Internship Report On

Employees Job Satisfaction of Garments Industry in Bangladesh: Current Salary Structure

Submitted To:
DR. Abul kalam Azad Assistance Professor, Department of Marketing University of Dhaka, Dhaka -1000

Submitted By:
Md. Mukhlasur Rahman Chowdhury Roll NO (BBA):110 Department of Marketing University of Dhaka, Dhaka -1000

Preface

Date of submission: 4/12/2010

Theoretical and practical knowledge does not direction. Theory differs in a great way from its operation .There is no doubt that to justify the theoretical knowledge practical orientation has great importance. An Internship program brings the students closer to the practical world. This realization of

the universities has introduced the system & provision of Internship program for the students of BBA for better understanding and realization with the practicaljob environment.

The internship program has given us immense opportunity to minimize the gap between theoretical and practical knowledge. As a BBA student, it was my great pleasure to be in touch with the most potential sector namely ready made garment (RMG) sector or Garment sector which is the biggest and most potential sector of our country. My practical experience through performing different activities, and to keep inform about problem and prospect of this industry has enhanced our view, mission and acceptability as well as has increased our overall experience about to deal in real world phenomenon.

Letter of Transmittal
December, 4, 2010 DR. Abul
kalam Azad

Assistance Professor, Department of Marketing University of Dhaka, Dhaka -1000

Subject: Submission of Internship Report.

Sir, Here is the Internship Report you assigned me on Employees Job Satisfaction of Garments Industry in Bangladesh: Current Salary Structure. In the preparation of this formal report is of a great expectation in our B.B.A program and I am quite happy to submit it duly applying all that I t hink should have to be included and which should not to be included. It was a great experience for me and through I am learnt much. If I was not asked to submit this report it might be like that I am going out of my program without having something so much importance for my life and so much practical. I also have learned that I have to study more and more to get in the real world of knowledge.

Finally, thank you for your supportive thought and kind consideration for formulating an idea and developing the structure of the report.

Sincerely yours Md.Mukhlasur Rahman Chowdhury

Signature

'RoCCNO (BB^):IIO

flc^nowCedgement

It is my great privilege to express our gratitude to DR. Abul Kalm Azad, my superviser, for such great opportunity to be in touch with Garment industry for the following days. I also have to put my heartened feelings and gratitude for the kindness and assistance that was provided to me to complete my assigned report as on the topic Employees Job Satisfaction of Garments Industry in Bangladesh: Current Salary Structure In preparing the proposed report I have taken great assistance support and guidance from the persons of several Garment factories.

I express my heart full thanks to all the persons who help to provide the necessary information to prepare the report especially to Md. Ataur Rahman Mridha, Proprietor of ABA GARMENTS, Rana Ghosh, M.D ofAJAX SWEATERS LTD, M.A. Jalil, M.D. ofAJI APPARELS INDUSTRY LTD, Md. Shamsul Alam, M.D. ofAKH FASHIONS LTD, M.Anwarul Azim, Chairman of A.B.M APPARELS LTD, Md. Mostofa Kamal, Director of A.K.J. FASHIONS FABRICS LTD, Md. Nurul Islam, M.D. of A.N. GARMENTS LTD, A.B.M. Fazlul Karim of A.Q.M. APPARELS (PVT) LTD and garment workers. We also like to thank all the other employees of all level for their beloved manner and attitude that they had shown to us during the staying in the organization.

Sincerely yours Md.Mukhlasur Rahman Chowdhury

Signature

RoCCNO (BB^):HO

EXECUTIVE SUMMARY

Bangladesh has now around 4,500 garment factories which employ over 3.5 million workers. The minimum monthly wage of a garment worker was 1,662 taka (about $24) a month. The garment industry accounts for about 40% of Bangladeshs total industrial workforce. The garments sector witnessed recurring violence in Bangladesh. In recent times (June-July 2010), strings of incidence had taken place. Some incidents have paralyzed the whole Dhaka city. The workers took street, Police violently swooped on them, water canon, rubber bullets and baton charges could not stop the workers from staging spontaneous demonstration. Government announces new six graded salary structure after long term struggle where the minimum salary 3000 taka against the workers demand minimum wage 5000 taka. A survey released last month by the Bangladesh Factory Inspection Department which showed that almost 15 % of employers did not pay their workers on time between January and May. Many other factory owners did not pay overtime, while several continued to pay less than the governments minimum wage. My aim of the study was to measure the degree ofjob satisfaction and living standard of garment workers after announcing the new salary structure for the garment workers. I have focused on Job satisfaction depends on the payment of Basic salary, Overtime, Bonus, Pension and well consideration of Maternity leave, Job security, delay payment, working environment of any garment factory. After the analysis of the factors, it is clearly reflected that most of the garment workers are not satisfied their wage compared to the current job. I have also focused on Living standard depends on the payment of Medical allowance, Accommodation allowance, Transportation fee, cost of living and all other factors related to conduct life smoothly. From the statistical analysis, it is noticeable that the living standard correlated to the mentions factors. Majority of test units think that amount of payment are insufficient to meet the need of workers. Government should interfere of the matter considering the global competition and employees demand.

Employees Job Satisfaction of Garments Industry in Bangladesh: Structure

Introduction:
In Bangladesh, Ready Made Garments (RMG) sector has been playing a crucial role for the last several years. The impact this sector is creating on our economy is acceding the role of agricultural sector over time. But it is a matter of regret that our RMG industry has been plagued by agitation by the workers for settlement of minimum wages, benefits and better working conditions for the last few months. However, in recent years, the Ready -Made Garments (RMG) sector has emerged as the biggest earner of foreign currency. The RMG sector has experienced an exponential growth since the 1980s. This garment industry of Bangladesh has been the key export division and a main source of foreign exchange for the last 25 years (Bhattacharya, D and M. Rahman: 2003). By definition, labor is the workforce of an economy and it is called the Human Capital of an economy. Labor or human resource is available and ubiquitous in our country, as our country is one of the densely populated countries in the world. Also it is one of the poorest countries in the world. As a matter of fact labor is ultimately cheap here. In this industry, the labor forces are the garments workers. Although these workers are not facing acute crisis of financial conditions like, rickshaw pullers or sweepers but they are not well enough too. They have to give a lot of labor and spend much time in the factories. On the other hand, the cost underling labor is Wage and Minimum Wage is the lowest price for labor that any employer may pay. Minimum National Wage is the nationally specified wage structure and any labor cannot be paid below this structure. It is a law to protect the rights of workers in job market. Specific working hours and minimum wage are the result of the laborers century long struggle. At present, the country generates about $5 billion worth of products each year by exporting garment. The industry provides employment to about 3.5 million workers of whom 90% are women. RMG sector provide huge employment to the unemployed, unskilled and semi-skilled boys and girls but the payment is very low (Grasmuck, S. and Grosfoguel, R., 2009). The industrys monthly minimum wage was last raised after the mass revolt of 2006. The increase, to Taka 1,662[15/$23/18], was already inadequate - and since then inflation of basic foodstuffs has risen over 70%. While workers were demanding Tk 5,000[45/$71/54], the final offer from the tripartite negotiations between government, the employers federation BGMEA and a minority of claimed labor representatives (Islam, Sadequl: 2010). According to the new wage structure workers are divided into six grades. The minimum salary of the entry level is 3000 taka per month (Murshedy, A. S.:2010).

Current

Salary

Problem Definition:

The garments sector witnessed recurring violence in Bangladesh. In recent times strings of incidence had taken place. Some incidents have paralyzed the whole Dhaka city. The workers took street. Police

violently swooped on them, water canon, rubber bullets and baton charges could not stop the workers from staging spontaneous demonstration. Rising food and essentials prices are making the garment workers plight worse. The low wages have a disastrous effect on workers livelihoods. The workers especially women are struggling to feed themselves and their kids, and their anger is boiling over. Generally in Bangladesh, the major reasons of sudden outburst, against the backdrop of accumulated anger and immeasurable plight of the workers, are directly linked to low wage, unpaid wages and overtime Low wage, irregular pay and sudden closure of the factory without any prior notification compel the workers to take the street. Sometimes there is a notice in the gate that inform the workers that the factory is closed until again notice which stops the earning source of workers and compel workers to unusual combat. Bangladesh wage board declares new wage structure after several meetings with labor representatives and factory owners. Garment workers get new wage structure after a long struggle. The purpose of the study is to determine the job satisfaction of garment workers after implementing the new wage structure and to measure the living standard of workers.

Conceptual Frame Work:

Readymade garments and textile sector, which earns huge amount of foreign currency for Bangladesh every year is now under acute crisis following labor unrest, mostly instigated by the deprivation of basic needs. On June 21, 2010, leaders of Bangladesh Garments Manufacturers and Exporters Association (BGMEA) decided to shut down 300 factories at Ashulia export processing zone area, following days long labor agitation and destructive acts. According to experts, such closure for indefinite period will put the entire export trade of Bangladesh from textile and RMG sector into huge risk, as many of the exporters will fail to ship their consignments to prospective buyers on time. This paper seeks to the core reasons of struggle of garment employees against factories owner to gain the appropriate salary structure. The major reasons of sudden outburst, against the backdrop of accumulated anger and immeasurable plight of the workers, are directly linked to low wage, unpaid wages and overtime. Low wage, irregular pay and sudden closure of the factory without any prior notification compel the workers to take the street. When Wage Board is haggling over the fixation of minimum wage and the owners volubly and vehemently opposes it. This paper is used several variables to measure the job satisfaction of garment workers. Standard of living is also considered to seek the reasonable demand of workers. Several variables such as basic salary, payment delay, overtime, Eid bonus, Festival allowance, annual leave, are used to measure job satisfaction of an employee. Several factors related to job satisfaction are accommodation allowance, Pension, Transportation allowance, Medical allowance, cost of living and profit sharing considered. In case of female workers maternity leave, child care, are also considerable.

Figure 1.1 Represents Job satisfaction depending variables

Source: own source Job security of garment employees is uncertain. The job of an employee depends on the will of owner. An owner can discard the job of an employee without any notice or within very short notice. Every day price of daily necessities is escalated and the rate of inflation is also soaring so people need extra money to lead normal life. In this position the garment labors are hard heat to survival. The living condition of workers is miserable. So many people live in a small house as like a cramped situation because of crisis many or save many to eat. , Eid bonus, Festival allowance and annual leave are very small amount. There are so many factories where there is on option of such allowance.

