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Image from aljazeera.net

Garment workers are staging mass demonstrations and strikes in Bangladesh. A major part of Bangladesh’s foreign currency reserve comes from the contracts the country gets from foreign garment companies. The workers are demanding that their minimum salaries be increased from about 45 USD a month to 70 USD a month. (Factories are not honouring even the existing minimum wage.)

There are some concerns about viability of that demand. The argument goes as follows: if the salaries are increased to 70USD/month, then the businesses won’t be profitable anymore.

That’s entirely untrue. Paying 70USD to a worker in a month is not going to make the businesses unprofitable. What the businesses are worried about is that their profits will decrease.

One must remember that income disparity in Bangladesh is extreme. There are the very rich who send their children abroad to study, buy foreign cars and smoke foreign cigarettes. Most Bangladeshis don’t have money to buy enough food.

Because there is so little infrastructure and heavy (or otherwise) industry in Bangladesh, the rich don’t spend in their own country. When they spend, they help foreign economies and foreign companies.

If minimum salary is increased then the poor will have more money at hand, and they will spend them on basic necessities- causing that money to flow in the local economy. Helping local businesses/producers and manufacturers. Evantually the quality of life of the middle class will also rise because of the general increase of income.

So I’m all for the increase.

At another level, however, a more urgent problem is Bangladesh’s tax structure and the tax collection system. If the wealthy pays their fair share of taxes, then that money goes to the government and is spent locally. Good thing is (Alhamdulillah), the government is solvent at the moment and not dependent on foreign aid.

Wa’Allahu ‘Alim.

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