Even after the latest wage hike for apparel workers effective next month, labor costs in Bangladesh for manufacturing clothing products are among the lowest in the world. The edge gives manufacturers a definite competitive advantage in export markets. Cheap labor is one of the strong factors behind the success of Bangladesh in apparel exports.

Apparel workers in Bangladesh are still the lowest paid by global standards. Labor in Bangladesh is still cheap and the average monthly wage is just 101 dollars, compared with 135 dollars for Myanmar, 170 dollars for Cambodia, 234 dollars for Vietnam and 518 dollars for China. However, this advantage is being eroded due to a rise in production costs, rise in wages and investment for safety improvement.

For the moment, policy support including cash incentives, duty exemptions are factors that are helping the sector remain competitive in export destinations. Technical training and workers’ dedication will increase productivity, but there has to be motivation. Health, education, technical training and motivation are needed to this end, where Bangladesh is weak.

Technological development will help increase productivity but the challenge is that the introduction of technology will cut employment though productivity will increase for those who remain on the job.