Figure 1.2 Represents Living Standard depending variables

Source: own source Accommodation allowance, Transportation allowance and Medical allowance are very trifling amount which is not sufficient to maintain. Most of the company does not offer any kind of Pension options In our country there are insufficient labor union which makes workers in a backward position to bargain their payment and other rights. Sometimes Employees face obstacles to participate in labor union because unionism is banned most of the organization. On the other hand, Companies have broken their promises and pledges. Companies pay hardly any attention to miseries of the workers. In the absence of any stewardship of movement, a network has developed among the workers which is expanding and growing. After all, above indicators are used to measure of job satisfaction and standard of life of a garment employee according to new wage structure which is announced after the long struggle of the employees. The purpose of this paper is to find out the satisfaction level of garment workers in different factories in a garment industry.

Rationale of the Study:

Garment sector plays a vital role in the economy of Bangladesh. There is huge probability to increase the earning of foreign currency to export the garment products. But the probability of earning is diluted by recently occurring riots and anarchy of the garment industry. More than 100 times labor unrests are happened. Bangladesh is a developing country it very regrets that the development is restricted due to the proper

management of human resource and utilities of this resource, where a great number of people engaged into this sector directly or indirectly. This sector becomes victim in different time due to the misunderstanding among the labor, buyers and owners of the factories. There are so many studies on the problem of garment employee, prospect of garment sector, Challenges of garment sector etc. There are also several study, report and analysis about the recent anarchy and riot. But there are very few studies about the current six staged salary structure and the job satisfaction of the garment employees. The core perspective of this paper is to find out the job satisfaction of workers to their new salary structure and to measure the living standard of garment workers, though job satisfaction the core factor to get maximum work from the workers.

Scope of the Study:

The study is undertaken to measure the job satisfaction and living standard of garment workers in recent time. Day by day the cost of very ingredient is rise. Garment workers engaged in a hard struggle to get the standard salary. In this situation new salary structure is announced. According to new salary structure what is the degree of job satisfaction. Tow test the hypotheses, some variables are selected from the many variables. The study is used to measure the job satisfaction and living standard based on selected variables. Others extraneous (such as child care facilities, meter native leave, profit sharing fund) variables are exclude on the interest of the ideal study. In the case of statistical analysis, men median standard deviation and regression are used.

Limitation of the Study:

There are several limitations of the study. These are 1) Small sample size may not representative of the large target population. Only 80 test units are selected random from the approximately 3.5 million test unit. 2) Very few variables are consideration to conduct the study. There are other variables which affect the current study. 3) Only two hypotheses are tested which may not sufficient to understand the real situation of the practical field. 4) Test units do not have good command of English, so questions are translated into native language as a result the purity of study hampered. 5) Study is conducted in a small dimension, but it is needed to conduct in large sphere.

Literature Review:
The Ready Made Garment (RMG) industry emerged in Bangladesh in the late 1970s and quickly expanded to the point where its now the countrys dominant industry and employs around 3.5 million workers, 85% of them women - their very presence as a female workforce challenging patriarchal traditions (Salam

Abdus:2010). Since 2006, when a mass revolt shook the industry, RMG workers have sustained - with little union influence or membership - some of the highest levels of class struggle in the world (Hossain Basharat: 2006).The contribution of readymade garment (RMG) to the national export increases with the rebound of orders from international buyers following a recovery in the global economy (the Export Promotion Bureau: 2007). There are more than 3500 garments in our country. If all garments owner work in a body, they can establish a hospital, educational institution, training and research center for the workers and their issues as part of CSR (Corporate social Responsibility) ( Abdullah, Md @ Abu Yousuf: 1999). From this institution, the workers and their children can take services at cheaper cost since it will mostly be for them. If these facilities are ensured to them, more and more skilled people will come to this sector. But it is a matter of great regret that the industrialist are making profit and buying additional building, car for their maximum luxury (Mahmud Simeen: 2009). They are actually exploiting our cheap labor like foreign countries. This is the way our business men behave towards human being (Azim, M. Tahlil, and Nasir Uddin: 2008). Profit is the goal and motivation of a business man but profiteering is destructive to human being (Ahmed Fauzia: 2009) It is frightening news for our country that the leading industry is now passing through crucial moments. Recent volatile situation in different garments facilities is threatening it existence (Khondhker Bazlul @ Razzaque Abdur :2008). Since one year, the workers of RMG in different industries have been creating violence in the form of procession, vandalizing and blockading the roads to hike their minimum wage, attendance bonus and to ensure other facilities(Ahmed Nazneen:2008). These are common scenarios in most of the garments factories of Savar, Mirpur, Rupganj, Joydebpur, Gazipur, Kaspur, Ashulia, Nishchintapur, Norashinghpur, Zamgara and in other garment factories (Bhattacharya, D, M. Rahman and A. Raihan: 2009). About 140 garments factories were closed last year due to unrest accompanied by the crisis of power and gas, price hike of yarn, poor infrastructure, and low price offers from international buyers amid increased production cost. These are the main reasons for shutdown of production of a factory ( Khondhker Bazlul:2008). Whatever the situation, the authority will have to find out the path of solution to recover the huge economic losses. Low wage is the key reason of workers agitation. The present minimum wages paid by the garment factory to its workers is Tk 1662.50 per month while the workers are demanding Tk 5000 per month (,Razzaque Abdur:2010). The current minimum wage is really a tiny and insufficient amount against the current inflation -- both in food (7.85%) and non-food (5.49%) goods while general and average inflation are 6.89 % and 7.69% respectively (2009-10, July-March, BBS). The minimum wage of Tk.1662.50 was fixed on June 2006 when the cost of living was certainly lower than now. The Bangladesh Bank and the Bangladesh Institute of Development Studies, reported that since 2006 the cost of living of an RMG worker increased by at least 35 percent (BB @ bids: 2006). But the Centre for Policy Dialogue, a private think-tank, reported that the average cost of living increased by around 70 percent because of increasing house rent, gas and power price(CPD:2006).

Paying and working conditions in factories in Bangladesh have long been a source of concern, with protestors calling for basic pay to be raised to BDT5,000 (US$72) a month to enable workers to meet their living needs including food, shelter, clothes, education, health care and transport. Currently, most workers earn just BDT1, 1662 (US$24) per month - the national minimum wage set by the government back in 2006(Mishu Mosherafa: 2010). The recent incidences triggered over wage are a common and overarching demand of the workers. This is not the problem of one or two factories as Minister for Labor described to European Commission delegation (Bow, J. J: 2010). Statement of top brass of the government and Ministers are full with paradox- on the one hand they are always skeptical of recognizing the fact that workers can independently mobilize, spontaneously rise and press their demand home. One quarter of government is blaming the apparel scrap traders. Sometimes, some of the high ups are also alluding to inhuman minimum salary as cause for unrest (A.K.Azad:2010).As inflation continues to eat into workers wages and demonstrations and strikes increae, the employers organization - Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) - has announced it will open five fair price shops to sell subsidized staple foods to its workers (Grasmuck, S. and Grosfoguel, R : 2009). Seventy two incidents of labor unrest had taken place from January 1 to June 30, 2010. The incidents left at least 988 workers injured in police actions while 45 workers were arrested and more than 10,000 were sued and at least 78 workers were sacked (Kabeer Naila :2010). A series of incidents had also taken place in and outskirts of Dhaka until mid- July leaving hundreds of workers injured (Islam, Sadequl, 2010). Their demands include "that they should be paid their wages and overtime bills by the first week of every month and night allowance night-shift work (Islam .S:2010). They further demanded that they should be given weekly day-off and that the job of no worker should be terminated without valid reasons (Mishu Mosherafa: 2010)." In June 30, 2010 a main highway was blocked for 13 hours beginning at 8 am; workers from 3 factories were joined by hundreds from several others nearby workplaces. Negotiations began between worker representatives and bosses but reached no conclusions (Rahman Habibur:2010). On the other hand, the ready made garment (RMG) industry imposes ever-harder exploitation to maintain global competitiveness; its advantage of cheaper labor can be offset by competitors greater technological investment delivering higher productivity (Shakil.M.H:2010). So, to maintain its advantage, Bangladeshi capital often works its labor power to exhaustion (Islam, Sadequl, :2010). Focusing on the cheaper, less skilled end of the market, and with low start-up costs, it is possible for some Dickensian-type capitalists to fulfill a large RMG order by working the labor force to the limit; 10 to 14 hour days are normal for a workforce that is 90% female and from as young as 12 years old - back wages are often not paid, the workers are dismissed - then the whole process starts again (The Daily Star:June 30,2010). Protesters had demanded a rise in their monthly wages of 1,660, equivalent to $24, to a new minimum wage of 5,000 taka (Salam Abdus: 2010) An emergency wage board committee of government officials, garment manufacturers and union leaders announced the minimum monthly wage would rise from 1,662 taka the lowest industry salary worldwide

 to 3,000 taka (43 dollars)( The daily star:june 30,2010). The wage board has said the minimum wage will be set at 3,000 taka, which will include medical and housing allowances, (Iktedar Ahmed :2010) From the perspective of garment factories ,it is demanded that the salary of workers should be low due to following reasons to survive in the global completion(Paul-Majumder, P, : 2007).These adversaries, as he said, are high bank interest on loans, soaring yarn prices and the low CM charges offered by foreign buyers. He also pointed out that his factory now has to go 30 percent below its production capacity because of the energy crunch, or low supply of gas and power, and workers low skills ( Mazed .MA:2010). From the overall review it is evident that the problem of garment employee is needed to study. The core perspective of this paper is to find out the job satisfaction of workers to their new salary structure.

Objectives of the Study

The main objective of the study is to measure the job satisfaction of garment employees to new six staged salary structure and overall compensation. The other objectives of the study are as follow: i. ii. iii. iv. To measure the living standard of garment employees. To determine the cost of living of the garment workers. To identify the core reason of recurrent employees unrest in this sector. Find out the ways to remove the employees unrest in this sector. Job satisfaction refers to the overall satisfaction of the job. There are several variables to measure job satisfaction. These are Basic salary, Overtime, Bonus, Pension, Maternity leave, Job security, delay payment, working environment ,Unpaid wages, sudden closure of the factory, Obstacle to unionism, rising food and essentials prices. For the purpose of current study basic salary, Overtime, Bonus, Pension, Job security, delay payment, working environment are used to measure employees job satisfaction.

