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The Centre for Policy Dialogue (CPD) on Saturday recommended a minimum monthly wage of Tk 22,776 for workers of the country's tannery industry considering the rising cost of living.
However, the industry leaders said it would not be possible for them to implement the recommendation due to a downtrend in their business.
The local research think tank put forward the suggestion based on a study titled "Minimum Wage for the Bangladeshi Tannery Industry in 2024: An Empirical Analysis".
It shared key findings at an event titled "Determination of New Minimum Wage of Tannery Industry: Challenges of Implementation" at its office in the city.
The government set up a minimum wage board for the tannery industry late last year to revise the existing minimum wage. The board consists of representatives from both employers and workers to negotiate proposals concerning the minimum wage.
Conducting empirical analysis on the structure and composition of wages of the tannery industry is often considered useful.
The CPD, in partnership with the Leather Development Forum (LDF) and the OSHE Foundation, conducted the study to propose a minimum wage and review the performance of key indicators relevant for the setting up of minimum wage as stipulated in Bangladesh Labour Act (BLA).
The research leading to these recommendations was spearheaded by Dr. Khondaker Golam Moazzem, Research Director at CPD, with Senior Researcher Tamim Ahmed presenting the keynote paper at the event.
The study targets to analyse the performance of different indicators related to enterprises and workers as per the BLA (2006) and propose a new minimum wage for the tannery industry.
The main source of primary data was a survey conducted on 35 tanneries and 105 tannery workers (maximum variation sampling). All the surveyed tanneries are located in BSCIC Hemayetpur Tannery Estate.
Presenting the findings, CPD Senior Research Associate Tamim Ahmed said the study was based on factors such as food and non-food costs, the number of family members, and the number of earning members.
Amidst rising living costs, the think tank recommended a minimum monthly wage for grade-5 workers be set at Tk22,776, showing a substantial rise from Tk 13,500 determined in 2018.
Highlighting the financial burdens faced by these workers' families, who on average consist of 4.6 members with only 1.5 earning members, the CPD calculated that the combined monthly cost for food and non-food expenses amounts to Tk 33,478. The proposed wage is designed to better meet these living costs.
The proposed wage calculation also considers the income of other family members, reflecting a comprehensive approach to wage determination in the current economic context.
Additionally, the CPD suggested an overhaul of the wage grading system and proposed a unified grading system to replace the various wage boards and Collective Bargaining Agreement (CBA) grades currently in place.
This system would streamline into five distinct grades, with even the highest grade, Grade 1, having a suggested minimum wage of Tk 39,270.
Further reforms include adjusting housing allowances and other wage components as percentages of the basic wage, rather than fixed amounts, to provide more equitable compensation relative to wages.
Also, to improve the transparency and efficiency of wage disbursement, the CPD recommended paying wages through Mobile Financial Services (MFS), which could help reduce irregularities.
The CPD addressed the issue of contractual employment in the tannery sector, suggesting a cut in hiring contractual workers, either directly or through third-party arrangements, to ensure that all workers receive the full wages to which they are entitled.
These proposed reforms aim to foster a fairer and more transparent tannery industry, ensuring that workers are compensated adequately for their contributions to the sector.
However, the Bangladesh Tanners Association Chairman Shaheen Ahmed said it would not be possible for them to implement such a proposal as the industry was passing through an economic hardship.
"We are not doing well … implementation of such a minimum wage is not possible in this state," he said, citing the current situation of the industry.
He said the industry is struggling with rising costs of utilities such as electricity and gas, which is pushing up the production cost significantly and making it financially unfeasible to implement such a recommendation.
Mr Shaheen also pointed out that the ongoing operational challenges at the Savar Tannery Industrial Estate have forced the tanners to sell their leather products at reduced prices to non-compliant buyers, primarily in China.
These factors combined, he argued, left the tannery owners with limited financial flexibility to meet the increased wage demands without compromising the viability of their operations.
Chairman of the Minimum Wages Board Liaquat Ali Mollah said the minimum wage will be decided by the board.
In response to a question about tannery owners' mindset, he said: "The workers are like family members … their welfare should be taken care of."
He also urged the tannery owners to seek higher prices from buyers as they have to increase the price of workers. Tannery Workers Union General Secretary Abdul Malek said that they are not only protecting the interest of workers, but also protecting the interest of the industry owners.
He said the owners didn't implement the recommendations of the last wage boards, and agreements with the owners.
He said the union demanded Tk 25,000 as minimum wage.
Admitting sluggish business, Tannery Workers Union President Abul Kalam Azad said the minimum wage has to be implemented considering the inflation and other needs irrespective of whether the owners are making profit or not.