NATIONAL WAGE BOARD OFFERS INCREASED MINIMUM WAGE

UNCLAS DHAKA 006299 SIPDIS SIPDIS SENSITIVE E.O. 12958: N/A TAGS: ELAB ETRD PGOV BG SUBJECT: NATIONAL WAGE BOARD OFFERS INCREASED MINIMUM WAGE ¶1. (SBU) On 12 October, the National Wage Board, composed of representatives from labor, government and management, announced what they insisted was the Board's final recommendation to increase the minimum wage for garment workers from 930 to 1,662.50 taka (25 USD) per month. If approved by the GOB, and published in the official gazette, the increased minimum wage would be the first increase since ¶1994. ¶2. (SBU) After the labor violence that started May 22, the GOB acted to resolve worker issues. On 31 May, the GOB created a National Wage Board to recommend a new wage structure, and on June 12, management and labor agreed to a MOU to consider worker demands. At the time, media reported that workers demanded a new minimum wage of 3,000 taka a month. ¶3. (SBU) Both workers and management rejected initial draft National Wage Board increases, which varied from an increase of 1,350 taka to an increase of 2,000 taka. Labor termed the increases saying too small, and management called them too large and would result in factory closures. ¶4. (SBU) In the wake of renewed labor unrest on October 10, Levi's Country Sourcing Manager Ranah George Abraham opined to laboff that the Bangladesh Garment and Manufacturer's Export Association (BGMEA) would probably accept an increase in the 1700 taka range, as would labor, but the increased minimum wage would come at the cost of reduced step increases for more experienced workers. He said that the workers who did participate in the street violence were not part of the labor organizations that participated in the National Wage Board, so they refused to accept its authority. "By and large, workers would be content with some increase and a promise that there would be an annual review for a salary increase," he said. PASI