Research Methodology of the Study:

To find out the insights into and comprehended of the job satisfaction of the garment workers to their new six stages salary structure in the garment industry. Some garment factories are selected using following sampling technique. Sampling technique may be broadly classified as nonprobability and probability. Two types of technique are used to the research purpose. Nonprobability technique such as judgmental sampling technique is used to define target population such as Savar, Mirpur, Rupganj, Joydebpur, Gazipur, Kaspur, Ashulia, Nishchintapur, Norashinghpur,and Zamgara . From these target population four places are selected based on the convenience sampling technique.these are Savar, Mirpur, Ashulia and Gazipur. From the selected target market sampling unit is selected based on probability sampling technique such as simple random sampling.

Simple random sampling technique is a probability sampling technique in which each element in the population has a known and equal probability of selection every element is selected independently of every other element and the sample is drawn by a random procedure from a sampling frame. From each place 20 test units are selected and total 80 test units are determined for the purpose of the study. Sampling size is determined based on the judgment of the researcher.8 factories are selected from the four selected areas. Using simple random sampling technique 10 test units are selected each factory. The name of the factories is given below in a table1. Table 1: Shows Selected Respondents Name of the company Grades(Salary) Grade-1 Grade-2 Grade-3 Grade-4 Grade-5 Grade-6 Total (TK 9300) (TK 7200) (TK 4120) (TK 3763) (TK 3210) (TK 3000) ABA GARMENTS LTD. 1 1 2 2 2 2 10 AKH FASHIONS LTD. 1 1 2 2 2 10 AJAX SWEATERS LTD. 1 2 2 2 1 2 10 A.B.M APPARELS LTD. 1 1 2 2 2 2 10 ABC GARMENTS LTD 1 2 1 2 2 10 ABIR FASHIONS LTD. 1 2 2 2 2 1 10 ADEEB GARMENTS LTD.1 1 2 2 2 2 10 FASHIONWEAR LTD. 1 1 2 2 2 2 10 Total 10 10 15 15 15 15 80 Source: own source Each employee is eligible to the study whose salary is 3000 to 9300. There are six types of employees whose salary is in the selected range. Here every employee has equal chance to the interview or survey. Every test unit may answer MCQ type question. The research questionnaire contains two type of questions such as Yes-No question and multiple choice using five scale likert scale. There are four types of mode to conduct survey such as Telephone interviewing, personal interviewing, Mail interview, Electronic interviewing techniques. From these four modes Personal interviewing method is used to collect primary data from the test units. Data are also collected from the secondary sources such as articles, news paper, RMG related and Bangladesh statistical Bauru. Regression analysis is used to the relationship among the job satisfaction, basic salary, Transportation allowance, Accommodation allowance, Medical allowance, Festival allowance. Descriptive statistics such as mean, Median, Standard deviation are used to test hypotheses.

Hypotheses:
1) Ho: Employees are satisfied theirjob (Basic salary, Overtime, Bonus, Pension, Maternity leave, Job security, delay payment, working environment). Hi: Employees are dissatisfied theirjob. 2) Ho: Living standard (Medical, Accommodation, Transportation, cost of living) of

Garments employees is very well. Hi: Living standard of Garments employees is low.

RMG Workers Struggle to Gain Minimum Salary Structure in Different Places:

1. RMG workers block highway over salary arrears:

(Photo: The Daily Star in May, 10, 2010) Around 4,000 agitating garment workers blocked the Dhaka-Sylhet highway near Borpa bus stand at Rupganj in Narayanganj for more than two-and-a-half hours demanding payment of their arrear salaries in May, 10, 2010. The blockade created severe traffic congestion on both sides of the highway, causing sufferings to the hundreds of stranded passengers. Witnesses said the workers of Antim Knitwear Ltd started demonstrating inside the factory at Rupganj around 8:00am for payment of arrears. The angry workers also ransacked furniture of the factory and locked its main gate from inside. Ten workers of the garments factory were injured from brickbats. They were admitted to different local hospitals. The agitators withdrew the blockade around 11:45am after the factory owners rushed to the spot and assured them of paying their arrears by May 15, Forkan Sikder. The owners also assured the workers of paying their salary by the 10th of each month.

2.

Ransack 6 factories in Ashulia; clash with police for minimum wage; production in 7 units halted in June, 14, 2010 Operation of seven garment factories in Ashulia was suspended yesterday after several thousand workers vandalized six factories and clashed with police over implementation of the proposed minimum wage structure. At least 30 workers and 10 policemen were injured in clashes between law enforcers and employees of Envoy Group, owned by the president of Bangladesh Garment Manufacturers and Exporters Association. Representatives of garment workers submitted a proposal for a minimum wage structure to the government on January 14, said a high-up of the Wage Commission.They proposed fixing the minimum wage at Tk 5,000. The issue of remuneration of the RMG workers has been a lingering bone of contention. The issue of a minimum wage remains unresolved despite the fact the government has acknowledged that the current wage structure needs revision, but has done nothing tangible to ensure that a rational pay structure is put together.

No doubt the existing minimum wage is grossly inadequate. In the first place the amount was fixed half a decade ago, and it is below the minimum wage in many other sectors. The minimum wage must be tagged to the rate of inflation and should provide the basic minimum for a family of four to keep body and soul together. We feel that there is need for a channel of communication to remove misunderstanding and mistrust between the owners and workers and for this trade union rights should be awarded to the workers. A government promise to declare minimum new minimum wages for about 3.5 million workers of the main export earning sector has also helped calm down protests, according to some workers.

3. Fix RMG wage by July 28

A parliamentary body would ask the labour and employment ministry to declare a time befitting minimum wage structure for garment workers by July 28.The parliamentary standing committee on labour and employment ministry also recommended taking measures to resolve all the other problems in garment sector. At a meeting held at the Jatiya Sangsad Bhaban, the labour minister informed the committee a tripartite meeting involving the ministry, garments owners and workers representatives is likely to be held on next Sunday or Monday. The meet will discuss the ongoing unrest in the sector.

4. RMG workers demand Tk 5,000 minimum wage: Launch month-long agitation to meet demands
Garment workers yesterday announced a month-long peaceful agitation programme to press home their fivepoint demand, including a minimum wage of Tk 5,000. The leaders of Bangladesh Garment Workers Unity Council at their national convention in Dhaka also demanded the right to trade unionism, amendment to the labour laws, cancellation of the governments decision to form industrial police, and ration. The existing minimum wage for the readymade garment (RMG) workers is Tk 1,662.50, which was set in 2006. Meanwhile, the cost of living has increased by two times, said the speakers at the programme at National Press Club. The garment workers will form human chain, and hold seminar and discussion as part of their 27-day agitation programme that begins today. They also threatened with tougher movement if their demands are not met by July 27. 5. Garment workers' minimum wage fixed at Tk 3,000 The wage board has recommended raising the minimum monthly pay for garment workers to Tk 3,0 from Tk 1662.50. The proposed raise is 80 percent on the present wage of an entry-level worker, board Chairman Ikteder Ahmed said on Tuesday. Tk 2,000 will be the basic pay while Tk 800 or 40 percent of the basic will be paid in house rent and Tk 200 in health allowance.The non-grade workers have been brought under the grading

system keeping the seven wage grades unchanged. The recommendations were made on the basis of a consensus among majority of the six-member board. The owners representative, Shafiul Islam Mohiuddin, was present at the final meeting but did not sign the draft recommendations, Iktedar added. Abdus Salam Murshedy, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said the owners representative would sign the deal today with some conditions such as security for factory owners and release of stimulus funds. The announcement came after a meeting between the leaders of BGMEA and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA). Other conditions include a four-month timeframe for implementation of the proposed wage structure, zero tax at source, reduction of vessels turnaround time at the Chittagong port and suspension of minimum charge for the use of power and gas. Workers have demanded fixing the minimum wage at Tk 5,000 as the prices of essentials and house rent have gone up. Labor leaders and garment workers yesterday protested the proposed pay. Several incidents of labor unrest over the last few months prompted the government to form the third minimum wage board in January. The board headed by Ikteder Ahmed was given the responsibility to fix the minimum wage for 3.5 million garment workers. The first minimum wage board is constituted in 1994, fixed Tk 940 as minimum wage for garment workers. The second one, formed in 2006, set the minimum wage at Tk 1662.50.

Declaration of New Garment Wage:

(Source: The Daily Star) (Tk 3,000 minimum pay; highest raise 87pc; effective from Nov 1; mixed reaction among workers, owners, businesses) The government yesterday formally announced the new minimum salary structure for readymade garment sector hoping to put an end to the longstanding labour unrest over wages. Labour and Employment Minister Khandaker Mosharraf Hossain announced the new pay structure for around 3.5 million RMG workers in the country. The minimum salary at the entry level has been fixed at Tk 3,000: Tk 2,000 in basic pay, Tk 800 in house rent and Tk 200 in medical allowance. The apprentice level wage is fixed at Tk 2,500, up from Tk 1,200 now.

The new wage structure will come to effect from November 1, 2010, said the minister. With the declaration of the new minimum wage, workers of different grades would have increases in their salaries at different rates. Garment worker leaders, however, expressed disappointment over the new pay scale as they have been bargaining for Tk 5,000 for years.

