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Cablegate: National Wage Board Offers Increased Minimum Wage

VZCZCXRO0070
OO RUEHBI RUEHCI RUEHHM RUEHJO RUEHMA
DE RUEHKA #6299 2891003
ZNR UUUUU ZZH
O 161003Z OCT 06
FM AMEMBASSY DHAKA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2168
INFO RUCNCLC/CHILD LABOR COLLECTIVE
RUEHIL/AMEMBASSY ISLAMABAD 1318
RUEHNE/AMEMBASSY NEW DELHI 9407
RUEHLM/AMEMBASSY COLOMBO 7608
RUEHKT/AMEMBASSY KATHMANDU 8757
RUEHLO/AMEMBASSY LONDON 1542
RUEHUL/AMEMBASSY SEOUL 0254
RUEHKO/AMEMBASSY TOKYO 1066
RUEHLB/AMEMBASSY BEIRUT 0036
RUEHCI/AMCONSUL CALCUTTA
RUCNDT/USMISSION USUN NEW YORK
RUEHIN/AIT TAIPEI 0080
RUEHC/DEPT OF LABOR WASHDC

UNCLAS DHAKA 006299

SIPDIS

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: ELAB ETRD PGOV BG
SUBJECT: NATIONAL WAGE BOARD OFFERS INCREASED MINIMUM WAGE


1. (SBU) On 12 October, the National Wage Board, composed of
representatives from labor, government and management,
announced what they insisted was the Board's final
recommendation to increase the minimum wage for garment
workers from 930 to 1,662.50 taka (25 USD) per month. If
approved by the GOB, and published in the official gazette,
the increased minimum wage would be the first increase since
1994.

2. (SBU) After the labor violence that started May 22, the
GOB acted to resolve worker issues. On 31 May, the GOB
created a National Wage Board to recommend a new wage
structure, and on June 12, management and labor agreed to a
MOU to consider worker demands. At the time, media reported
that workers demanded a new minimum wage of 3,000 taka a
month.

3. (SBU) Both workers and management rejected initial draft
National Wage Board increases, which varied from an increase
of 1,350 taka to an increase of 2,000 taka. Labor termed
the increases saying too small, and management called them
too large and would result in factory closures.

4. (SBU) In the wake of renewed labor unrest on October 10,
Levi's Country Sourcing Manager Ranah George Abraham opined
to laboff that the Bangladesh Garment and Manufacturer's
Export Association (BGMEA) would probably accept an increase
in the 1700 taka range, as would labor, but the increased
minimum wage would come at the cost of reduced step increases
for more experienced workers. He said that the workers who
did participate in the street violence were not part of the
labor organizations that participated in the National Wage
Board, so they refused to accept its authority. "By and
large, workers would be content with some increase and a
promise that there would be an annual review for a salary
increase," he said.
PASI

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