CHAPTER 01

INTRODUCTION
The jute manufacturing sector of Bangladesh, which is one of the oldest traditional
manufacturing sectors of the country, has travelled a long way, witnessing many ups and
downs and experiencing fluctuating fortunes. This sector contributes 4.9% of total export
earnings of the country. Currently, 2,43,000 workers are employed in 26 state-owned jute
mills. Women workers constitute 18% of the total workforce of BJMC jute mills. The
demand and sale of jute products have increased many folds in domestic market through the
implementation of Compulsory Use of Jute in Packaging 2010 Act. As a result of the steps on
diversification of jute products under the supervision of Jute Diversification Promotion
Centre (JDPC), 400 successful entrepreneurs have been created of whom 60% are women. As
many as 135 varieties of jute products are being produced by these entrepreneurs. Diversified
jute products are being exported to 118 countries.
As jute industry is economically an important industry of Bangladesh, any problem this
industry faces should be studied carefully and should be removed as early as possible. At
present, the industry faces some serious problem both in public and in private sector. The
employment condition is still backward for the workers of this sector. They work for a little
wages per month, whereas the living cost of Bangladesh is much higher than that. But again
too high wage may harm this industry severely. So the purposes of this study to find the
impact of minimum wages in jute industry and recommend some solution for finding the
optimum wages for workers.

1.1 Research Objective

1. To know the basic concept of minimum wages policy in an industry.
2. To introduce the present scenario of jute industry in Bangladesh.
3. To introduce the present wage system of jute industry in Bangladesh
4. To identify production efficiency with respect to wages.
5. To explore the impact of the wage rate on the social life of employees.

1.2 Problem of statement

The global Jute market is wasting away due to various inescapable forces. Consequently, Jute
industry in the country along with workers, particularly laborers, has been negatively
impacted. There has been frequent reporting in the leading news in local and national dailies.
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Bangladesh jute farmers as well as others workers in the jute mill suffer from more than one
problem. Wage, livelihood, education, health, sickness, closure and abandonment of issues
with respect to crop yield, issues of the laborers, frequent violence and strikes across the
country are burning issues. From 2006 to 2008, the minimum wage of Jute laborers was BDT
4000 to 6000, after long bargaining with stakeholders. And this scenario is much worse in
private jute mills. The scale was not reviewed for a long period of time. In 2013 government
reviewed their payment scale but not much. The inflation rate has always been around two
digits for the last few years, so regular increases or revision of wage is indispensable in this
sector. Seeking appropriate wages and benefits has led to several labor unrest situations
recently. To calm down labor activist, the government announced the appointment of a
minimum wage board, which is yet to be implemented.

To sum up, there are four major issues in the Jute sector of Bangladesh: first, a lack of proper
definition of minimum wages in the national rules and regulations (Amended Labor Act
2013; Labor Act 2006), thus different methods for calculating the minimum wages are used
by different stakeholders; second, there is a lack of sector specific and macroeconomic
reliable data for relevant indicators; third, inappropriate government policies are in place for
wages and benefits; and fourth, there has been minimal effort from the authority to safeguard
the interest of employees and small and medium factories.

1.3 Background of the problem

In 2018, the government set minimum basic wage for the workers of state-owned factories at
Tk 8,300. But this is yet to be implemented. Many state owned jute mill were not in
production. And many of them are not willing to pay their laborer in new scale.
Beside the minimum wages for the workers of jute mills owned by private sector
entrepreneurs were last reviewed in 2013 setting with gross minimum monthly pay of Tk
4,380. It was not reviewed yet. Labor wage unrest is nothing new in Bangladesh, especially
over the last couple of years. It has caused huge losses of property, lives, and reputation as
the lifeblood of Bangladesh’s economy. Employees of that sector cannot meet their basic
needs with such minimal pay.

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1.4 Methodology and Approach
This research was conducted through a literature review and document analysis. Journals and
books on minimum wages, employee development, organization development, living
standards, and so on, were reviewed. As Bangladesh is one of the largest jute exporters in the
world, several international reports were reviewed for this research, especially from US, EU,
IMF, World Bank, and UN data sources. Besides, Reports from local governments, NGOs,
research organizations, and newspapers were also used. Data are collected on the basis of
production, employment, raw jute consumption, export earning, local sales of jute goods,
annual reports of BJMC and BJMA, statistical year book, study on jute and cotton textile
(Vol. 1) prepared by ministry of planning commission, various books and journals, etc.