Reaction at New Wage Structure:

1. RMG wage sparks violent protests: Rampaging workers vandalize over 200 business establishments, several factories in city a day after announcement of new pay structure in July, 31, 2010 (Photo courtesy: Jessica Mudditt) A furniture shop in the capitals Gulshan vandalized during the RMG unrest yesterday although the shop is in no way linked to the issue. Garment workers rampaged through different parts of the capital, protesting the wage structure providing a minimum monthly pay of Tk 3,000 against their demand of Tk 5,000. Several thousand garment workers yesterday rampaged through different parts of the capital and Gazipur rejecting new wage structure and demanding Tk 5,000 minimum wage from August.At least 20 people including five police personnel were injured in yesterdays clashes in Dhaka between law enforcers and workers. Garment worker Parvin said, "We were forced to take to the streets as the owners exploited us right under the governments nose. I have to spend Tk 1,000 for food and Tk 1,500 for house rent. How will I maintain other things with this wage?""Moreover, the factory owners want to deprive us of the increased Eid bonus by trying to implement the wage structure from November. 2. Apparel workers on rampage in protest at new wage in July, 31, 2010

(Photo: New age in July, 31, 2010)

Apparel workers on Friday went on the rampage through Gulshan, Banani, Kakali, Mahakhali and Tejgaon in the capital in protest against the new wage structure announced on Thursday. Several thousand workers, who took the streets in the morning blocking roads passing through the areas, clashed with the police, who tried to disperse them by charging at them with truncheons and by firing teargas shells. 3. Violence stops RMG hubs:
(Photo: STARStaff Correspondent)

Law enforcers lob tear shells to disperse the agitating garment workers at Jamgora, Ashulia yesterday. Owners of at least 350 factories in Savar, Ashulia and Fatullah areas suspended production yesterday as the workers demonstrated against the new wage structure for the second consecutive day. 4. RMG sector still in grip of violence: (Photo: STARStar Report) Garment workers block the Fatulla-Narayanganj road in front of Shibu market in Fatulla yesterday demanding Tk 5,000 as minimum wage RMG workers continued demonstrations in Ashulia and Narayanganj yesterday even though labour representatives agreed to the new pay scale the previous day with a pledge to help maintain normal work environment in industrial areas. At least 80 people were injured as labourers clashed with police in Ashulia and Narayanganj for the third consecutive day. Production in several factories was suspended after the workers resorted to violent protests demanding a minimum wage of Tk 5,000 with effect from August 1. The labour representatives at a meeting with ministers, chamber leaders and garment owners on Sunday agreed to the new pay structure for garment sector and promised to help keep normal work environment in industrial areas. 5. Unrest rolls into 5th day: Garment workers take to streets, say pay hike still too small

(Photo: The Daily Star in August, 3, 2010)

A riot truck sprays water and dye on garment workers in the capitals Tejgaon industrial area yesterday after the workers took to the street for the fifth straight day demanding Tk 5,000 minimum wage. Inset, police charge truncheon sending agitating workers in disarray Sporadic violence marked the fifth day of ready-made garment industry unrest yesterday as angry workers took to the streets over an announced pay hike they say is still too low.

Challenges of RMG Sector to Enact the Minimum Wage:

The readymade garment (RMG) sector in our country that started its journey about two decades has been playing a pivotal role in the national economy, in terms of both providing jobs and as foreig currency earner. The volume of exports increased by 16 per cent in fiscal year (FY) 2006-2007, led by RMG sector despite several months of political turmoil and labor unrest along with anarchy and vandalism by some vested quarters that led to ransacking of approximately 100 factories in and around the capital city of Dhaka. (Ahmed Showkat Masud). Export growth was over 20 per cent until March, 2007 but started to decline from April, 2007. As stated by some of the owners of the RMG factories, some influential buyers have started bargaining over prices against their orders (export LCs and sales contracts). Already the profit margin of the garment factories has declined substantially. If the buyers offer lesser unit prices against exports, the factories, mainly those who are dependant on buying houses, will be vulnerable. commission of the buying houses will reduce the profit margin substantially. Some buying houses charge commission up to 5.0 per cent of export LCs/ contracts values. Servicing interest payments against back to back LCs and receiving export proceeds after deduction of various charges, the exporters can hardly earn 13 per cent to 14 per cent profit over the value of export items. Growth of bank credit flow declined significantly during the second half of the last year despite the fact that there was surplus liquidity with the banks. The reduction of volume of import has been one of the major causes for this. Adverse global market conditions and changed political situation were the reasons for the importers remaining not fully active. On the other hand, growth of export has started to decline since last April. It has negatively impacted the credit flow. Banks are being compelled to make payment of back-to-back LCs that was opened three to four months back. If the banks make payments by debiting their clients foreign currency accounts, they will not have enough foreign currency to meet day-to-day operational expenses, particularly of the factories. Buyers from the European Union (EU) and the US are more conscious about compliance issues. The major criteria for buyers compliance are implementation of minimum wages, payment for overtime, maternity leave facility with payments, festival allowance and annual leave, weekly holiday, arrangement of fire extinguishers, etc. Sector leaders blame high production cost, low price from buyers Most garment factory owners say they are now not in a position to hike workers monthly salary to minimum Tk 5,000 from the existing pay of Tk 1662.50. Many blamed the increasing cost of production and buyers pressure for low price for their inability to execute the minimum salary in accordance with the workers demand.

Over the last month, workers of some factories staged several demonstrations to press home their demand for such minimum pay. These adversaries, as he said, are high bank interest on loans, soaring yarn prices and the low CM (cutting and making) charges offered by foreign buyers. "Still, I shall have to follow government rules, as it has already formed a board to announce a minimum salary structure for the garment sector," said Mazed. He also pointed out that his factory now has to go 30 percent below its production capacity because of the energy crunch, or low supply of gas and power, and workers low skills. Meantime, buyers also place fewer orders, as many fail to ensure timely delivery of apparels. As for example, he said, if the previous order was for 10 lakh pieces, it now declines to seven lakh pieces. "Many small factories may face closure due to sudden price hike of yarn in the local market, followed by a hike in raw cotton prices globally, he said. Abdus Salam Murshedy, president of Bangladesh Garment Manufacturers and Exporters Association, also points to the present adversaries of the industry. "The delivery in time is an important factor. Now we are overcoming the aftershock of the severest global financial recession, but energy crunch grips us. As a result, the production falls. Also, workers inefficiency has contributed to such decline in output, Murshedy said. Despite all these, workers salary needs to be hiked, as the prices of basic commodities have gone high in the local markets, he said. The owners will implement the wage as per the decision of the Wage Board."

RMG sector: Challenges versus opportunities in Global Prospect:

(Photo: Liton Rahman/ DrikNewsM. Shahidul Islam)

The raging controversy over wage hike in the readymade garments (RMG) sector continues. This is happening at a time when the industrial structure in China, the worlds largest exporter of apparel products and one of the major competitors of Bangladesh, is undergoing rapid transformations. While the China shift could benefit Bangladeshs RMG in the medium to long run, the industry faces some short-term challenges largely owing to economic problems in the advanced economies. While the emerging markets returned to the high growth path following the great recession of 2008-09, the advanced countries economic outlook remains gloomy. The hope of economic recovery is overshadowed by continuous job losses in the United States (US) and the sovereign debt problem on the both shores of the Atlantic. Further, most countries in Europe are announcing a series of austerity measures that could slash their demand for imported goods and services significantly. Both Europe and the US remain Bangladeshs major exports markets.

Amidst the global financial crisis Bangladeshs apparel exports have not had much impact largely owing to the massive fiscal stimulus packages in the advanced world. However, the recent austerity measures and a less than rosy outlook of advanced economies could affect Bangladeshs apparel sector adversely. This indeed limits the RMG owners in Bangladesh revising labour cost upward, particularly at the scale the workers have been demanding. The rising unit labour cost and upward adjustment in its currency mean that a plethora of lowend manufacturing jobs will eventually be moving out from China. Indeed, many jobs have already moved inland from Chinas coastal areas and some low-end manufacturing units are relocating to Vietnam. Moreover, following the recent financial crisis, there is a realisation in China that the countrys current growth model that relies excessively on exports and investment needs to be rebalanced, with a greater emphasis on consumption. Chinas move towards a vertical economy could create much room for Bangladesh, given the latters abundant supply of labour. Bangladeshs other competitors in the neighbourhood, India and Pakistan, are not in a good shape owing to the formers dilemma with its economic openness and the latters overwhelming political problems. Indias economic openness bars its apparel sector taking the currency advantage -- undervalued exchange rate -- that the Bangladeshi RMG sector enjoys, given the huge capital inflows in the country that makes the Rupee exchange rate highly volatile. Given the structural shift in China and a bleak economic outlook of the advanced countries, the authorities in Bangladesh must understand the changes clearly before taking ad hoc decisions. There are three stakeholders as far as the RMG sector is concerned -- the plant owners, the workers and the government. The workers fight against unsustainably lower wages in RMG is understandable given the growing cost of living in Dhaka. Nevertheless, they must accept the fact that it is the cheap labour cost that has made Bangladesh a competitive place for apparel manufacturing.

Nonetheless, the recent hike in Chinas minimum wage will help Bangladesh to maintain its low cost advantage despite the likely upward wage adjustment in the RMG sector. The situation in the global economy should be researched carefully. The owners and the government should explore new markets for apparel products, particularly focusing on emerging markets. More than half of global economic growth is now driven by emerging markets. However, Bangladeshs PR skills are relatively underdeveloped. This is reflected by the fact that it has failed to showcase the country in the 2010 Shanghai Expo, the largest business gathering ever. This also means that owing to high opportunity costs, China, Brazil, South Africa and even India will increasingly abandon low-end manufacturing plants and start buying such products, including apparel, from Bangladesh, Indonesia and similar low cost producers. Such a scenario is not very unlikely in the near future. Bangladesh is one of the few countries that stand to benefit from such changes if the respective stakeholders act prudently

The Relationship between Minimum Wage and Labor:

To see the relationship between Minimum Wage and Labor we will have to consider a labor market. If we take a look at the figure (1) below we can see that, like all other market the labor market is consist of the forces of demand and supply. Workers determine the supply of labor and the firms determine the demand. Without the intervention of government and other dominating organizations to intervene, the wage adjusts to the balance of labor supply and labor demand. So at that point the situation is at the equilibrium of labor demanded and the labor supplied. Figure 2.1 shows that labor demand and labor supply relationship.

Wage

Equilibrium wage

Quantity of

Equilibrium Employment Figure: 2.1 Source: Bow, J. J, 2010

Labor

Another Figure (2.2) below, shows that a labor market with a minimum wage is settled by the government or any dominant organization. If the minimum wage is above the equilibrium level to pay the workers efficiently, as it is here, the quantity of labor supplied exceeds the quantity demanded. The result is unemployment and higher the minimum wage will lead higher unemployment.

