s foreign exchange.

Why are the RMG sector workers protesting now?

Bangladesh follows a system of setting minimum wages for each sector of the economy, which is revised every five years.
But, the minimum wage for fast fashion workers has not been updated since 2018.
Also, in recent years, Bangladesh has witnessed steep inflation due to the COVID-19 pandemic and the volatility in oil prices fuelled by the Russia-Ukraine war.
Bangladesh’s foreign exchange reserves have more than halved from a high of $48 billion in 2021 to less than $20 billion.
Several economists, including the Bangladesh Institute of Labour Studies, peg a minimum monthly living wage at BDT 33,368 ($302), for garment workers in a January 2023 report.
The government imposed import curbs that have also affected the functioning of the RMG sector.

Global efforts:

The Berlin-based coalition of “19 garment brands and IndustriALL Global Union”, called Action, Collaboration, Transformation (ACT) has pledged “supporting a living wage in the RMG sector in Bangladesh through the promotion of the conditions to achieve an industry-wide collective bargaining agreement supported by Brands’ purchasing practices”.

Relationship between the RMG sector and carbon emissions:

According to the UN Environment Programme, the fashion industry is responsible for anywhere between 2-8% of global greenhouse gas emissions, making it “one of the largest contributors to the climate and ecological crisis”.
According to the Green Climate Fund,Bangladesh’s RMG facilities are not operating efficiently because of continuous usage of old and badly maintained machines, coupled with poor energy management.
Bangladesh has the maximum number of U.S. Green Building Council-certified RMG factories globally.

The location of the cotton textile industry is mainly affected by:

raw material,
proximity to the market,
moist weather,
capital, skilled and cheap labour,
Transport, sea-port, export facility and the domestic and international markets.

Major textile hubs:

Globally:
- Major cotton textile industrial regions are: India, China (Shanghai), Pakistan, Bangladesh (Dhaka), Japan (Osaka), Egypt, Brazil, the USA (New England region, North Carolina, South Carolina, Georgia, Alabama, Mississippi, Texas and California), and the U.K. (Manchester, Liverpool and Lancashire).

In India:

Source of this article: The Hindu