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Paper 106 – Minimum Wage in the RMG Sector of Bangladesh: Definition, Determination Method and Levels

CPD Working Paper Series

Contributors: Khondaker Golam Moazzem and Saifa Raz

Publication Period: February 2014

Minimum wage in the RMG sector of Bangladesh is a debated issue, mainly due to lack of operational definition and method for calculation. This study is undertaken to  come up with a definition and method for calculation of the minimum wage based on the ILO Minimum Wage Fixing Convention, 1970 (No. 131).

The underlying principle of this definition is that minimum wage should be sufficient enough to meet the basic needs of workers and their families, and should provide some discretionary income. Based on the definition, the minimum wage has been estimated under three scenarios – poverty line, actual expenditure and aspirational diet. Considering the industry’s capacity, the study proposed a phase-wise implementation of the minimum wage under which about 80 per cent of the proposed wage (Tk. 8,200) equivalent to Tk. 6,500 could be provided in the first phase.

 

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