Wage

Minimum wage

Quantity of labor Quantity Quantity Demand supplied

Figure: 2.2 Source: Bow, J. J, 2010 Labor supplied and labor demand intersects a point which is called equilibrium point. Above of this point is considerate as an unemployment portion. If the portion is so large a country can not improve that why government come to interfere to reduce the unemployment and set salary to maximize the employment.

Bangladesh provides the world cheapest labor market. There are huge opportunities to invest in RMG sector only maintaining the convenience salary structure. Recently labor unrest is occurred to gain their legal right. If the labor demand is completely granted, the costs of labor still low then any other country of the world.

The Comparative Analysis between Current Salary Structure and the Export of the RMG Product:
The Ready -Made Garments (RMG) sector has emerged as the biggest earner of foreign currency. The RMG sector has experienced an exponential growth since the 1980s. This garment industry of Bangladesh has been the key export division and a main source of foreign exchange for the last 25 years. Some past years statistical review would be given in table 1. Table 2 : Shows Gradually RMG Export Increase every year Ye ars Tot of Rl PerBa R Ex Mpcenngl M
Q079M13575. 00.812 26-04) 1@%3W: ' i771l63 14*75 . 82 ef5%>. \47.3^65.32 I00124%2 162% I- 96. 0% 04. 11 20172 0 4860.43 4583.80 4912.10 5686.09 6417.67 (5.67%) 7.16% 15.75% 12.86% 6467.30 5986.09 6548.44 7602.99 8654.52 75.15% 76.95% 75.01% 74.78% 74.15%

65 %

Source: Bangladesh Knitwear Manufacturers and Exporters Association From the table value, it is observed that approximately 75 to 78 percent earning come from the RMG sector of the country. In 2000-2001 to 2001-2002 export decrease 5.67% but in the following year export is gradually increased. In the year 2004-2005 to2005-2006 the export is increased 23.11% after the announcement of second time wage structure of the garment employees. After that export is increase moderately but in the year of 2008-2009 export is increase in a decrease rate. But salary does not increase in spite of increase cost of living. Table 2.2 shows Gradually RMG Export Increase every five year Ye R Per arsM cen of G tag Ex ( e porMillInc $f se/ De cre ase 20048 6 00.4 2003 1 20064132. 4- 7.6 03 2007 % 5 20012494. 9- 96.72 20172 % 0 From the table value, it is clear that the export of the RMG sector increase dramatically. In the year 2000-2001 to 2004-2005 export increase 32.03% but salary is stand still. After the long struggle the second wage structure is announced in the year 2006 and the salary does not increase til2010. From 2004-2005 to 2009-2010 the export of the RMG sector increase approximately 95%. After long term struggle the third time new wage structure is announced in the garment industry. The new Garment wage is following table.

ion t TTC rea

New Garment Wage:

(Source: The Daily Star) Garment industrys monthly minimum wage was last raised after the mass revolt of 2006. The increase, to Taka 1,662[15/$23/18], was already inadequate - and since then inflation of basic foodstuffs has risen over 70%. While workers were demanding Tk 5,000[45/$71/54], the final offer from the tripartite negotiations between government, the employers federation BGMEA and a minority of claimed labor representatives and announced above wage structure. According to the new wage structure workers are divided into six grades. The minimum salary of the entry level is 2,500 taka per month, minimum wage of the garment worker 3000 taka per month and the heist salary is 9300 taka per month. Salary of the garment workers increases every grade more than 67 percent. The height percentage of salary increase in the entry level workers such as 108 percent. Cost of living is also increase as double as previous five year. Now the question is the new salary is sufficient to the garment workers. From the first table, it is noticed that Bangladesh is mostly depended on the RMG sector to earn the foreign currency. So wage board should monitor the total activities of the Garment industry.

Analysis of Hypotheses:
1) H0: Employees are satisfied theirjob (Basic salary, Overtime, Bonus, Pension, Maternity leave, Job security, delay payment, working environment). H1: Employees are dissatisfied theirjob. Job satisfaction depends on the payment of Basic salary, Overtime, Bonus, Pension and well consideration of Maternity leave, Job security, delay payment, working environment of any garment factory. To know the job satisfaction, it is mandatory to analysis the variable that affects thejob satisfaction of an employee. To collect data a personal survey using likert scale. Rating points (3) (4) disagree size

Table 3: shows Respondents Response

Name of the Variables StronglyAgreeNeutralDisagreeStronglySample agree(1)(2) (5) Bas0 4 ic sala 12 34 30 80

y is suff icie nt Del 31 35 14 0 ay pay me nt 0 80

Internship Report On............................................1 Submitted To:...................................................1 Submitted By:...................................................1 Preface.......................................................1 Employees Job Satisfaction of Garments Industry in Bangladesh: Current Salary..................................................5 Structure.......................................................5 Introduction:.................................................5 Problem Definition:...........................................5 Conceptual Frame Work:........................................6 Source: own source..........................................7 Source: own source..........................................8 Rationale of the Study:.......................................8 Scope of the Study:...........................................9 Limitation of the Study:......................................9 Literature Review:............................................9 Objectives of the Study......................................12 Research Methodology of the Study:...........................12 Hypotheses:..................................................13 RMG Workers Struggle to Gain Minimum Salary Structure in Different Places:............................................14 1.RMG workers block highway over salary arrears:...........14 2.Ransack 6 factories in Ashulia; clash with police for minimum wage; production in 7 units halted in June, 14, 2010 ...........................................................14 3.Fix RMG wage by July 28..................................15 4.RMG workers demand Tk 5,000 minimum wage: Launch month-long agitation to meet demands..................................15 Declaration of New Garment Wage:.............................16 Reaction at New Wage Structure:..............................17 3.Violence stops RMG hubs:.................................18 4.RMG sector still in grip of violence:....................18

5. Unrest rolls into 5th day: Garment workers take to streets, say pay hike still too small......................18 Challenges of RMG Sector to Enact the Minimum Wage:..........19 RMG sector: Challenges versus opportunities in Global Prospect: .............................................................20 The Relationship between Minimum Wage and Labor:.............22 Source: Bangladesh Knitwear Manufacturers and Exporters Association................................................26 New Garment Wage:............................................27 (Source: The Daily Star)...................................27 Analysis of Hypotheses:......................................27 Likert scale...............................................30 Pension:...........................................39 Job Security:......................................41 Regression.............................................44 Coefficient Correlations...........................48 Medical Allowance:.................................55 Transportation Allowance:..........................57 Cost of Living:....................................58 Recommendation:............................................60 Conclusion:................................................61 Problems and Prospect of Garments Industry in Bangladesh and the Supportive Policy Regime/ Current State of Affairs .......................................................68 Info and Rating........................................68 Share & Embed Related Documents........................68 p...............................................................9 p...............................................................9 More from this user....................................71 Add a Comment...........................................9 tiv al allo wa nce
(bo nus )

Job 0 4 sec urit y

8 36 32 80

Job 0 6 12 31 31 80 sati

sfac tion

Source: survey data Likert scale Str Val onguely 1 agr ee/ Mo re sati sfie d/ Mo re sig nifi can t/D ra mat ical ly inc rea se
A

g ree/V al Sat ue- isfi 2 ed/

N' .1: Shows the ^mpti^g^tlCs ^Maiafec&Kfeti Sig eEitio sala pay rtim alio uritysfac nifi n ryismen e wan tion can suffi t cien (bo t/M ode rate inc rea se t nus)
Table 3

ce

Neutral/Moderate satisfied/Moderate significant/slightly increase Disagree/Slight satisfied/Light significant/Not increase Strongly disagree/Dissatisfied/Insignificant/Decrease

Value-3 Value-4 Value-5

Here some mathematical calculation are given to show the relationship among the variable based on survey data collected via personal contract with the garment workers. Theses are regression, correlation and coefficient of correlation. These are regression, correlation and coefficient of correlation.

Regression:

There are one dependent variable and only six independent variables. The above table is made based on personal survey data where five point likert scales is used on various dimension. 1 is considered most positive value (strongly agree/most sufficient/moist significant) and 5 is Bea fflnisf MSIBi&I.IBBli .1293 HAAHt Jfflfl T at(le^yie:9ii!hB':^lfelaaisiHjia^a4io ns taflErrtiliasfacsala pay rtim alio urity considered most negative d)atityoition ry is men e wan value (strongly on keffi suffi t ce cien cien (bo tius) t nus) disagree/insignificant/insufficient).so more the mean and median value more probability the factor is unfavorable. Standard deviation reflects the participant response fluctuation. Table 3.3:: S^ow^ss:ili(e,'^eM(Cii!f]1illsi1?iorrelations Bap cyc caeasiaaaiiiflajaHiiMaiaaa en^istmitar^TiT^pawsm111 eg^Eyas e me5wa6ry is ^arrneffi t ce suffi abie(ben (bo cien ce bus) nus) t at?) sfac The correlation is one of the tion most common and most useful statistics. A correlation is a single number that describes the degree of relationship between two variables. Through the magic of mathematics it turns out that r will always be between -1.0 and +1.0. If the correlation is negative, we have a negative relationship; if its positive, the relationship is positive. Delay payment and job security are negatively correlated with job satisfaction. Basic salary, overtime, pension and bonus are positively correlated. But positively correlation is not strongly related. So it is clearly articulated that there is relationship among the factors. A measure of the interdependence of two random variables that ranges in value from -1 to +1, indicating perfect negative correlation at -1, absence of correlation at zero, and perfect positive correlation at +1. Also is called coefficient of correlation. Basic salary, Overtime, Bonus, Pension, Job security, delay payment are correlated. If one component is increase, other components are decrease because total amount is fixed. as a result each components are negatively correlated

Basic Salary:

From the statistically analysis, it is appeared that most of garment workers thinking about their salary are insufficient. From the survey method, it is found that 80% of the employees seems that their salary is insignificant compared to their work.
Basic salary is sufficient

Fre Per Vali Cu quecent d mul ncy Per ativ cent e Per cent Vali Agr 4 5i0 5i0 5i0 d ee Neu 1215i015i020i0 tral Dis 3442i542i562i5 agr ee Stro 3041.237.5100. ngly 5 0 disa gre e Tot 80100.100. al 0 0

From the above table, it is appeared that 34 respondents disagree and 30 respondents strongly disagree from the 80 test units.

