Bangladesh Wage Protests Disrupt Garment Production

By Elena Vasquez

More than 5,000 workers left Sparrow Group’s factory safely on Monday after a crowd attacked the plant, as apparel workers demanded a 140% wage increase that threatens Bangladesh’s cost advantage.

What is disrupting production?

Protests began Saturday in industrial areas around Dhaka, forcing hundreds of garment factories to suspend production. Workers clashed with police, who deployed tear gas and sound grenades. Their demand calls for a minimum monthly wage of 30,000 taka ($243), compared with 12,500 taka ($100), a 140% increase.

Low wages and duty-free access to major Western markets helped Bangladesh become the world’s second-largest apparel exporter after China. The 4 million-worker industry, known for low costs and reliable output, generates more than 80% of the country’s export earnings and contributes about 10% of GDP.

That concentration makes the wage dispute consequential for export earnings, factory margins and buyer costs. A higher statutory minimum would affect the sourcing economics of brands placing orders with affected suppliers.

As factories prepared to start manufacturing spring collections for H&M, Primark and Walmart, executives said worried clients had begun calling about shipments. Those calls followed earlier production disruptions caused by severe fuel and power shortages stemming from the Middle East war and the 2024 mass anti-government protests.

Sparrow Group, whose clients include Zara, Gap and Marks & Spencer, halted production Monday after a large crowd attacked its factory. CCTV footage showed people throwing bricks and stones, smashing windows and damaging exterior walls while trying to force open the main gates. It was not immediately clear who was behind the attack.

“This is the industry’s busiest season,” Sparrow head Shovon Islam said. “Any disruption at this stage is extremely damaging and is hampering production at the worst possible time. All my buyers are concerned.” Major shipments were scheduled for November.

What could the wage board mean for sourcing costs?

The workers’ 30,000-taka proposal remained a demand rather than a government decision. On Sunday, the government formed a wage board to recommend new pay after considering inflation, economic conditions, living costs and export performance, Labour and Employment Ministry secretary Abdur Rahman Tarafder said.

The current wage followed an increase of more than 56% in 2023; previous raises ranged from 50% to 77%. The American Apparel & Footwear Association, which includes leading US apparel and footwear companies, called the board a “critical opportunity to deliver a fair wage that allows garment workers to support themselves and their families.” It also called for an annual review process.

An increase comparable with those recent raises could push Bangladesh’s minimum wage above India’s, the world’s fourth-largest textile exporter. Industry officials said monthly pay in India’s garment sector typically ranges from 13,000 rupees to 15,000 rupees ($137). Pay in China and Vietnam runs roughly twice Bangladesh’s level, based on 2024 International Labour Organisation data.

Clifton Group chief executive M. Mohiuddin Chowdhury, based in the port city of Chittagong, called India an increasingly strong competitor. He cited its domestic cotton supply, strong yarn industry and government incentives to support the sector.

Bangladesh retains duty-free and quota-free access to the EU, Britain and Canada. India now has a free-trade agreement with the UK, the second-largest destination for Bangladeshi garments, adding another competitive consideration for brands allocating apparel orders.

What do the export figures show?

In the financial year ended June 30, Bangladesh’s garment export earnings fell 1.65% from a year earlier to $38.70 billion. The sector then rebounded 6.1% in July-September, reaching $10.58 billion.

For brands, the wage board sits on the critical path for November shipments and spring production. A higher minimum wage would raise factory labor costs. The final allocation would depend on whether factories absorb the increase through margins or brands accept higher prices; the 30,000-taka figure remains a demand, not a confirmed buying cost.

A settlement near that demand would put Bangladesh above India’s current typical wage range, while continued stoppages would put November shipments at risk and compound recent export and energy disruptions.