1.5 Limitation of the Study

This paper has some limitations. As we know that jute industry is a very large industrial
sector, so it was not possible for me to discuss all of its area. The main limitations are as
follows:
1. Lack of data: For comparative purposes, data is the main thing. Sometime data are
available but the figure is given in different unit in BJMC and BJMA, so conversion
of data into one form to another become difficult.
2. Lack of current data: Collection of recent data in jute sector is not an easy task. So
here I used some non recent data.
3. Difference in figure: Difference in data of same type collected from different sources
had created some hazardous situation and sometime it was confusing.
4. Reliability of secondary sources: The reliability of the secondary data is not possible
to test.
5. Verifiability of data: There are some sources of data which are unreachable to be
verified.

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 CHAPTER 02

2.1 Historical Background of Jute Industry

Jute Industry played an important role in the economic development of Bengal. At the
beginning of the twentieth century, Bengal could boast of only one manufacturing industry -
jute. It employed about a half of the total industrial workforce of Bengal. In 1900-1, the
export value of jute manufactures accounted for nearly a third of the entire export trade of
Bengal.
The industry was dominated at the beginning, by Europeans and later, by Marwari. During
most of its history, three-quarters of the laborers in jute factories were non-Bengalis.
Bengalis generally occupied only the intermediate position in the industry. The raw jute for
the industry used to come from Eastern Bengal.
Prior to the establishment of the first jute mill in 1855, handloom weavers used jute fiber to
make twines, ropes, coarse fabrics for the poor, and also for fishing and for mooring vessels.
Towards the end of the eighteenth century, jute attracted the attention of the British east
India Company, which sent a consignment of jute samples to England in 1791 that were
successfully spun by flax machinery.
Several historical events were responsible for the growth of the jute industry. In 1838, the
Dutch government specified bags made of jute instead of flax for carrying coffee from the
East Indies.
The American Civil War (1861-65), on the other hand, gave further impetus to the jute trade,
as supplies of American cotton were much restricted.
The outbreak of the First World War led to a rapid increase in the demand for raw jute, since
it was used to manufacture sandbags to protect soldiers in trenches and to produce gunny
bags for carrying food grain for the army. Inevitably, the price of jute also rose sharply.
Although Bengal, particularly Eastern Bengal, was the main producer of quality raw jute, the
first jute mill was established at Risraw near Calcutta on the bank of the Hugli only in 1855,
after 20 years of mechanical spinning of jute in Dundee. The delay was due to the non-
availability of technical hands and power to drive machines. In 1854, coalmines were opened
at Raniganj.
Attracted by the easy availability of power, George Auckland, an Englishman established the
first jute mill. But he could not make reasonable profits and left the business. In 1859, the
Bornee Company founded the second mill with spinning and weaving facilities. Unlike the

4
Aucland mill, it started prospering after its establishment. Within five years it doubled its
plant size.
By 1866, three new mills were established. Between 1868 and 1873, these mills made large
profits. Five new companies started in 1874 and 8 more in 1875. Thus, Bengal experienced a
real boom in jute industry towards the end of the nineteenth century.
In sixty years between 1880 and 1940, the number of mills increased by 5 times, that of
looms by about 14 times, of spindles by 19 times, and of persons employed by 11 times (see
Table). The growth of the industry was significant during the 20 years between 1900 and
1920. During the Great Depression of 1929-33, the jute industry was severely hit since the
demand for jute goods declined drastically throughout the world.

Year Mills Looms Spindles Employment

1879-80 22 5,000 71,000 27,000

1900-01 36 16,100 331,400 114,800

1920-21 77 41,600 869,900 288,400

1938-39 110 69,000 13,70,000 299,000

Table 2.1: Growth of jute industry in Bengal, 1879-1939

After the Partition of Bengal in 1947, it was found that all jute mills of the region were in
West Bengal, which became a part of India and all major jute growing districts became part
of East Bengal, a province of Pakistan. As it had no jute mills, East Bengal faced problems
in marketing of raw jute. The problem was, however, quickly overcome by establishing jute
mills in East Bengal.
The jute industry in the public sector, by virtue of its location in East Pakistan, became the
property of Bangladesh after independence in 1971. Pakistani mill owners (about 68% of the
total loom strength) left the country, leaving the industry in disarray. Abandoned jute mills
were subject to heavy looting. The new government of Bangladesh had to take up the
responsibility of rebuilding the industry. By a Presidential order, about 85% of industries,
including all jute mills, were nationalized.
Bangladesh Jute Mills Corporation (BJMC) was formed to manage and look after all the 73
jute mills having 23,836 looms at that time. At one stage the number of jute mills under the
jurisdiction of BJMC went up to 78. BJMC had to revive the industry from a ruined position.