The statement Basic salary is sufficient to meet basic need and bear normal life 42.5% disagree and 41.25% strongly disagree that the salary is sufficient. From the descriptive statistics, it is observed that

Mean value 4.125, median value 4 and standard deviation are .847 when the more satisfaction value is 1, and moderate satisfaction value is 2. Observing this statistics, it is easily infer that the current salary does not satisfactory level.

Overtime:
From the statistically analysis, it is appeared that most of garment workers thinking about their Overtime salary are insufficient or do not pay according to law. From the survey method, it is found that 78% of the employees seems that their overtime salary is insignificant compared to their work.
Overtime

Fre Per Vali Cu quecent d mul ncy Per ativ cent e

Per cent Vali Sati 6 7.5 7.5 7.5 d sfie d Mod 1417.517.525.0 erat e sati sfie d

Overtime

Slig 3746.246.271.2 Internship Report On.............................................1 Submitted To:....................................................1 Submitted By:....................................................1 Preface........................................................1 Employees Job Satisfaction of Garments Industry in Bangladesh: Current Salary...................................................5 Structure........................................................5 Introduction:..................................................5 Problem Definition:............................................5 Conceptual Frame Work:.........................................6 Source: own source..........................................7 Source: own source..........................................8 Rationale of the Study:........................................8 Scope of the Study:............................................9 Limitation of the Study:.......................................9 Literature Review:.............................................9 Objectives of the Study.......................................12 Research Methodology of the Study:............................12 Hypotheses:...................................................13 RMG Workers Struggle to Gain Minimum Salary Structure in Different Places:.............................................14 1.RMG workers block highway over salary arrears:...........14 2.Ransack 6 factories in Ashulia; clash with police for minimum wage; production in 7 units halted in June, 14, 201014 3.Fix RMG wage by July 28..................................15 4.RMG workers demand Tk 5,000 minimum wage: Launch month-long agitation to meet demands..................................15 Declaration of New Garment Wage:..............................16

Reaction at New Wage Structure:...............................17 3.Violence stops RMG hubs:.................................18 4.RMG sector still in grip of violence:....................18 5. Unrest rolls into 5th day: Garment workers take to streets, say pay hike still too small...............................18 Challenges of RMG Sector to Enact the Minimum Wage:...........19 RMG sector: Challenges versus opportunities in Global Prospect: ..............................................................20 The Relationship between Minimum Wage and Labor:..............22 Source: Bangladesh Knitwear Manufacturers and Exporters Association................................................26 New Garment Wage:.............................................27 (Source: The Daily Star)...................................27 Analysis of Hypotheses:.......................................27 Likert scale...............................................30 Pension:...........................................39 Job Security:......................................41 Regression.............................................44 Coefficient Correlations...........................48 Medical Allowance:.................................55 Transportation Allowance:..........................57 Cost of Living:....................................58 Recommendation:............................................60 Conclusion:................................................61 Problems and Prospect of Garments Industry in Bangladesh and the Supportive Policy Regime/ Current State of Affairs. 68 Info and Rating........................................68 Share & Embed Related Documents........................68 p................................................................9 p................................................................9 More from this user....................................71 Add a Comment...........................................9 From the above table, it is appeared that 37 respondents Slight Satisfied and23 respondents Dissatisfied from the 80 test units.

ied

The statement Overtime amount is paid according to the law 46.5% disagree and 41.25%strongly disagree that the overtime salary is sufficient. From the descriptive statistics, it is observed that Mean value 3.96, median value 4 and standard deviation are .877when the more satisfaction value is 1, and moderate satisfaction value is 2. Observing this statistics, it is easily infer that the current overtime salary does not satisfactory level.

Festival Allowance (bonus):

From the statistically analysis, it is appeared that most of garment workers thinking about their Festival

allowance (bonus) are insufficient. From the survey method, it is found that 77.5% of the employees seems that their Festival allowance (bonus) is insignificant compared to their work.
Festival allowance (bonus)

Fre Per Vali Cu quecent d mul ncy Per ativ cent e Per cent Vali Sati 6 7.5 7.5 7.5 d sfie d Mod 1215.015.022.5 erat e sati sfie d Slig 313 8.83 8.86 1.2 ht sati sfie d Diss 3142.538.8100. atisf 0 0 Tot 80100.100. al 0 0

From the above table, it is appeared that 31 respondents Slight Satisfied and31 respondents Dissatisfied from the 80 test units.

ied

The statement Festival allowance (bonus) is satisfied amount 15% moderately satisfied, 38.75% slightly satisfied and 42.50% dissatisfied that the Festival allowance (bonus) is sufficient. From the descriptive statistics, it is observed that Mean value 4.09, median value 4 and standard deviation are . 916when the more satisfaction value is 1, and moderate satisfaction value is 2. Observing this statistics, it is easily infer that the current Festival allowance (bonus) does not satisfactory level.

Delay Payment:
From the statistically analysis, it is appeared that most of garment workers thinking that they can not get their payment timely. From the survey method, it is found that around 83% of the employees seem that they are deprived from their timely payment.
Del ay pay me nt

Fre Per Vali Cu quecent d mul ncy Per ativ cent e Per cent ValiStro 3141.238.838.8 d ngly 5

agr ee Agr 3543.843.882.5 ee Neu 1417.517.5100. tral 0 Tot 80100.100. al 0 0

From the above table, it is appeared that 35 respondents agree and31 respondents strongly agree from the 80 test units.

The statement Delay payment is occurred in every month most of garment factories 43.8% agree and 41.25% strongly agree that the delay is taken place. From the descriptive statistics, it is observed that Mean value 1.78, median value 2 and standard deviation are .721 when the value of disagree is 4, and strongly disagree value is 5. Observing this statistics, it is easily infer that the delay is taken place.

Pension:
From the statistically analysis, it is appeared that most of garment factories do not have any pension scheme. Some are given in different name. Very few factories manage the pension.
Pen sio n sys tem is avai labl e.

Fre Per Vali Cu quecent d mul ncy Per ativ cent e Per cent Vali Yes 2328.828.828.8 d No 5771.271.2100. 0 Tot 80100.100. al 0 0

From the survey method, it is found that 71.5% of the garment factories do not have any pension scheme. But 28.8% of the garment factories provide pension Pension Fre Per Vali Cu quecent d mul ncy Per ativ cent e Per cent Vali Mod 1215.015.015.0 d erat e Sus tain able Slig 2430.030.045.0 ht sust aina ble Not 4455.055.0100. sust 0 aina ble

Tot 80100.100. al 0 0

From these factories only 15% think that pension is sustainable and rest of them are think that pension amount is so insignificant that it is meaningless.

Respondents who get pension in different name argued that 60% say slightly satisfied of the paying amount.

Job Security:
From the statistically analysis, it is appeared that most of garment workers thinking about their job are unsecured and depends on the demand and will of owner. From the survey method, it is found that 85% of the employees seem that their job is uncertain.
Job sec urit y

Fre Per Vali Cu quecent d mul ncy Per ativ cent e Per cent Vali Agr 4 5.0 5.0 5.0 d ee Neu 810.010.015.0 tral Dis 3645.045.060.0 agr ee Stro 3240.040.0100. ngly 0 disa

gre e Tot 80100.100. al 0 0

From the above table, it is appeared that 36 respondents disagree and 32 respondents strongly disagree from the 80 test units.

The statement Job security of garment employees is certain 45% disagree and 40% strongly disagree that their job is uncertain. From the descriptive statistics, it is observed that Mean value 4.09, median value 4 and standard deviation are .916 when when the scale value of disagree is 4, and strongly disagree value is 5. Observing this statistics, it is easily inferred that the job of employees are uncertain. Analyses of six factors which affect the job satisfaction, It is evident that Null hypothesis (Employees are satisfied their job (Basic salary, Overtime, Bonus, Pension, Job security, delay payment) is rejecter and alternative hypothesis (Employees are dissatisfied their job.) is accepted.

Second Hypothesis Analysis:

2) Ho:Living standard (Medical, Accommodation, Transportation, cost of living) of Garments employees is very well. Hi: Living standard of Garments employees is low. Living standard depends on the payment of Medical allowance, Accommodation allowance, Transportation fee, cost of living and all other factors related to conduct life smoothly. To know the living standard of garment workers, it is mandatory to analysis the variable that affects the living standard of employees. Variables are analyzed one after another.

Table 4: Shows the Respondents Response of the Survey

Na me Rat of ing Mo SatiMo SligDis Sa re sfie der ht sati mpl sati d ate Satisfie e the sfie (2) Satisfie d(5 size d sfie d(4 ) (1) d(3 ) ) 0 8 41 31 80

es

Liv 0 ing stan dar d

Me 0 dic al allo wa nce

0 10 27 43 80

Acc0 0 om mo dati on allo wa

10 29 41 80

nce
0

Tra 0

732

41

80

nsp orta tion allo wa nce Cos0 0 t of liv i n g 24 48 8 80

Source: own work Figure: Table 3.Here some mathematical calculation are given to show the relationship among the variable based on survey data collected via personal contract with the garment workers . These are regression, correlation and coefficient of correlation.

Regression
TA BL E 4.1 Sh ow s De scr ipti ve Sta tist ics Mean Livi 4.28.64080 ng 75 29 Std. Deviation N

Mean stan dar d

Std. Deviation

Med4.41.70680 ical 25 10 alio wan ce Accommodation allowance Transportation allowance Cost of living

4.3875 4.4250 2.8000

.70250 .65168 .60379

80 80 80

There are one dependent variable and four independent variables. The above table is made based on personal survey data where five point likert scales is used on various dimension. 1 is considered most positive value (strongly agree/most sufficient/moist significant) and 5 is considered most negative value (strongly disagree/insignificant/insufficient).so more the mean and median value more probability the factor is unfavorable. Standard deviation reflects the participant response fluctuation.

Correlations
The correlation is one of the most common and most useful statistics. A correlation is a single number that describes the degree of relationship between two variables. Through the magic of mathematics it turns out that r will always be between -1.0 and +1.0. If the correlation is negative, we have a negative relationship; if its positive, the relationship is positive. Medical, Accommodation, Transportation, cost of living are positively correlated. But positively correlation is not strongly related. So it is clearly articulated that there is relationship among the factors.

