Labor unrest in Clothing Industry: Reasons and Solution

Clothing industry is one of the most labor-intensive sectors in the world. The industry is most laborintensive sector in Bangladesh due to very less use of technology. This industry is the backbone of our export economy, which in turn is supported by more than 3 million workers. Being an integral part of the industry, labors deserve to get higher consideration by the manufacturers. Unfortunately, the manufacturers cannot take their matters into priority; resulted in present unrest. Frequent labor unrest in clothing manufacturing sector; strikes by labors & their unions; has become common in Bangladesh. Most obvious reason for the unrest is wages & increments up to a level, which could help them to live a minimal life. Is it legal demand of the labors or labor unions to raise their monthly wages from Tk.1600 (US$ 25) to Tk.5000 (US$ 70)? In fact with the high inflation in food and energy price, it is getting difficult for the workers to live with the present lowest monthly wage of Tk.1600. Most of the owners of the clothing factories can realize the reality, but they are unable to increase the wages as demanded by the labor unions. They are not making such a high profit to meet their demands. Could minimum wage announcement by Wage Board of Bangladesh solve the labor unrest in Bangladesh? I doubt because; if the Wage Board announces minimum wage more than present limit, then present clothing industry might get one big shock, which could lead the clothing industry of our country in the verge of destruction. There could be few possible outcomes, following implementation of the announcement. The first one is the premium organizations of the sector; namely BGMEA and BKMEA; can ask the government for monetary stimulus package to full fill higher wages. Other most likely consequent is permanent stoppage of the clothing factories. Apart from this, wage increment might lead to market inflation, especially in food. Therefore, we should go thorough diagnostic consideration to find out hidden problems, and possible solutions to save our billion dollar clothing industry: Bangladesh enjoys the lowest wages in clothing sector in the world, but cost of living has been increasing gradually; most likely at significantly higher rate in the world. Thus; demand of increasing monthly wages is obvious, creating labor unrest. The second factor is wages discrimination; e,g toplevel employees draw more than 100 times monthly salaries than low-level employees, plus other companys benefits in the hierarchy. This in turn develops non-motivation among the fellow workers; create jealousness among them, consequently less productivity of worker by unrest in the production environment. A successful organizations practice few common formulas to reduce discrimination of salaries or wages. By reading the mind of the most employees and workers, a factory creates hierarchical organogram where wages discrimination is not visible. As; in those cases; some top and mid-level employees are more efficient in their respective job fields, so they deserve higher salaries. Thus, the owners keep personal contact with those employees, and pay them cash incentive secretly. Other reasons for the labors non-satisfaction may be other mismanagement of the industry, resulting in frequent unrest of workers; like fire security, fraction salary payment, zero payments for over time,

no festival bonus, and lay off of factories without prior announcement. Some experts of the sector believe; internal political environment, national or international politics; like creating labor unions; industry waste or Jhoot trading issues etc, are also contributing in unrest. I like to recall about steady destruction of our labor market in mid-east countries. Compatriots of India and Pakistan using mass media has tried several times to destroy images of Bangladeshi workers, in order to keep their labor demands higher there. Visiting clothing factories personally experienced me that there are some distorted minded workers, especially boy workers (aged 17 to 25) in almost all clothing factories who miss lead other workers to strike to enjoy break and check their influences in the existing environment. Workers wage comes from the income, including expected profit, an individual factory earns. Our clothing sector is still disorganized even after more than three decades of the commencement. During this long run; this national industry loses its competitiveness in profit, despite of having no core competence. The reasons can be identified as due diligence of the government and industry owners towards our competitors; thereby international clothing buyers. As a result; the buyers who are educationally sound and master in business strategy, are using our strengths; like cash incentive from government, GSP facilities from the USA and European Union; as our weaknesses. Consequently, the buyers are gaining in price bargaining of clothing orders! Clothing factories collect orders in two general ways- one is direct contact with the international clothing buyers, and the other is through middle men or buying houses. To work directly with buyers, the factory need efficient, well converse, and effectively communicative team in the top management-level. But most of the clothing factories failed to build up such a good team, thus those factories ask the middle-men/buying houses to work for them- which I describe as indirect way. The direct way of working with buyers is always better than working with the help of middle-men as the factories could save the commission of the middle-men. The commission accounts about 10% of total working value; ejection of which in turn could increase profit of the factories. Apart from this, the factories get ensured of the having regular working order from the respective buyers. Because of the mentioned weaknesses of Industry Owners; buyers are interested to place orders through their liaison offices or buying houses. Buying houses could read the buyers mind; regarding their demand of product quality, consistency and lead-time. As the middlemen are playing leading role in export by gaining commission; the profit margin or income of the industry falls. In addition, Power and gas crisis; hampering production; are among many other reasons, indirectly manipulating profit of clothing industries. Lack of managerial skills of the top-management in clothing factories causes in failing on-time shipment and thus rejection of orders from buyers, are one among many reasons which affect profit margin of the factories. High labor fluctuation does affect the productivity. The productivity of individual labor in clothing sector is one of the lowest in the world, as no concept of labor training exists here. This results into lack of workers motivational in the respective factories. The latter matter is the best example of managerial weakness. We can sum up the main reasons for minimal profit in the clothing industry as: 1)due diligence of our humble people to the buyers, 2) presence of commission of middlemen or buying agents, 3) shortage of power and gas utilities in the industry, 4) higher labor fluctuation, untrained labors, lower

