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Ready-Made Garments (RMG)

The garment industry, including those enterprises producing accessories for finished garments, is without doubt the most significant industry in Bangladesh and the country's largest industrial employer. It is also a relatively young industry, established in 1977 and developed rapidly after 1983. Textile factories accounted for 80 percent of Bangladesh's annual export earnings in 2009, with many producing clothes for several global brands. The world's second-largest apparel exporter, the country sent $18 billion worth of clothes overseas in 2011. As of 2011 it was estimated that more than 3.6 million people were employed in , with some 80% of them women.

The total labor force as of 2010 was approximately 50 million, at which time it was estimated that there were approximately 4,000 garment factories employing 2.5 million workers. Employment opportunities increased at a greater rate for women than for men, largely due to the growth of the export garment industry. Pay was generally comparable for men and women.

The ready-made garment industry in Bangladesh is not the outgrowth of traditional economic activities but emerged from economic opportunities perceived by the private sector in the late 1970s. Frustrated by quotas imposed by importing nations, such as the United States, entrepreneurs and managers from other Asian countries set up factories in Bangladesh, benefiting from even lower labor costs than in their home countries, which offset the additional costs of importing all materials to Bangladesh.

Bangladesh-origin products met quality standards of customers in North America and Western Europe, and prices were satisfactory. Business flourished right from the start; many owners made back their entire capital investment within a year or two and thereafter continued to realize great profits. Some 85 percent of Bangladeshi production was sold to North American customers, and virtually overnight Bangladesh became become the sixth largest supplier to the North American market.

After foreign businesses began building a ready-made garment industry, Bangladeshi capitalists appeared, and a veritable rush of them began to organize companies in Dhaka, Chittagong, and smaller towns, where basic garments--men's and boys' cotton shirts, women's and girls' blouses, shorts, and baby clothes--were cut and assembled, packed, and shipped to customers overseas (mostly in the United States). With virtually no government regulation, the number of firms proliferated; no definitive count was available, but there were probably more than 400 firms by 1985, when the boom was peaking.

After just a few years, the ready-made garment industry employed more than 200,000 people. According to some estimates, about 80 percent were women, never previously in the industrial work force. Many of them were woefully underpaid and worked under harsh conditions. The net benefit to the Bangladeshi economy was only a fraction of export receipts, since virtually all materials used in garment manufacture were imported; practically all the value added in Bangladesh was from labor.

In 1993, Bangladesh exported nearly $750 million in apparel to the United States.4 The garment industry's main products include shirts, trousers, jackets, T- shirts, shorts, and briefs. Garment workers make sports caps and sweat suits for export to the United States. Estimates vary on the total number of factories and workers in the garment industry. One estimate puts the figures at 1,500 factories and over 700,000 workers, of whom 75 to 90 percent are women. Representatives of the garment factories located in and around Dhaka frequently cite the figure of 1,800 factories registered with the BGMEA, with 1,000 actively producing garments, of which approximately 300 lead in production. However, these figures do not include a growing sub-contracting sector, which frequently goes unnoticed and unregulated.

Children ranging in ages from eight to fourteen worked in the garment industry. It is reported that most of the children were girls with an average age of just over 13 years -- 10 percent of whom are already married. Reported figures on the incidence of child labor in the garment industry vary from source to source. On the one hand, Dr. Farida Akhtar, Executive Director of the Srama Bikesh Kendra, claimed that one-fourth of the workers in the garment industry are children. On the other hand, in May 1994 the President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) stated that one percent of the total work force are children, numbering an estimated 8,000 - 10,000. A 1994 study by the Asian-American Free Labor Institute (AAFLI) estimates that 25-30,000 children work in the industry, mostly in subcontracting industries. Some estimates suggest that the number of child garment workers may be near 55,000.

On July 4, 1994, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) announced that it would eliminate child labor from all garment factories by October 31, 1994. Under the Harkin Bill, the US no longer imports garments produced by children younger than age 15 years. The U.S. Mission was instrumental in the July 1995 signing of a Memorandum of Understanding (MOU) between the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), UNICEF, and the ILO to eliminate child labor in the garment sector. There is little enforcement of child labor legislation outside the export garment sector.

In July 2010 Bangladesh raised the minimum wage for its garment industry workers following months of violent protests over low salaries and poor working conditions. The 80-percent pay hike was announced following an emergency meeting of the country's wage board committee. The increase raised the minimum monthly wage for garment workers from $25 to $43. Bangladesh had been the scene of massive protests by textile workers calling for higher pay. Workers were demanding that the minimum salary be increased to $72 a month. Prime Minister Sheikh Hasina had criticized the country's clothing manufacturers saying the wages were not only insufficient but "inhuman."