Ta ble 4.2 Sh ow s the

Co rre lati ons Livi MedAccTra Cos ng ical om nsp t of stanallo modorta livin dar wanatio tion g d ce n allo allo wan wance ce Pea Livi 1.00.042.425.219- rsonng 0 .144 Corrst an elati dar on d Med.0421.00- .164.107 ical 0 .071 allo wan ce Acc .425- 1.00.161om .0710 .084 mod atio n allo wan

ce Tra .219.164.1611.00nsp 0 .489 orta tion allo wan ce Cost of. 144 livin g Sig. Livi. . 355.0 00.02 5.101 (1- ng tailest an d) dar d Med.355. .265.073.173 ical allo wan ce Acc .000.265. .077.231 om mod atio n allo .107- 1.00 .084.4890

wan ce Tra .025.073.077. .000 nsp orta tion allo wan ce Cos.101.173.231.000. t of livin g

a.

Dependent Variable: Living standard

Coefficient Correlations
A measure of the interdependence of two random variables that ranges in value from -1 to +1, indicating perfect negative correlation at -1, absence of correlation at zero, and perfect positive correlation at +1. Also is called coefficient of correlation. Basic salary, Overtime, Bonus, Pension, Job security, delay payment are correlated. If one component is increase, other components are decrease because total amount is fixed. as a result each components are negatively correlated.

Table 4.3: Shows the Coefficient Correlations Mo CosAccMe Tra del t ofom dicansp livinmo l orta g dati allo tion on wanallo allo ce wan wan ce ce

CorrCos 1.00- - .512 elatit of0 .017.218 ons livin

Acc- 1.00.101om .0170 .159 mod atio n allo wan ce Med- .1011.00ical .218 0 .261 allo wan ce Tra .512- - 1.00 nsp .159.2610 orta tion allo wan ce

Internship Report On. . . .1 Submitted To: 1 Submitted By: 1 Preface. . . .1 Employees Job Satisfaction of Garments Industry in Bangladesh: Current Salary .............5

Structure. . . .5 Introduction :..........5 Problem Definition: 5 Conceptual Frame Work: 6 Source: own source....7 Source: own source....8 Rationale of the Study:. 8 Scope of the Study:. . . . .9 Limitation of the Study:. . . . .9 Literature Review:. . . .9 Objectives of the Study ..........12 Research Methodology of the Study:. . . .12 Hypotheses: ..........13 RMG Workers Struggle to Gain Minimum Salary Structure in Different Places:. . .14 1.RMG workers block highway over salary arrears:.14 2.Ransack 6 factories in Ashulia; clash with police for

minimum wage; production in 7 units halted in June, 14, 2010.....14 3.Fix RMG wage by July 28..15 4.RMG workers demand Tk 5,000 minimum wage: Launch month-long agitation to meet demands..15 Declaration of New Garment Wage:. . . . .16 Reaction at New Wage Structure: 17 3.Violence stops RMG hubs:....18 4.RMG sector still in grip of violence:18 5. Unrest rolls into 5th day: Garment workers take to streets, say pay hike still too small18 Challenges

of RMG Sector to Enact the Minimum Wage:. . . . .19 RMG sector: Challenges versus opportunitie s in Global Prospect:. 20 The Relationship between Minimum Wage and Labor: 22 Source: Bangladesh Knitwear Manufacture rs and Exporters Association .........26 New Garment Wage:. . . . .27 (Source: The Daily Star)....27 Analysis of Hypotheses: ..........27 Likert scale....30 Pension :....39 Job Securit y:...41 Regressio n......44 Coeffic ient Correla tions48 Medical Allowan

ce:..56 Transpo rtation Allowan ce:..58 Cost of Living: .....59 Recommendat ion:.....61 Conclusion: .........62 Problems and Prospect of Garments Industry in Banglades h and the Supportiv e Policy Regime/ Current State of Affairs69 Info and Rating.69 Share & Embed Related Documents .......69 p............9 p............9 More from this user .......71 Add a Comment.9 mod atio n allo wan

ce

Med- .001.009ical .003 .003 allo wan ce Tra .008nsp orta tion allo wan ce .015 .002.003

a. Dep end ent Vari able Livi ng stan dar d

Medical Allowance:
From the statistically analysis, it is appeared that most of garment workers thinking about their Medical allowance are insufficient. From the survey method, it is found that 87% of the employees seems that their Medical allowance is insignificant compared to their work.
Med ical allo wan ce

Fre Per Vali Cu que centd mul ncy Per ativ cente Per cent Vali Mod10 12.512.512.5 d erat e sign ifica nt Slig 27 33.833.846.2 ht sign ifica nt Insi 43 53.853.8100. gnifi 0 cant Tot 80 100.100. al 0 0 From the above table, it is appeared that 27 respondents Slight Satisfied and47 respondents Dissatisfied

from the 80 test units.

The statement Medical allowance is ...amount 54% think insignificant and 33% slightly significant that the Medical allowance is sufficient amount to conducted normal life. From the descriptive statistics, it is observed that Mean value 4.41, median value 4 and standard deviation are .70 when the more significant value is 1, and moderate significant value is 2. Observing this statistics, it is easily infer that the current medical allowance does not satisfactory level.

Accommodation Allowance:
From the statistically analysis, it is appeared that most of garment workers thinking about their Accommodation allowance are insufficient. From the survey method, it is found that 88% of the employees seems that their Accommodation allowance is insignificant compared to their work.
Accommodation allowance

Fre Per Vali Cu que centd mul ncy Per ativ cente Per cent Vali Mod10 12.512.512.5 d erat e sign ifica nt Ligh29 36.236.248.8 t sign ifica nt Insi 41 51.251.2100. gnifi 0 cant

Tot 80 100.100. al 0 0

From the above table, it is appeared that 29 respondents think that light significant and41 respondents insignificant from the 80 test units.

The statement Accommodation allowance is ...amount 52% insignificant and 36.2% slightly significant that the Accommodation allowance is sufficient amount. From the descriptive statistics, it is observed that Mean value 4.38, median value 4 and standard deviation are .702 when the more significant value is 1, and moderate significant value is 2. Observing this statistics, it is easily infer that the current Accommodation allowance does not satisfactory level.

Transportation Allowance:
From the statistically analysis, it is appeared that most of garment workers thinking about their Transportation allowance are insufficient. From the survey method, it is found that 91% of the employees seems that their Transportation allowance is insignificant compared to their work.
Tra nsp orta tion allo wan ce

Fre Per Vali Cu que centd mul ncy Per ativ cente Per cent Vali Neu 7 8.8 8.8 8.8 d tral Dis 32 40.040.048.8 agr

ee Stro41 51.251.2100. ngly 0 disa gre e Tot 80 100.100. al 0 0

From the above table, it is appeared that 32 respondents disagree and41 respondents strongly disagree from the 80 test units.

The statement Transportation allowance is .amount 51% think insignificant and 40% slightly significant that the Transportation allowance is sufficient amount. From the descriptive statistics, it is observed that Mean value 4.425, median value 4 and standard deviation are .651 when the more significant value is 1, and moderate significant value is 2. Observing this statistics, it is easily infer that the current Transportation allowance does not satisfactory level.

Cost of Living:

From the statistically analysis, it is appeared that most of garment workers thinking about their Cost of living are insufficient. From the survey method, it is found that 91% of the employees seem that their Cost of living is high compared to their work.
Cos li vi ng

Fre Per Vali Cu que centd mul ncy Per ativ cente Per cent

Vali M o d 2 4 3 0. 0 3 0. 0 3 0. 0 d er at el y in cr ea s e Slig 48 60.060.090.0 htly incr eas e Not 8 10.010.0100. incr 0 ea s e Tot 80 100.100. al 0

From the above table, it is appeared that 48 respondents think that slightly increase and 24 respondents moderately increase from the 80 test units. The statement Salary is as increase as cost of living 60% think slightly increase and 30% moderately increase that the Cost of living increase but salary of the workers do not increase. From the descriptive statistics, it is observed that Mean value 2.80, median value 2 and standard deviation are .603 when the dramatically increase value is 1, and moderate increase value is 2.Observing this statistics, it is easily inferred that the current Cost of living increase. Analyses of four factors which affect the standard of living, It is evident that Null hypothesis (Living standard (Medical, Accommodation, Transportation, cost of living) of Garments employees is very well.) is rejecter and alternative hypothesis (Living standard of Garments employees is low) is accepted.

Recommendation:
Garment sector is the sector to improve the economic growth of the country. So government should take effective measure to control the riots created by the garment workers. 1) Government should justify the cost of living and the money the workers earn to engage into the job. Every day cost of every ingredient increase. But salaries of the workers are not increase as cost. 2) Accommodation system should be managed or accommodation allowance could be increased. Because day by day house rent is increased and people can not easily find out the low cost house. 3) Medical allowance should be increased or medical center can be constructed by organizing surrounding companies. 4) Transportation allowance should be sufficient to commuters or own transport facilities can be available. To avoid the traffic jam own transportation can be used. 5) Pension system should be maintain so that employees can secure in the after job life. Because after the retirement workers become helpless. 6) Maternity leave should be 5 months or above with payment for two times. 7) Child care facilities should be ensured to work women attentively. 8) Motivation (monetary and non monetary) and proper entertainment system would be ensured to increase output and peace environment. 9) Recently government form new police force especially in industrial areas. The size is too small to control the situation. It should be enlarged in great number. 10) Labor unions should be worked coordinated fashion, so that interest of workers and owners maintain together. Effective labor union helps to reduce the labor unrest. Labors can express

their right through labor union. 11) Government should provide some facilities to business men and lax the term and conditions of running business easily and provide sufficient wage to the workers. 12) Profit sharing scheme and job security are ensured by the factory owners to reduce the employees dissatisfaction. If the government takes steps to reduce labor unrest in the most crucial sector such as garment sector, then government needs to concentrate above recommendations and build cooperative environment with labors and owners.

