Centre for Policy Dialogue (CPD) organised a Dialogue on “Ongoing Upgradation in RMG Enterprises: Results from a Survey” held on March 3, 2018 at Khazana Gardenia Banquet Hall in Dhaka. Dr Khondaker Golam Moazzem, Research Director of CPD has presented the keynote of the study.
Published in The Daily Star on Sunday, 4 March 2018
Women losing more jobs to automation: CPD study
Star Business Report
The automation of manufacturing reduced the female workers’ participation ratio in the garment sector to 60.8 percent in 2016 from 64 percent in 2015, according to a study by the private think-tank Centre for Policy Dialogue.
The deceleration of female workers’ participation meant the ratio of male workers is on the rise because the factory owners think female workers are not able to handle modern machineries properly, said Khondaker Golam Moazzem, research director of the CPD.
In 2015, the female to male workers’ participation ratio was 64:36, but it has now declined to 60.8: 39.2, according to Moazzem.
The owners have been upgrading the factories by installing modern machineries mainly to maintain the strict lead-time set by international retailers.
Some 47.37 percent of large enterprises and 25 percent medium enterprises used advanced technologies, Moazzem said yesterday while presenting the study on the ongoing upgradation in garment factories.
Female workers are proportionately less knowledgeable about operating different machines compared with their male counterparts, according to the study prepared by surveying 193 garment enterprises and 2,123 workers.
The study found that investment in the sector increased after the Rana Plaza building collapse.
Both the entrepreneurs and buyers have kept their confidence in Bangladesh’s garment sector, which created additional employment at a time when workers were losing jobs due to closure of a good number of factories.
Some 41 percent of the enterprises surveyed operate in rented spaces and about 34 percent in shared building.
About 16 percent of the entrepreneurs surveyed have mentioned that they will either relocate or close the factory within 1 to 5 years.
The employment growth in the garment enterprises has somewhat decelerated in recent years, the study found.
The average yearly growth of employment in the sample enterprises during 2012-16 was 3.3 percent, down from 4.01 percent during 2005-2012.
The survey found 16 percent of the sample enterprises employed foreign staff. According to the survey result, the workers’ monthly wage on average is Tk 7,270 for male and Tk 7,058 for female, excluding the bonuses.
Most of the firms have workers’ participation committees (WPC); trade unions are almost non-existent in only 3.3 percent of the surveyed factories. According to the amended labour act 2013, members of the WPC shall be elected. Some 68.9 percent of the WPCs mentioned that workers in their factories have been elected by votes.
Regarding the trade unions and wage hike of the workers, Rehman Sobhan, chairman of the CPD, advised the trade union leaders to stay united.
“You have to act together. You need to jointly bargain,” he said, while citing the major industrial action taken by the jute workers in the 1960s as an examples.
They could do this jointly because they had the power to act together, said Sobhan, who chaired the event.
The bigger garment groups are well ahead in their employment of modern technologies, while the medium factories are lagging behind, said Debapriya Bhattacharya, distinguished fellow of the CPD.
“Some small factories will have to finally get out of this business,” he said.
Babul Akter, president of the Bangladesh Garment and Industrial Workers Federation, said although the number of trade unions in the garment sector is high their quality is low.
Akter demanded Tk 16,000 as the minimum wage in the next revision of the wage structures.
Siddiqur Rahman, president of the Bangladesh Garment Manufacturers and Exporters Association, said the wage board will determine the salary of the workers based on the workers’ necessity and competitiveness.
Published in Dhaka Tribune on Sunday, 4 March 2018
Women’s participation in RMG workforce declines
Trade union leaders and experts called for training to make female workers capable of operating advanced machinery
The ratio of female workers’ participation in the RMG sector, known as a women-driven sector, has seen a decline in the recent years, a survey report says.
The survey, titled “Ongoing Upgradation in RMG Enterprise: Preliminary Results from a Survey” conducted by the Centre for Policy Dialogue (CPD), was released on Saturday in Dhaka.