5
Immediately after liberation, it became very difficult to solve problem of financial hardship
of the jute industry because financial institutions were not working well. The short supply of
spares, labor unrest, wastage in production etc. shook the industry severely.
For jute industry of Bangladesh, the first two years after liberation was the period of
reorganization. The government offered cash subsidy to the industry, which amounted to Tk
200 million annually. The annual cash subsidy was reduced to 100 million since 1976-77.
Thanks to this policy and periodic devaluation of currency, Bangladesh could retain its
position of a prime exporter of jute goods in the dollar areas of export. The industry earned
profit in 1979-80, when the subsidy was withdrawn.
By December 1979, BJMC had 77 jute mills, two carpet backing mills, and two spare parts
producing units. In 1980, six twine mills were disinvested to the private sector. In June 1981,
BJMC had 74 mills under its administration. These mills had about 165,000 workers and
27,000 managerial and office staff.
Denationalization of jute mills started in July 1982. The government ordered BJMC to
complete the process by 16 December 1982, but only 10 mills could be handed over to
Bangladeshi owners by that time. The valuation process and settlement of other
organizational matters relating to handing over of the mills took a long time. Among the jute
mills owned by BJMC, 46 had satisfactory financial performance in 1982-83, when their
profit before contribution to national exchequer was about Tk 240 million.
The same mills incurred total losses of about Tk 430 million in the previous year. Jute mills
incurred losses regularly over years and external donor agencies pressed hard for
denationalization. More and more mills were put into the denationalization list. In 1999,
BJMC had 33 mills. The World Bank continued to work closely with the government to
restructure the jute sector, especially through denationalization, merger, dissolution, closure
and setting up of new units.
The importance of the jute sector to the Bangladesh economy, in particular, cannot be over-
stated, it is a major cash crop for over three million small farm households, the largest
industry, producing about one-third of manufacturing output, and the largest agricultural
export commodity in Bangladesh. The livelihood of about 25 million people (almost one -
fifth of the total population) is dependent on jute - related activities in agriculture, domestic
marketing, manufacturing and trade.

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2.2 Bangladesh Jute Industry at a Glance

1. Average land area under : 12.35 Lac acres

jute cultivation
2. Average production of jute : 58 Lac bales (1.04 Million Ton.)
carryover 3 “ (0.05 Million Ton.)
61 Lac bales (1.09 Million Ton)
3. Average internal consumption of jute : 38 Lac bales (0.68 Million Ton)

4. Average Export of raw Quantity Value

jute with value 21.00 Lac bales (0.37 Million Ton 1000 Cr. Tk.

5. Number of jute Mills: : Under BJSA 81

Under BJMA 97
Under BJMC 27
TOTAL : 205 UNITS
6. Number of workers : BJSA Mills 55,868
employed in Jute Mills (Approx.) BJMA Mills 39,000
BJMC Mills 61,681
TOTAL: 1,56,549
7. Average production of : BJSA Mills 3,60,500 M. Tons
Jute goods BJMA Mills 1,56,500 M. Tons
BJMC Mills 1,46,000 M. Tons
TOTAL : 6,63,000 M. TONS
8. Average internal consumption : BJSA Mills 20,000 M. Tons (yarn/twine)
of Jute goods BJMA Mills 48,000 M. Tons (sacking/hessain)
BJMC Mills 21,000 M. Tons (sacking/hessain)
TOTAL : 89,000 M. TONS
9. Average Export of jute : Quantity Value
goods with quantity, value BJSA Mills 3,42,195 2014
BJMA Mills 97,160 58
BJMC Mills 96,523 537
TOTAL : 5,35,878 3139
10. Spindles in Jute : 1,75,114 Installed
Spinning Mills 1,47,124 Operated
11. Installed Looms in Jute :
Mills (As on 30th June 2010 ) Hessian Sacking CBC Others Total
BJMC: Installed 3790 2930 579 21 7320
Operated 2341 2930 513 21 5805
BJMA: Installed 6532 5257 711 361 12861
Operated 1421 2530 183 200 4334

