Strategic Management

Topics: Wage, Minimum wage, Employment Pages: 10 (3732 words) Published: May 5, 2013
Working Conditions of RMG Sector of Bangladesh
In recent years, labor unrest in RMG sector of Bangladesh has been a matter of serious concern. The RMG industry of Bangladesh started its modest journey in late 1970s and within three decades, it has been a flourishing sector. Contribution of the RMG sector in national economy is great. It is the highest foreign exchange earning sector. It has been able to create employment opportunities for about 3.5 million of people, most of whom are poor, uneducated and unskilled women from the rural area. Besides, it has been able to attract foreign direct investment, accelerate industrialization process, alleviate poverty to a certain extent and create a good image of Bangladesh in the world. To a certain extent, it has been able to bring about a positive change to the socio-economic condition of the country. But this sector is infested with a number of problems which are threatening the very existence of this industry. Labor unrest is one of the serious problems. The RMG sector of Bangladesh has emerged entirely through private entrepreneurship. But it is not beyond government or public concern. In all respect, it is a huge industry. Solving labor unrest in the RMG sector is not an easy task. It requires a collective effort. As the sector involves stakeholders from both public and private sector, cooperation between these two sectors can be a better option to solve the problem. Four areas regarding labor unrest in the RMG sector such as i) investigating the incidents of labor unrest, ii) maintaining law and order situation, iii) bridging gap between owners and workers and iv) representation of the work-force in the decision-making process are identified where public and private sector can work together to solve the problem. The major causes of labor unrest have been explored from the responses of the respondents. These are- irregularities in payment, low wage, mistreatment of the workers by managers/ officers, rumor, absence of trade unionism, conspiracy, non-execution of labor laws, unruly nature of the workers and political intervention. In key issues regarding labor unrest such as investigating the incidents of labor unrest, bridging the gap between the factory owners and workers, improving law and order situation, majority of the respondents want the involvement of ‘tripartite committee’ (a committee formed by the representatives of Government, factory owners and workers) which indicates a bright prospect of public-private cooperation in addressing labor unrest in the RMG sector of Bangladesh. If private sectors with their first-hand knowledge and experience cooperate with public agencies having power and authority, labor unrest in the RMG sector of Bangladesh is supposed to be solved. More than 78% of Bangladesh’s export earnings come from the garment industry. The ready-made garments (RMG) sector has a greater potential than any other sector in terms of employment and foreign exchange earnings to reduce poverty and make a contribution to the national economy. However working conditions in this vital sector are poor. Bangladesh’s RMG factories fall short on 'social compliance'. That is, they do not comply with labor practices that ensure the social welfare of their employees. Bangladesh's garment industry provides employment to about than 3.6 million workers which 2.8 million are women. Workers in these garment factories are almost always illiterate. They have very limited knowledge of human rights, working conditions and labor standards. Despite the phenomenal success of the RMG sector, poor working conditions in the factories and a lack of Social compliance are serious concerns which have, since 2006, led to labor unrest and damage to institutions and property. As a result, there is a rising fear in Bangladesh that the readymade garments sector may face a decline in demand. Social compliance in the RMG industry is a key requirement for most of the world’s garments buyers. It...
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