Bangladesh wage growth drops in ’17

A file photo shows a garment worker sewing clothes at a garment factory on the outskirts of Dhaka. Growth in real wage in Bangladesh declined in 2017 after rising in two consecutive years, according to Global Wage Report 2018-19 published by International Labour Organisation on Monday. — New Age photo

Growth in real wage in Bangladesh declined in 2017 after rising in two consecutive years, according to Global Wage Report 2018-19 published by International Labour Organisation on Monday.
The report showed that the country’s wage growth in real terms (adjusted for price inflation) declined to 3 per cent in 2017 from 3.6 per cent in 2016. In 2015, the real wage growth in Bangladesh was 3.5 per cent while it was 2.4 per cent in 2014.
It also showed that Bangladesh achieved 3.4 per cent real wage growth in last 10 years (2008-17), which was lower than the regional (Southern Asia) median growth of 3.7 per cent in the period.
In the region, India, Nepal and Sri Lanka achieved higher growth in real wage than Bangladesh in last 10 years with 5.5 per cent, 4.7 per cent and 4 per cent growth respectively.
‘It’s very interesting that country’s economic growth is higher but the real wage growth is lower. It’s so as we have failed to create jobs for our educated youths,’ Centre for Policy Dialogue research director Khondoker Golam Moazzem told New Age on Monday.
He said that private sector investment was very slow while investment was taking place in the public sector in the country, which could not create enough jobs.
Moazzem said that wage growth also depended on minimum wage of workers but there were in the country many sectors outside the purview of minimum wage board.
At the same time, the wages in many industrial sectors were not reviewed properly, he added.
The ILO report said that global wage growth in real terms declined to 1.8 per cent in 2017 from 2.4 per cent in 2016.
‘Global wage growth in 2017 was not only lower than in 2016, but fell to its lowest growth rate since 2008, remaining far below the levels obtaining before the global financial crisis,’ the report read.
ILO prepared the report based on data collected from 136 countries.
The report observed that real wage growth in advanced G20 countries declined to 0.4 per cent in 2017 from 0.9 per cent in 2016 while the growth in emerging and developing G20 countries fluctuated between 4.9 per cent in 2016 and 4.3 per cent in 2017.
‘It’s puzzling that in high-income economies we see slow wage growth alongside a recovery in GDP growth and falling unemployment. And early indications suggest that slow wage growth continues in 2018,’ ILO director-general Guy Ryder said in a press release.
He said such stagnating wages were an obstacle to economic growth and rising living standards.
Countries should explore, with their social partners, ways to achieve socially and economically sustainable wage growth, Guy added.
Analysing data from 70 countries and about 80 per cent of wage employees worldwide the report said that globally women continued to be paid approximately 20 per cent less than men.
The report found that in high-income countries it was at the high end of the pay scale that the gender pay gap was wider, while in low- and middle-income countries the gender pay gap was wider amongst the lower paid workers.
‘There are wide variations among countries, with the mean hourly gender pay gap, for example, ranging from 34 per cent in Pakistan to 10.3 per cent negative in the Philippines (which would be interpreted to mean that in this country, women earn on average 10.3 per cent more than men),’ the report read.
It also found that only in Bangladesh in the globe the factor-weighted mean hourly wage gender pay gap was encouraging (-4.7 per cent).
‘Although there are some variations among countries, it seems that in many countries the gender pay gap widens gradually from the younger to the older cohorts. What is also striking is that in all but four of the countries (Australia, Bangladesh, China, Russian Federation), the gender pay gap is positive at the point of entry into the labour market,’ the report read.
Mothers tend to have lower wages compared to non-mothers, it observed.

Source: New Age.