Table 2.2: Jute Industry In Bangladesh

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 CHAPTER 03

3.1 What is National Minimum Wage?

There is no universal definition on national minimum wage .The national minimum wage is
usually considered as one of the most successful labor market interventions that improves the
incomes of the low wage earners. (David Coats, 7007:9). At first ILO introduces the
minimum wage regulation for ensuring workers ‘reasonable standard of life, but none of the
instruments of ILO defines the term ―minimum wage. The ILO conventions and
recommendations use different terms—for example, Convention No. 26 uses the term
―minimum rates of wages (Article 1,3 and 4), and Convention No. 33 uses the terms
―minimum rates of wages ―minimum wage rates and ―minimum rates. The terms
―minimum rates‖ and ―minimum rates of wages are also used in the corresponding
Recommendations Nos.30, and 89. Only Convention s No. 131 and Recommendation No 135
systematically uses the term ―minimum wages, however do not provide any definition (ILO,
1992). The ILO Convention No. 131 provides the minimum wage fixing machinery. This
includes that the following six criteria have to be taken into consideration, while fixing the
level of minimum wages for the workers:
(a) needs of workers and their families;
(b) General level of wages in the country;
(c) Cost of living;
(d) Social security benefits;
(e) Relative living standard of other social groups; and
(f) Economic factors which include the requirements of economic development, levels of
productivity and the desirability of attaining and maintaining a high level of employment.
These similar criteria are however listed in the Minimum Wage Fixing Recommendation No.
135. However, the standard definition of minimum wage is given by ILO in the International
Labor Conference Report III. In this report the expert of ILO defines the term ‘minimum
wage‘ as "the minimum sum payable to a worker for work performed or services
rendered, within a given period, whether calculated on the basis of time or output,
which may not be reduced either by individual or collective agreement, which is
guaranteed by law and which may be fixed in such a way as to cover the minimum
needs of the worker and his or her family, in the light of national economic and social
conditions (Ibid, p. 13).”

8
The ILO is not, however, the only international body that concern about the question of
minimum wages. The United Nations Organization has also dealt with the question on a
number of occasions which reflected in the Universal Declaration of Human Rights. Article
23 of Universal Declaration of Human Rights provides that "Everyone who works has the
right to just and favorable remuneration ensuring for himself and
his family an existence worthy of human dignity.’’
Article 7 of the International Covenant on Economic, Social and Cultural Rights recognizes
the right of everyone to the enjoyment of just and favorable conditions of work, fair wages as
well as remuneration for the workers as minimum as provide a decent living for themselves
and their families. Legal instruments adopted by different regional organizations also refer
directly or indirectly to minimum wages.
For example, Article XIV of the American Declaration of the Rights and Duties of Man
declares "Every person who works has the right to receive such remuneration as will, in
proportion to his capacity and skill, assure him a standard of living suitable for himself
and for his family".
The African Charter on Human and Peoples' Rights (Article 15) ensures the right of every
individual to work under equitable and satisfactory conditions and to receive equal pay for
equal work. The European Social Charter also states that ―the contracting parties accept as
the aim of their policy, to be pursued by all appropriate means, the attainment of conditions
propitious to the effective realization of a number of rights and principles, including the right
of all workers to a fair remuneration sufficient for a decent standard of living for themselves
and their families.‖ (Ibid, P-5). The above definition of minimum wage indicates that the
minimum wage is generally linked to work and distinct from the broader notion of social
protection. It attempts to protect workers from exploitation, assuring a minimum survival
standard for them and that of their families, as well as it constitute a level which may not be
undercut by employer, and whose application is guaranteed by law. Along with the minimum
wage fixing machinery conveys the message that national minimum wage fixing authorities
should try to strike a balance between economic and social concerns.

3.2 Evolution of Minimum Wages in Bangladesh

The first wages board in the country was set up in 1958 by the then East Pakistan
Government under the Minimum Wages Act, 1957. The Minimum Wages Ordinance was
enacted in 1961 by the then Pakistan Government to regulate the issues of minimum wages.

