Written by The Banking Post
Unionised workers in Bangladesh’s readymade garment (RMG) sector earn about 10% more than their non-unionised peers, according to new research presented at the Annual BIDS Conference in Dhaka. The study also finds that RMG employees, overall, earn 19–22% higher wages than workers in other industries, reflecting stronger compliance standards, more formal structures, and higher skill intensity in the apparel sector.
The findings were shared during the third session of the conference, which began on Sunday, and draw on two major research papers focused on wages, union impact, productivity, and technological change.
Wage premium tied to unions
The first study, Wage Earnings of Manufacturing Workers in Bangladesh: Do Trade Unions Matter?, surveyed 3,005 workers across 20 industries in districts surrounding Dhaka. Researcher Mahmudul Hasan said the overall unionisation rate among surveyed workers was 11.35%, and union members consistently earned about 10% higher gross wages.
He noted that while some of this gap reflects higher experience and longer job tenure among unionised workers, the premium remains “positive and statistically significant.”
Within the RMG sector, however, the wage gap between union and non-union workers is not statistically significant once experience, skill, and compliance factors are adjusted for. This suggests that industry-wide regulatory pressure and wage-setting mechanisms may already be creating spillover benefits for all workers, regardless of union affiliation.
The study concludes that unions contribute to a broad wage premium across manufacturing, and the relatively high wages in RMG partly reflect union-driven advocacy that influences minimum standards even beyond unionised groups.
Productivity rising steadily
The second study, Technological Changes at the Process and Sub-Process Level in the RMG Industry in Bangladesh, analysed 51 RMG firms, covering eight products and 140 sub-processes. It reveals an average annual productivity growth of 4.19% in the industry over the last decade. Productivity was measured as output per unit of time at the task level.
Jackets showed the fastest productivity gains, growing 6.59% annually on average. Strong improvements were also observed in knit lingerie (6.43%), sweaters (6.05%), home textiles (5.58%), and t-shirts (4.39%).
Presenting the findings, researcher Kazi Zubair Hossain said the early 2000s marked the start of modernisation in the RMG sector, but the last 20 years have seen deeper automation and increased focus on sustainability—particularly energy-efficient machinery and water-saving technology.
He added that these technological shifts have played a key role in improving productivity, reducing waste, and maintaining Bangladesh’s competitive edge in global apparel manufacturing.
A sector shaped by reform and pressure
Taken together, the studies highlight two major trends:
– Union presence continues to elevate manufacturing wages nationwide
– The RMG industry is undergoing rapid technological advancement that boosts productivity
As the country’s largest export-earning sector, RMG’s wage structures and technological choices have ripple effects across the broader economy. The new findings underscore how both labour organisation and factory modernisation are contributing to a more skilled, more productive workforce—while sustaining Bangladesh’s position as one of the world’s leading apparel producers.