Conclusion:
The Ready-Made Garments (RMG) industry occupies a unique position in the Bangladesh economy. It is the largest exporting industry in Bangladesh, which experienced phenomenal growth during the last 30 years. RMG sector provides huge employment to the rural unemployed man and women. This sector contributes to our national economy and overall developed of our country. Garment industry largely depends on the human labor. Bangladesh is the populated country where large number labor is appointed with low cost compared with other country. But several time RMG sector trouble due to labors unrest. Garment workers strike against factory owners to get minimum salary so that they can maintain the normal life. Struggle of the garment workers is not short run or short term. They protest different places and several times. In a statistics, it is observed that seventy riots or labor unrest is taken place within three months from May to July in 1010.in these labor unrest thousands of people wounded and financially loser. Factories owners can not delivery or shipped products according to their contract to the foreign buyers. As results goodwill of Bangladesh RMG products are stumbles in the global market. After a long struggle in garment industry new salary structure is announced by the government. Lots of workers are suffered to get this minimum wage. Government forms wage board and this board decides the salary structure with several meetings in different interested parties in this industry The first minimum wage board is constituted in 1994, fixed Tk 940 as minimum wage for garment workers. The second one, formed in 2006, set the minimum wage at Tk 1662.50.But the hope of the workers does not come true. Workers demand 5000 TK as a minimum salary on the other hand government set 3000TK as a minimum salary. Every day cost of living is increased, inflation arises, and transportation cost increase. In a word cost

increases all the sector but salary does not increase as cost of living. So, employees are not happy present salary structure. RMG sector needs to free from any sorts of unrest by creating mutual understanding and win-win situation. Stability of any sector needs to maintain proper work environment, job security and accurate compensation plan. At last, it is assumed that the balance development of a country largely depends on the proper management of human resource and utilities of this resource.

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Data Collection For the assessment, both primary and secondary data was collected. For this we interviewed 5 garments company through using a structured questionnaire. Personal interview technique was applied while fill up the questionnaire on respondents. The sample garments companies who are interviewed are given in a chart: Name of the Garments Company Millenium Garments Limited
RAHAN GARMENTS (PVT) LTD

ALAM FIBER IMPEX Ltd.

FABRICS AND COMMODITIES EXCHANGE LTD. TOKIO MODEL LIMITED.

Sampling plan Garments Company of Dhaka are constitutes as the study area, because of convenience of the field work and easy communication. For the crisis condition of Bangladesh it was difficult for us to collect data form more samples. Above it, we go for different garments company and the company who intended to talk with us is taken as a sample. I tried to get rid of any kind of personal biasness and taking true information. Data analysis We analyzed the data by averaging the response of the sample. Most of the analysis and discussions of this study have been made on the basis of the information obtained from the interview with the questionnaires. Besides, observation of the interviewers has also been an important component of analysis and discussion. Scope of the Study This study has focused upon the various problems regarding with the garments company and the prospect of these industries. We have taken 5 garments company to gather data on the present situation of the garments industries as well as problem regarding and the future of the industries.

9 |P a g e

Limitations of the Report Since our study is based on both primary and secondary data, there is a possibility of getting fake information. If the surveyed personnel provide us with any fabricated information about their opinion of

their organization, then the report findings may be erroneous. Above all, this study is weak in some

points. The notable ones are as under: . The survey was conducted in a very short time so we were not able to collect more

information. This survey made on crisis situation of Bangladesh, so it was difficult to collect more samples. . . Only the big and the reputed Garments Company consider here as sample. The questionnaire contains some questions that, if answered properly, might

damage the company's image. In this type of questions, the respondents might provide socially acceptable answers. This risk was unavoidable. . Another limitation of this study is the person's private information were not

disclosing some, data and information for obvious reasons, which could be very much useful. . . Lack of experience in this field. Lack of proper authority to conduct the interview program.

Analysis Technique & Report Writing At first, we went to different garments company and collect information from the personnel. In preparing this report, we approached according to the following procedure: 10 | P a g e Select the topic Conduct survey Sorting information Analysis and evaluation of the information Report writing and presenting For Bangladesh, the readymade garment export industry has been the proverbial goose that lays the golden eggs for over fifteen years now. The sector now dominates the modern economy in export earnings, secondary impact and employment generated. The events in 1998 serve to highlight the vulnerability of this industry to both internal and external shocks on the demand and supply side.

Given the dominance of the sector in the overall modern economy of Bangladesh, this vulnerability should be a matter of some concern to the policymakers in Bangladesh. Although in gross terms the sectors contributions to the countrys export, earnings is around 74 percent, in net terms the share would be much less partially because the backward linkages in textile have been slow to develop. The dependence on a single sector, no matter how resilient or sturdy that sector is, is a matter of policy concern. We believe the policymakers in Bangladesh should work to reduce this dependence by moving quickly to develop the other export industries using the lessons learned from the success of apparel exports. Support for the apparel sector should not be reduced. In fact, another way to reduce the vulnerability is to diversify the product and the market mix. It is heartening to observe that the knit products are rapidly gaining share in overall garment exports as these products are sold in quotafree markets and reflect the strength of Bangladeshi producers in the fully competitive global apparel markets. Preliminary data and informal evidence indicate that this sector seems to have weathered the devastating floods relatively well. The industry is one hundred percent export-oriented and therefore insulated from domestic demand shocks; however, it remains vulnerable to domestic supply shocks and the smooth functioning of the banking, transportation and other forward and backward linkage sectors of the economy. The Dhaka-Chittagong road remains the main transportation link connecting the production units, mostly situated in and around Dhaka and the port in Chittagong, where the raw material and the finished products are shipped in and out. Despite increased dependence on air transportation, trucks remain the main vehicles for transporting raw materials and finished products for Bangladesh garment exports. The floods disrupted the normal flow of traffic on this road. Eventually, this road link was completely severed for several days when large sections of the road went under water for a few weeks during the latter phase of the floods. This delinking of the road connection between Dhaka and the port in Chittagong was as serious a threat as one can imagine for the garment exporters. The industry responded by calling upon the Bangladesh navy to help with trawlers and renting a plane from Thai Air that was used to directly fly garment consignments from the Dhaka airport to the Chittagong airport several times a day. 11 |P a g e

The Bangladesh Garment Industry

Picture: Garments products of Bangladesh Contribution of the RMG Industry RMG business started in the late 70s as a negligible non-traditional sector with a narrow export

base and by the year 1983 it emerged as a promising export earning sector; presently it 12 | P a g e

contributes around 75 percent of the total export earnings. Over the past one and half decade, RMG export earnings have increased by more than 8 times with an exceptional growth rate of 16.5 percent per annum. In FY06, earnings reached about 8 billion USD, which was only less than a billion USD in FY91. Excepting FY02, the industry registered significant positive growth throughout this period In terms of GDP, RMGs contribution is highly remarkable; it reaches 13 percent of GDP which was only about 3 percent in FY91. This is a clear indication of the industrys contribution to the overall economy. It also plays a pivotal role to promote the development of other key sectors of the economy like banking, insurance, shipping, hotel, tourism, road transportation, railway container services, etc. A 1999 study found the industry supporting approximately USD 2.0 billion worth of economic activities (Bhattacharya and Rahman), when the value of exports stood at a little over USD 4.0 billion. One of the key advantages of the RMG industry is its cheap labor force, which provides a competitive edge over its competitors. The sector has created jobs for about two million people of which 70 percent are women who mostly come from rural areas. The sector opened up employment opportunities for many more individuals through direct and indirect economic activities, which eventually helps the countrys social development, woman empowerment and poverty alleviation. Exporting Condition of Garments Industry The Ready-Made Garments (RMG) industry occupies a unique position in the Bangladesh economy. It is the largest exporting industry in Bangladesh, which 13 | P a g e

experienced phenomenal growth during the last 20 years. By taking advantage of an insulated market under the provision of Multi Fibre Agreement (MFA) of GATT, it attained a high profile in terms of foreign exchange earnings, exports, industrialization and contribution to GDP within a

The Agreement on Textile and Clothing (ATC) introduced in 1994, aimed at bringing textiles and

short, span of time. The industry plays a key role in employment generation and in the provision of income to the poor. Nearly two million workers are directly and more than ten million inhabitants are indirectly associated with the industry. Over the past twenty years, the number of manufacturing units has grown from 180 to over 3600. The sector has also played a significant role in the socio- economic development of the country. clothing within the domain of WTO rules by abolishing all quotas by the end of 2004. It provides an adjustment period of 10 years, so that countries affected by the MFA could take the necessary steps to adjust to the new trading environment. Liberalization of trade following the Uruguay Round agreement presents opportunities as well as challenges for a developing country like Bangladesh in RMG sector. In the Post-Uruguay Round period, traditional instruments of trade policy such as tariffs, quotas, and subsidies will become less feasible and less relevant. In a liberalized trade regime, competition among textiles and clothing exporting countries is likely to become intense. The objective of this paper is to identify the prospects of RMG industry after the MFA phase out by analyzing the current scenario along with different policy measures and the available options in order to be more competitive in the new regime. The export, made by Garments Industries of Bangladesh is improving year after year except some of the year. Strike, layout, shutdown of company, political problem, economic problem, inflation etc. are the prime cause of decreasing export in this important sector. But above it, Readymade Garments Industries is the leading sector in export sector. Year Export (in US $ million) Percentage change 1991- 92 624.16 32.49 1992- 93 866.82 38.88 1993 - 94 1182.57 36.43 1994-95 22.19 1995 - 96 1555.79

1445.02 7.67
1996 - 97 2228.35 43.47 1997 - 98 2547.13 14.11 14 | P a g e

Problems and Prospect of Garments Industry in Bangladesh and the Supportive Policy Regime/ Current State of Affairs
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Aai-em Jewelleft a comment is reading Problems and Prospect of Garments Industry in Bangladesh and the Supportive Policy Regime/ Current State of Affairs. 09 / 12 / 2010

Tamim Emdadulleft a comment 1 am traying to know more and more about guarments sector 08/31/2010 07323583left a comment Problems and Prospect of Garments Industry in Bangladesh 03/31/2010

Rahman_Saki_167left a comment thnx 4 published this report,this report 2 / 19 / 2010

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thnx 4 published this report,this report helpful 4 all textile eng. 2 / 16 / 2010 Upload a Document Search Documents Follow Us! scribd.com/scribd twitter.com/scribd facebook.com/scribd About Press Blog Partners Scribd 101 Web Stuff Scribd Store Support FAQ Developers / API Jobs

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