9
In 1969, a commission lead by Air Vice Marshall Nur Khan specified Minimum National
Wage. The Commission known as Nur Khan Commission i proposed 115 taka as Minimum
National Wage. In 1969 the Government declared Minimum Wage Ordinance. After the
independence the proposal of the Commission was not adopted in Bangladesh due to
nationalization policy of the then government. Due to their distinctive features, evolutions of
minimum wages for public and private sectors in Bangladesh need to be discussed under
separate sub-headings.

3.3 Sector wise Minimum Wages for Workers (Bangladesh)

The table mentioned below the revealed minimum wages for laborer in Bangladesh. A
laborer/worker gets minimum BDT 8300 per month in Bangladesh and it is the highest rate
among various sector of the country. Even a garment worker earns minimum BDT 5000 per
month where as a Jute mill worker gets BDT 4300 per month as wages.

Monthly minimum wage in

Ranking Sector
BDT
1 Oil-mills 8300
2 Re-rolling 6100
3 Foundry 5100
4 Ship breaking 4645
5 Jute Mill Worker 4350
6 Pharmaceutical 3645
7 Soap and cosmetic 3300
8 RMG 3000
9 Shrimp processing unit 2645
10 Tailoring shop 2350
Source: Daily New Age of August 13, 2017
Table 3.1: Wages comparison

3.4 Employment and Worker-related Issues in Jute Industry

Jute manufacturing has traditionally been a labor-intensive activity; however, the size of
employment in public and private sector jute mills has varied overtime. BJMC mills, on
average, employed more than twice the number of workers compared to the BJSA mills; the
number was about 75 per cent higher when compared with BJMA mills. Number of workers
10
in the various sections of BJMC mills was higher than that of BJMA and BJSA mills and this
difference ranged between 19 per cent and a whopping 167 percent (in particular sections). It
can be inferred that because of under utilization and unutilization of machineries in the BJMC
mills, many workers, who are employed under ‘permanent’ contract, remains underemployed
or unemployed. Since these workers were entitled to receive government-stipulated salaries
and other amenities, to the fullest extent, cost of production in the BJMC mills has tended to
remain high on a consistent basis undermining profitability, and overall sustainability of the
units. Wage structure of BJMA mills, on the other hand, was different because of the
‘contractual’ nature of appointment; workers’ wages were also found to be low. Excess
number of workers in the public sector jute mills was mainly because of recruitment of
additional workers and also ‘non-workers’ during different political regimes and also as a
result of pressure from trade unions.
Since BJMC mills were unable to employ the workforce appropriately, their overall
production was lower compared to other mills. Output per worker, which is a proxy variable
for labor productivity, was found to be only half in sample BJMC units compared to that of a
BJMA mill. While in case of a BJSA mill, it was almost three times higher compared to that
of a BJMC jute mill. Low productivity in the BJMC mills has been, and continues to be, a
serious cause of concern which demands further and more in-depth investigation.

Table 3.2: Types of workers in Different sections in Sample Mills, 2007

3.5 Workers’ Wages

Workers’ wages are related to their skill and the types of operation they are engaged in.
Survey carried out for this study showed that workers’ wages in a typical jute enterprise

11
ranged between Tk.2,600 and Tk.5,400, depending on level of skill and types of operation
(Table 13). Workers’ wages were significantly higher in BJMC mills as compared to BJMA
and BJSA mills. Wages in the BJMC mills ranged between a minimum of Tk. 4,400 and a
maximum of more than Tk.10,000. Survey revealed that wages of BJMC workers was more
than double (even three times higher in certain operations) than the workers in BJMA and
BJSA mills. BJMC workers received higher wage despite low productivity; the situation
worsened since productivity has declined over time. Such a high expenditure on account of
workers’ wages in the BJMC mills led to a hike in overall cost of production in these mills.
As a consequence, impact on their overall earnings was negative. In contrast, BJMA and
BJSA mills were found to enjoy higher output with half the level of wages.

Table 3.3: Workers’ Wages in sample BJMC Mills against other sample Mills

In 2018, the government set minimum basic wage for the workers of state-owned factories at
Tk 8,300.
In addition with the basic pay, workers of the government industries get house rent at 50 per
cent of basic wage, medical allowance at Tk 1,500, conveyance allowance at Tk 200,
washing allowance at Tk 100 and tiffin allowance at Tk 200. But this pay scale was not
implemented yet. Beside the minimum wages for the workers of jute mills owned by private
sector entrepreneurs were last reviewed in 2013 setting with gross minimum monthly pay of
Tk 4,380.

