By VIKAS BAJAJ
New York Times
http://www.nytimes.com/2010/07/17/business/global/17textile.html?_r=1&hp=&pagewanted=print
GAZIPUR, Bangladesh — The eight-lane highway leading from the Bangladeshi capital, Dhaka, narrows repeatedly as it approaches this town about 30 miles north, eventually depositing cars onto a muddy, potholed lane bordered by mangroves and small shops.
But this is no mere rural backwater. It is the sort of place to which foreign manufacturers may increasingly turn, if the rising wage demands of factory workers in
Already, in factories behind steel gates and tall concrete walls, tens of thousands of workers, most of them women, spend their days stitching T-shirts, pants and sweaters for Wal-Mart, H&M, Zara and other Western retailers and brands.
One of the Bangladeshi companies here, the DBL Group, employs 9,000 people making T-shirts and other knitwear. Business has been so good that the company is finishing a new 10-story building with open floors the size of soccer fields, planted with row after row of sewing machines.
"Our family needed the money, so we came here," said Maasuda Akthar, a 21-year-old sewing machine operator for DBL.
As costs have risen in
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The flow of jobs to poorer countries like Bangladesh started even before recent labor unrest in China led to big pay raises for many factory workers there — and before changes in Beijing's currency policy that could also raise the costs of Chinese exports. Now, though, economists expect the migration of
And while workers in Bangladesh and other developing countries are demanding higher pay, too — leading to a clash between police and protesters earlier this week in a garment hub outside Dhaka — they still earn much less than Chinese factory workers.
"The Chinese firms that are beginning to get into trouble are producing textiles, rubber footwear and things like that," said Barry Eichengreen, a professor of economics and political science at the
But
China's combination of a vast population of migrant workers, many with at least elementary school educations, along with modern roads, railways and power grids in its industrial provinces, has bestowed it with manufacturing capabilities that countries like Bangladesh cannot offer.
Most of
The country has a literacy rate of only 55 percent — compared with more than 92 percent in
Despite its handicaps,
Among developing countries,
And with nearly 70 million people of working age,
Still, some of the changes in
But a stronger renminbi could also hurt
And as in
Garment workers are demanding a 200 percent increase in the minimum wage, to 5,000 taka (about $71) a month — which is how much workers with several years of experience now earn. The government, which plans to announce a new minimum wage soon, last increased it in 2006, to 1,662.50 taka (about $24). Since then, inflation has been as high as 9.9 percent a year.
"Most garment workers live in slum areas where one room costs 2,000 to 3,000 taka," said Mushrefa Mishu, president of the Garment Workers' Unity Forum, an association that claims to represent more than 60,000 members.
Labor leaders want the government to make it easier for workers to form unions — very few factories are unionized today — and to require higher safety standards and better working conditions.
In January, H&M, Wal-Mart, Gap, Tesco and other Western clothing buyers asked the Bangladeshi government to raise the minimum wage and reset it every year, although the group did not specify what the wage should be. A spokeswoman for H&M, Malin Bjorne, said the company was willing to pay more for clothing to help support higher wages. It is unclear whether other companies would do the same.
But factory owners here argue that a big increase in wages would make them uncompetitive against
"If it's 5,000 taka, I would close all my factories," said Anisul Huq, a former head of the Bangladeshi garment industry's trade group and a factory owner whose customers include H&M and Wal-Mart. "Even if it's 3,000 taka, lots of factories will close within three or four months."
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