Bangladesh is currently experiencing significant unrest, driven by a mix of long-standing economic frustrations and recent policy changes. The immediate spark for the recent turmoil was the government’s decision to allocate 30 percent of job quotas to the descendants of freedom fighters. This move, while impactful, was merely the latest in a series of grievances that have been simmering for years. The country’s growing economic distress, characterized by rampant youth unemployment and persistently low minimum wages, has been a major source of discontent.
The economic challenges in Bangladesh are severe. Workers in the country face some of the lowest minimum wages globally. In 2022, the minimum wage, when adjusted for purchasing power parity (PPP), was reported to be just US$ 45. This is starkly low compared to the average minimum wage of US$ 791 across 110 countries. The garment industry, a cornerstone of the Bangladeshi economy and the third-largest supplier of garments globally, has not alleviated these issues. Despite its economic significance, wages in this sector have remained stagnant.
A 2023 report from the Anker Research Institute highlights the disparity between wages and living costs in Dhaka. In 2016, the average household income in the city was 16,450 Bangladeshi taka, while living expenses were 25,990 taka. By 2023, although the net living wage had risen to 25,462 taka, family expenses had also increased to 40,228 taka. This persistent gap underscores the financial strain many households are under.
The international community has also taken note of these issues. In October 2023, major apparel and footwear companies, including Adidas, Puma, Gap, and Levi Strauss, sent a letter to the then-Prime Minister Sheikh Hasina urging immediate action on wage reforms. They emphasized that the average monthly net wages for garment workers had not been adjusted since 2019, despite significant inflation. Their letter recommended an annual wage review mechanism to better align wages with inflation and the basic needs of workers.
Domestically, the frustration with wage levels has been palpable. Last year, garment workers and their unions called for a substantial increase in the minimum wage, demanding a rise from 8,000 taka (approximately Rs 5,700) to 23,000 taka (about Rs 16,400). However, the government’s wage board, which includes factory owners, proposed a more modest increase to 10,400 taka (Rs 7,400). This proposal was widely criticized, and in December 2023, the minimum wage was revised to 12,500 taka (around $113 or Rs 8,900). Despite this adjustment, many felt that the increase was insufficient given the rising cost of living.
Inflation has exacerbated the economic challenges. It rose from 5.5 per cent in 2021 to 7.7 per cent in 2022, and spiked to an alarming 9.9 per cent in 2023. This high inflation rate has further strained household budgets, adding to the economic pressure on many families.
Youth unemployment has also been a persistent issue. The unemployment rate for young people has remained above 15 per cent since 2020. This high rate of unemployment, combined with low wages and rising inflation, has contributed to widespread frustration and unrest among the population.
The culmination of these economic issues and the contentious quota policy led to widespread protests and riots. The situation reached a critical point on August 5, when Prime Minister Sheikh Hasina was forced to flee the country. The unrest reflects deep-seated dissatisfaction with the government’s handling of economic issues and highlights the urgent need for comprehensive reforms. Addressing both wage disparities and unemployment will be crucial in restoring stability and addressing the grievances of the Bangladeshi people.
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