3.6 Payments Other Than Wages

There are other factors to be considered in employee income:

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3.6.1 Overtime
An overtime culture is a very common phenomenon in the Bangladesh manufacturing sector,
and the Jute sector is no exception. This extra amount is badly needed for workers to achieve
take-home pay to meet their basic needs. Workers in this sector make certain that they have
overtime earnings. But dependency on overtime pay is harmful in two ways: first, overtime
hours fluctuate frequently, thus earnings also fluctuate, but expenditure habits are difficult to
change frequently; which leads them to borrow money at high interest rates; second, 12- 14
hours of continuous work is extremely harmful for their physical and mental health. For the
sake of sound work-life balance, a minimum wage should be based on improved
compensation for normal working hours. For this reason, it is important to avoid such
earnings while calculating the minimum wage.

3.6.2 Fringe Benefits

There are other benefits, such as attendance allowance, transport allowance, festival bonus,
production bonus, annual leave encashment, and so on, that are included here. As these
benefits are not guaranteed by law, employers have their own way to calculate such benefits.
Such benefits vary greatly depending on the employer. Besides, there are strong debates over
some of the above benefits. An attendance allowance forces employees to attend work even if
s/he does not feel fit for the work. The same is true for the annual leave; employers encourage
employees not to take the leave but keep working and take the enhancement. The production
bonus cannot be included in the wage calculation as it is highly variable, and, if the target is
not met within the office hour, the workers have to work extra hours to reach that and it
counted as the compensation for overtime.

3.7 Labor Productivity in Jute mill

Between 2002 and 2007, labor productivity, i.e. output per unit of labor, was found to have
declined by 7.8 per cent. Labor productivity in BJMC mills decline by 33 per cent in the
period under review. Whilst labor productivity in BJMA mills fell by 7.8 per cent, in case of
BJSA mills, this has not changed (Table 14). Low labor productivity originated from the
cumulative effects of low capacity utilization, low productivity of machineries, inefficient use
of time and raw materials, etc. Lower productivity in BJSA mills can also be possibly
explained by higher growth in the number of workers which did not match growth of output.
Field level information suggested that reduction of workers alone was not able to enhance
13
labor and capital-productivity and removing inefficiency along a range of areas of operation
and management was simultaneously required.

Table 3.4: Changes in Labor Productivity of Sample Mills

3.8 Comparison between minimum wages of in India and Bangladesh

Workers’ wages in Indian jute mills were found to be relatively higher compared to that in
Bangladesh. Workers received average wages of Rs.7,484 which was equivalent to Tk.10750
(Rs.1 = TK. 1.43642 as of 31 December, 2008). Higher wages paid to workers was stipulated
by State Government’s (West Bengal) regulations as regards payment of minimum wage to
workers which included a basic pay, dearness allowance, HRA, EPF, ESI, bonus and other
benefits. According to the regulations of the state government, basic payment of workers was
usually revised in each quarter of the year on the basis of consumer price index (CPI).
Though the public sector adhered to the government declared wage structure, private sector,
according to comments of some entrepreneurs, did not make the necessary adjustments to the
fullest extent in tune. It was found that cost escalation on account of higher wages was often
balanced by other measures such as delay of expansion of scale of production. In an initiative
which was still at an experimental stage, some private sector jute mills in India were found to
implement productivity-based wage system for workers; however, this initiative was not
acceptable to the workers.

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3.9 Life of Jute Mill Worker in Bangladesh