productivity of individual labor; resulted from managerial weakness; 5) seasonal natural disasters, 6) volatile and unpredictable backward linkage markets. Now question is: how the industry creates higher revenues; that means expected profit; to full fill higher wages demands? I already have pointed out some above-mentioned hurdles and appropriate measures against those hurdles must ensure higher revenues. One of the accurate measures is to develop potential in the sector, through restructuring the industry. At the factory level, the top and mid-level management need not to be well conversed and communicative only, with their respected buyers. But they should also gain expertise in understanding the needs and demands of their labors. And accordingly take initiative to satisfy them. It is comparatively better to have due-diligence with their workers than the buyers. We can restructure individual factorys hierarchical structure; including labors training and create an environment; making labors feel as they are part of the management. Such an approach may result in decreasing labor strife, increase productivity of each labor, thus higher turnover. Factory owners should avoid hard-line policy and have to have patient and listen to labors as well. To cover up with power and gas supply, the clothing industrys premium bodies like BGMEA, and BKMEA, should come up with actually regular demands of power and gas in the industry as well as proposed ways to fight the problems. As the crisis is a national problem; the BGMEA and BKMEA would have to come up with any alternative or innovative way. The sector is lagging behind in training of its stakeholders. There is no established training institute in the country to train their top-level, mid-level, and low-level managements. Training makes human resource efficient; makes business competitive, and creates core competences in complete supply chain. Industrial management knowledge is most important for top and mid-level employees while proper operations of machines by operators are crucial for operators productivity. Regular basis training in Training Institutes can ensures both better industrial management environment and higher productivity. Higher productivity means high revenues, thus profits, which in turn could ensure better wages. Thus training significantly contributes to controlling Labor Unrest! In my summery, we need a common platform for owners and labors, where both parties raise their problems, and therefore find instant better solutions. The platform should be consisted not only with owners and labors representatives, but also experts from research organizations (like CPD, BIDS) should be included for better performance of the platform. Government with the consultation of respective stakeholders of the industry should create Textile and Clothing Police; like Bangladesh Railway Police to protect railway sector of the country; to tackle unrest in the sectors, if any. The clothing sector is not much less important for the nation than the Railway one! According to me, Identification of real garment workers and picketers during unrests is very difficult, as there is no way to create identity of each and individual worker. Therefore, registering their names and issuing them ID cards have become essential. Establishment of an organization to issue ID card is getting important for our T&C sectors future prospects and faster growth. Issuing ID cards or ID numbers to garment labors, would help in many aspects like food rationing, counting number of garments workers in the sector, finding out life details in case of labors death, or labor criminal activities. It could be a step ahead in organizing the Textile & Clothing sectors.

Personally we dont believe that only wages issue creates labor unrest, and therefore increasing demanded wages will not help to stop frequent labor unrest in the industry. We believe that labor unrest is the final explosion created by uncountable mistakes, misbehavior, mismanagement, and over exploitation of labors by authority. Following table includes Reasons and Proposed Solutions on my Part

Reasons for Labor Unrest Low wages Higher wages discrimination/gap organizational hierarchy in

Lack of compliance (no weekly day off, no festival bonus, compulsory over-time, but fraction payment or no payment) No responsible organizations who will listen labors needs and demands

Proposed Solutions Control food and power abnormal inflation; readjust wages Restructure factory hierarchy organogram; provide incentive to deserving employees but keeping salary indiscriminate level Ensure social and environmental compliances in the clothing-manufacturing sector. A neutral organization to be formed (taking members from BKMEA, BGMEA, labors unions, and government employee from labor ministry) who listen them. Train labors techniques how to save themselves; construct production plant accordingly; keep contractual agreement with nearest doctors in the locality, in case of unable to ensure 24 hours doctor. In case of recruiting boys/males, scrutinize them properly. Needs to formulate garment police to tackle such occurrences (like Railway Police to guard Bangladesh Railway) In such cases, government and media could play vital role. They should go depth in the matter, and thus broadcast real pictures (hidden cases)

Death of any garment labors in the factory premises, could be by fire-smoke, electrified and labor pain for pregnant women

Distorted minded boys/males labors create havoc of unrest to press their illegal demands Local influential (could be mastans) trading of garment wastes/jhoot, sometimes creates unwanted unrest in the clothing manufacturing areas. Some believe international politics willingly creates labor unrest, thus intentionally spread the news of labor unrest in the industry to take unprivileged advantages.