According to the survey, the there are 3,596 active RMG factories in Bangladesh with 3.5 million workers, of which 60.8% are female and 39.2% are male. In the previous survey in 2015, the workers were 36% male and 64% female.
The survey was conducted on 2,270 workers in 193 factories in small, medium and large categories in Dhaka, Gazipur, Narayanganj and Chittagong.
“The employment growth in the RMG sector has decelerated. In 2012-2016 period, the employment growth was 3.3%, which was 4.01% in 2005-2012 period,” Khondaker Golam Moazzem, CPD research director, said in his presentation.
One concern is that female workers are less knowledgeable about technology, which is deceasing their participation in the workforce, the survey said.
“Female workers are proportionately less knowledgeable about operating different machines compared to male workers,” said Moazzem.
Trade union leaders and experts called for training to make female workers capable of operating advanced machinery.
Uneven progress in innovation
In social compliance issues in Bangladesh RMG sector has seen considerable progress but in economic issues, upgradation has been slow, the report said.
Upgradation in social issues has been significant due to pressures from rights groups and buyers.
“The upgradation is most prominent in case of social issues, particularly with regard to standards, non-discrimination, training facilities, employment contracts, trade union recognition, workplace safety, assurance of retrenchment benefits and employability but very poor in terms of rights,” said Moazzem.
In contrast, economic upgrading are behind because of poor performance in product development, functional upgradation, forward marketing research and innovation and designing products, he added.
Large enterprises are ahead of medium and small enterprises in all forms of upgradation.
Moazzem said this uneven development can have an impact on overall competitiveness, especially that of small and medium enterprises.
“In today’s free market economy, buyers will source products from where they get lower prices. But there are some constraints in Bangladesh regarding lead time as well as infrastructure,” said Siddiqur Rahman, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
“I am hopeful that Bangladesh will be able to approach buyers with its own designed products within the next two or three years when compliance issues are over,” said Siddiqur.
Skills in Bangladesh has not reached a level where factory owners can negotiate with buyers individually, he said. As a result, buying houses are taking advantage of it.
The survey found considerable presence of foreign professionals in different sections including merchandising (20.3%), production planning (37.3%), sewing, knitting, washing, quality assurance, finishing, maintenance, admin, industrial engineering and research and innovation.
“There are skilled and experienced workers in the country, but owners are not recruiting them,” said Babul Akter, a trade union leader.
Talking on the formation of unions, Babul said it has happened due to the demands of NGOs and buyers.
“The number of unions has increased but not the quality. The unions mostly exist in small and mid-size factories and rarely in big factories,” he said.
“The progress has happened in safety but not in workers’ rights.”
A large share of RMG enterprises were established during 2013-2016 after the collapse of Rana Plaza, which created additional employment at a time when workers were losing jobs due to closure of many factories, the study said.
As of now, 41% of all factories are operated in rented spaces, 34% in shared buildings, 63% in purpose-made buildings and 37% in non-purpose-made buildings.
An interesting finding was that the owners are increasingly allowing factory management to take part in the decision making process. Mainly in production planning, target setting and workers’ grievance. But the owners are still playing the major role in price negotiation with the buyers.
Concentration of power
In the survey, it was found that there is a growing concentration of RMG enterprises under different business conglomerates and the role of RMG investment growth is defined by these conglomerates. About 61% of enterprises are sister concerns of different enterprises.
It would provide financial and non-financial benefits to subsidiary companies, the survey noted.
As per the survey findings, there is a 3% gap between male and female wage but it is at a limited level. Average monthly wage of male workers is Tk7,270, while it is Tk7,058 for female workers.
As per the findings of the survey the use of advanced technology in the RMG sector is mostly seen in the large enterprises.
The survey showed, 20% factory have advanced technology, while 41% have moderate technology and 47% large and 25% medium enterprises use advanced technology.
The study found that the relationship between price and upgradation is rather weak both in case of economic and social upgradation.
The prices of products are influenced by different factors such as slowdown of global demand for apparels and excess lead time.
Workers individual efficiency varies widely. The average level of efficiency is 62.2% and over 50% workers have an efficiency level higher than 60%.