3.9.1 Poverty and Indebtedness of the Jute Mill Workers

Economic conditions of the jute mill workers are not good. Indebtedness is a common
problem among the workers of jute mills and many of them were always in debt. Often they
took loan for day-to-day expenses as many households had deficit in meeting monthly
expenses. They often borrowed in cash and in kind from various sources. Marriage and
sickness seemed to be important reasons behind debts. Among the jute mill workers, both
Hindus and Muslims used to pay a huge amount of dowry, both in cash and kind. In case of
sickness, much money was needed as almost no government health facilities were accessible
to the workers. Moreover, when the workers are unemployed due to strikes, lockouts etc., it
was necessary for them to take loans to bear the day to day expenditure of the household.
Among other reasons of indebtedness, buying and repairing house, buying agricultural land
and cattle were prominent. Sometimes a loan was taken to pay off a previous loan. The
interest of loan ranges from 14 per cent in case of company loan to 200 per cent in case of
money lenders (Mahajans). Possession of consumer durables is an important indicator of the
economic status of the workers.
3.9.2 Living Conditions of the Jute Mill Workers
The working and living conditions of the laborers are generally poor, which have very
adverse impact on the quality of life of the workers as well as their family members. The mill
authorities ignore the plight of the workers and turn a blind eye to the poor conditions and
squalor that prevailed in and around the jute mills. The living and working conditions in and
around jute mills is always regarded as a low-priority for the mill owners. The monitoring of
the living and working conditions of the working class was necessary only to maintain the
law and order in and around the mill. Epidemics are discussed because they created large-
scale absenteeism among the workers and for the same reason accidents are also monitored to
some extent. Even the government and the philanthropic organizations also ignore the poor
living conditions of the jute mill workers.
3.9.3 Child Labor
To fulfill family and personal needs, children often commence work at a very young age;
especially girls easily get into this sector during their childhood. Although the child labor
problem is nothing new to Bangladesh, it is severe in some tier 2 and 3 factories in this
sector. And this early job commencement results in serious injuries and sometimes death in
the workplace
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3.9.4 Housing and Related Amenities
One major reason behind poor living condition of the workers is poor housing. According to
the report, majority of the workers live in back-to-back lines of houses provided by the
employers. The quarters of the jute mill workers are generally built in a continuous row,
usually along a railway line. Every cluster or batch of houses is built without any plan or
without reference to any other. They are built haphazardly in this way from the very
beginning, and the people had to move to the streets outside through covered passages. If the
totally ill planned construction is injurious to the health of the workers by preventing
ventilation, that method of shutting them up in courts surrounded on all sides by buildings is
far more so. The worker’s quarters are nothing but overcrowded insanitary hovels, without
any adequate ventilation facilities whatsoever. The floor and the roof are cemented, but are
often found leaking and damp. The workers cooked inside their rooms or in the verandah and
collected drinking water from the nearby tap or pond. The factory did not provide any
drinking water for them. The workers who stayed in rented houses generally resided in slums
or shanties. The living conditions in those slums are worse than those in the coolie-lines of
the mills.
3.9.5 Health of the Jute Mill Workers and their Family Members
The living conditions of the workers affect their health directly. Poor housing condition is
associated with lack of access to basic amenities like water & sanitation as a result of which
various infectious and other diseases caused by unhealthy environment are widely prevalent
among the jute mill workers and their family members living with them. Overcrowding with
insanitary condition inside the house create stresses and health hazards due to factors such as
improper lighting, lack of ventilation etc. As a result of all these, the people generally have
poorer health and higher burden of diseases and the infant mortality rate was also very high.
3.9.6 Overtime and Security Issues
Overtime is very common in this sector; most of the time it is expected by the workers. But
this is a serious security issue. Working until after dark with residences mostly far away, they
need to go back home in the dark. As a result, they feel insecure and many female garments
workers are abused and even sometimes raped.

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 CHAPTER 04
DISCUSSION
4.1 Recommendations
1. The Minimum Wage Board of Bangladesh should accept a proper and acceptable
definition by all parties that considers Bangladesh’s economic and cultural properties.
2. To determine the minimum wage, the Board should consider the family as the unit
instead of an individual. It will help them to set up a minimum wage considering all
other important elements needed for an individual to lead a family life.
3. In the developing countries, food costs get the highest priority to determine minimum
wage, but this study and the HIES (2010) survey show that non-food costs are equally
important as food costs. So, non-food costs should be equally considered in
determining minimum wage.
4. A thorough review and revision of the financial account of BJMC jute mills is
required before any kind of reform and restructuring is undertaken. The financial
account maintained at the mill level needs to be examined by taking into cognizance
current stock of all assets including both operating and non-operating machineries,
land, buildings, liabilities to all parties including financial institutions for current
loans, cumulated loans and overdue credit borrowed from suppliers, workers’ arrears,
and other liabilities. This will help policymakers to understand where the public
sector jute mill stands and how these mills could be operated in a vibrant manner. It is
also important to take necessary actions against allegations of corruption in public
sector jute mills.
5. As mentioned, there are three types of factories. Implementing a sudden change in
wages could be deadly for the medium and small factories. Considering this situation,
a two-three phase plan should be adopted to implement the minimum wage so that
small and medium factory owners have enough time to cope with the situation.
6. Employee awareness is important for both employees and the organization. If
employees are aware of their rights, factory owners cannot deceive them, and union
and political leaders cannot use them for political purposes through rumors.
7. As benefits other than wages are not clearly mentioned in the labor law, there may be
confusion over these issues. Sometimes, factory owners determine the benefits
according to their will. So, benefits should be clearly defined and stated. The target

