Demands for a living wage in low income garment manufacturing hubs like Bangladesh have been dismissed as 'nonsense' by a leading free market proponent and fellow of the Adam Smith Institute in London. The comments by journalist Tim Worstall were made in the context of continued factory closures and strikes in Bangladesh by garment workers who are asking for significant increase in minimum wages that are currently the lowest in the world.
Worstall claims the only way to increase wages in poor countries such as Bangladesh, where incomes and wages are low, would be to increase the GDP. He says to drive up minimum wages over GDP per capita is unethical and not one of the things the universe allows one to do.
He suggests wages are low because productivity is low and the only solution to low wages was to increase productivity. When the average value added of labour is the same as it is in the US, everyone will be getting paid US wages. He dismissed calls for a 'living wage' by organisations such as the Asia Floor Wage Alliance. In a lighter vein he says that since people are living on those wages, obviously it is possible to live on those wages. He later stated that the people who are asking for ‘Living wages’ mean is that wages should be high enough to afford the standard of living which the campaigners desire people should have.