Centre for Policy Dialogue (CPD) has recommended a minimum wage of Tk22,776 for tannery industry workers in Bangladesh considering the current state of inflation.

The think tank also recommended a gross wage of Tk39,270 for grade-1 tannery workers where basic, house rent, medical allowance, transportation and communication allowance, and children allowance are included.

It also proposed Tk33,641 for grade-2, Tk29,184 for grade -3, Tk25,980 for grade-4, and Tk22,776 for grade-5 workers.

CPD Research Director Dr Khondaker Golam Moazzem made the recommendations at a press conference at CPD auditorium in Dhaka on Saturday.

Senior research associate of the think tank, Tamim Ahmed presented a keynote paper titled “Proposal for Minimum Wage for the Bangladesh Tannery Industry in 2024.”

Minimum Wage Board Chairman Liaquat Ali Mollah, Bangladesh Tanners Association (BTA) Chairman Md Shaheen Ahmed, Tannery Workers Union (TWU) President Md Abul Kalam Azad and Vice-Chairman of OSHE Foundation Dr SM Morshed also spoke on the occasion.

Some 12 indicators including competitiveness of the industry, workers’ living cost, the standard of living, productivity, cost of production, employers’ financial capability, inflation, socio-economic conditions, and the risk involved with work must be considered in setting up the new minimum wage.

CPD proposed the 2024 minimum wage based on findings on factors such as food cost, non-food cost, number of family members, and number of earning members. “If only inflation was considered for the current minimum wage, the amount becomes Tk18,378,” said Tamim Ahmed in the keynote.

“However, as per our calculations, total food cost of a tannery worker’s family stands at Tk20,564 and Total non-food cost of a tannery worker’s family becomes Tk12,881 so total monthly cost stands at Tk33,445. Estimating wage using Anker formula, the wage stands at Tk22,776,” he said.

Tamim Ahmed informed that they conducted the survey on 35 tanneries and 105 tannery workers between February 2024 and May 2024. 

All the surveyed tanneries are located in BSCIC Hemayetpur Tannery which is home to more than 77% of the Bangladesh tanneries.

 Hazardous industry

The CPD survey showed that 39.1% surveyed workers involved in managing chemical activities, 53.3 % operating machines, 38.1% lifting heavy materials, 6.7% manual handling of materials, 79.1% tolerating high levels of noise, and 72.4% working in hot and humid conditions.

The survey also showed that 27.6% of surveyed workers received skin diseases after joining tanneries, 4.8% gastrointestinal disease, 1.9 % cardiovascular disease, 32.4% eye disease, 21.9% chronic headache, 64.8 % allergies, and 41.9% respiratory disease.

Dr Moazzem added that without ensuring a living wage for the workers of the tannery industry, achieving expected competitiveness, and productivity will be difficult.

Competitiveness also depends on ensuring occupational safety and health (OSH) of the workers, particularly for the tannery workers as they have to work in the presence of hazardous substances and chemicals, he added.

200 tanneries in the country while around 20,000 workers directly engaged in the industry. Export of leather and goods was US$1,223.62 million in FY 2022-23, a 1.73% decline from the previous fiscal year.

Export of processed skin was $123 million in the FY 2022-23, a 20% decline from the FY 2021-22.

Recommendations

To ensure consistent grading practices in the tannery industry, CPD has proposed implementing a unified grading system that incorporates all wage board and CBA-based grades into a single framework consisting of five major grades.

In the current grading structure, a worker in the tannery sector cannot get a promotion to a higher grade once that person starts working in a specified grade.

CPD recommended that the DIFE must provide distinct attention to the new minimum wage payment in conducting their inspection in the next four months.

There must be a progress report produced every four months, reviewing only the implementing status of the new minimum wage in the tannery industry.

He said the wage structure should be reformed. Besides, a digital payment system should be started to ensure accountability. And the monitor of the Department of Inspection for Factories and Establishments (DIFE) should be strengthened to ensure social compliance in the industry.

Dr Moazzem said workers are substantially unaware of wage and their grades; a large-scale industry-orien  ted training programme must be implemented in cooperation with workers, owners, and the government

Efforts should be made to promote the use of Mobile Financial Services (MFS) for paying wages to tannery workers, which would improve transparency and accountability in wage disbursement, he added.

Industry owners rule out CPD proposal

In response to the CPD recommendation of Tk22,776 minimum monthly wage, BTA Chairman Md Shaheen Ahmed termed it as “unrealistic.”

He said, “The tannery industry is currently facing a very challenging time. So, the CPD’s proposal over the tannery workers’ monthly wages is void of reality.”

BTA chairman claimed that Bangladesh Small and Cottage Industries Corporation (BSCIC) did not give them a “complete industry” in Savar.

“While production is dropping, operational cost has soared vastly,” he said, adding that the government’s withdrawal of cash incentives on export cast a negative impact on the industry.

“We want support to improve the sector,” Md Shaheen Ahmed said. Tannery Workers Union (TWU) President Md Abul Kalam Azad emphasised the government’s role in implementing the wage for workers.

“It is a formal industry running for 70 years, but we could not attain a Leather Working Group (LWG) certificate yet. So, Bangladesh cannot export leather goods to the EU.”

He said, “As a result, we cannot bargain to ensure workers’ rights. There is no alternative way to ensure compliance,” he also said.

TWU president informed that 25 tanneries advanced towards achieving the LWG certificates. “The industry is expected to get good news by the next six months.”

Minimum Wage Board Chairman Liaquat Ali Mollah said a board meeting will be held soon to determine and announce a respectable wage for tannery workers after consultation with all stakeholders.