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 for the production bonus is most of the time unrealistic; it also should be set at a
standard.
8. Medium and small factories, especially, but also large ones face some other
challenges in this sector, including lack of backward linkage, difficult financing
options, unhealthy competition within the country, and so on. All such difficulties
increase costs and lead times, which is unfavorable for expansion in this sector.
9. The huge past debt burden, for both public and private sector jute mills, has created a
dead-weight burden on their current operation and overall sustainability. In order to
make operation of jute mills financially viable, the debt burden needs to be
restructured and written off where necessary. An appropriate mechanism has to be
found in this regard.
10. Rationalization of size of the workforce in BJMC mills is urgently required. In the
case of retrenchment, BJMC must ensure required level of funds for paying workers’
overdue amount was available. It was found in the course of the survey that not all the
14,000 retrenched workers received their arrears, and those that had, did not receive it
to the fullest amount. This is unacceptable, and the government should find the
resources to pay all arrears of workers on an urgent basis.
11. Bangladesh Jute Mills Corporation should ensure the proper preservation of
Machinery and adopt and implement (Balancing Modernization Rehabilitation and
Expansion) BMRE program with a view to repair the very old and unworkable
machinery, replacement and resettlement.
12. All outstanding bills of traders and dealers need to be immediately paid by public and
private sector jute mills. An ensured flow of capital is essential to encourage the
dealers/traders to improve quality, quantity and punctual delivery of jute goods.
13. Intervention of trade unions should be stopped in order to keep the management
transparent for smooth running of the jute mills.
14. Authority should provide equal wages and other benefits to the workers of jute sector
of Bangladesh.
15. Authority should ensure job security of the workers those are doing job in the jute
mills all over the Bangladesh
16. The govt. should allocate funds prior to the peak season so that factories may procure
raw material in time and not have to incur unnecessary losses.
17. Lack of statistical data is a major barrier to doing research in this sector; a proper
database should be developed to facilitate research and fill the gaps.
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 18. The govt. should come away from its negative attitude and sincerely desire a true
revival of the jute industry in Bangladesh. There will be a political will to bring back
the glory days of jute in the first place.

19. The “Jute Policy” needs to be reviewed and revised, and in this context the
government’s initiative to design a new jute policy is a well-timed initiative.
However, the draft policy will need to be substantively improved to provide strategic
directions to the jute sector and come up with an effective and realistic plan of action
for short, medium and long term outlook. Jute policy of the country needs to take into
account the prospects of global demand for jute and jute goods in the coming years,
which is absent in the draft policy and come up with a realistic growth target.
20. The idea of an independent “Jute Board” may be considered in this regard, where
there will be representation of major stakeholders. The Board will take all policy
related decisions pertaining to the jute sector. The Board will set plan of action, offer
guidance, monitor performance and provide support on an ongoing basis. One of the
major tasks of the Board will be to establish “rules of the game” so that all mills,
private and public, are operated on a market-based approach.

4.2 Conclusion
The main issue for Bangladesh at the present time is how to ensure an adequate living
standard for workers, especially in the context of globalization and other changes in the
economy. Workers have therefore not been able to benefit from increases in productivity and
the national income. Thus it is not surprising that the issue of a national minimum wages is
being increasingly voiced, particularly from the trade union movement, in order to assure a
minimum living standard for workers. A number of points will however need to be
considered in terms of salting a minimum wage. The implications of wage setting process
under the minimum wage are implemented, will have to be considered. The national
minimum wage will have to be based or the cost of living of workers, and will have to be
periodically reviewed, to adjust for changes in the cost of living. In the present structure,
wages are reviewed and adjusted with a gap of several tears. Wages of workers therefore do
not keep pace with infection. This practice will have to be changed. It is only that it will be
possible to attain a fair living standard for workers.

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 CHAPTER 05
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