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Bangladesh – Labour Market Profile 2013

Executive Summary

Main Issues on the Labour Market

- Once named a basket-case for development, meaning a permanent poor country that would always depend on aid. Though still a very poor country Bangladesh has achieved remarkable social progress and a relatively well-managed development.

- Once irrelevant to the global economy, Bangladesh is now an export powerhouse, second only to China in global apparel exports. Readymade garments are critical to Bangladesh’s economy, with textiles accounting for 90% percent of the country’s exports and about 3.5 million jobs. The sector mostly employs women, providing jobs and economic freedom. But on the other hand, Bangladesh’s readymade garment industry has also attracted international and domestic criticism over poor fire safety records, low minimum wages of only 3000 taka, and policies that restrict labour organising inside factories.

- The political environment is antagonist and politically motivated violence often erupts. This also affects the trade union movement, which is split along party lines and political leanings. Strikes and labour actions are common and frequently spontaneous. They often turn violent and policy crack downs also happens.

- Bangladesh is notorious for its child labour, with an estimate 5-7 million child labourers in the country. The proportion of child labourers out of all children is actually not extremely high and about the same level as the average for Asia and the Pacific. It is the forms, which makes Bangladesh stand out, as the majority of child labour is found in hazardous employment.

Labour Market Developments

- Occupational safety and health standards in the mostly labour intensive jobs are appalling. Particular dangerous jobs are the construction, where workers often migrate around the country for jobs; tanning in toxic environments; ship-breaking done by hand and the readymade garment sector with high fire hazards. In the latter, the deadliest fire to date happened in November 2012, where 112 perished at a textile factory. It increased attention to an industry where around 700 have died in similar fires over the last decade.

- In May 2013 the Rana Plaza complex collapsed in Savar. More than 1000 textile workers died. The day before the building was evacuated because it was shaken to its foundations and cracked. But according to figures from BGMEA, the powerful employers' organization in the garment sector - about 3,112 workers, mostly women, went back to work. Not voluntary, but forced. Because very poor fire and building safety real risk of more disasters are not excluded.

- Climate change has started to affect farmers,

with floods becoming increasingly violent and random. Farmer’s earnings are therefore falling, and at the same time food prices are increasing due to global price increases.

- The number of students in vocational training has

steadily increased over the last decade. Bangladesh has a better educated population than many neighbouring countries and high enrolment rates for girls. The industries however mostly use unskilled labour, hampering knowledge spill over and entrepreneurship. However, social mobility is still low and the poor children and teenagers’ do not have any access to the vocational training and even many of the child labours do not access primary schooling.

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Contents

Trade Unions ......................................................................................................................................... 3

Trade Unions in Bangladesh .......................................................................................................................... 4

Employers’ Organisations ....................................................................................................................... 4

Central Tripartite Structures ................................................................................................................... 5

National Labour Legislation .................................................................................................................... 5

ILO Conventions ..................................................................................................................................... 6

Trade Union Rights Violations ................................................................................................................ 7

Working Conditions................................................................................................................................ 8

Workforce ............................................................................................................................................. 9

Unemployment and underemployment ..................................................................................................... 10

Sectoral employment .................................................................................................................................. 11

Migration ..................................................................................................................................................... 12

Informal Economy ....................................................................................................................................... 12

Child Labour ................................................................................................................................................. 13

Gender ......................................................................................................................................................... 14

Characteristics of the Working Age Population ..................................................................................... 14

Social Protection .................................................................................................................................. 16

General Economic Performance ............................................................................................................ 17

Trade ................................................................................................................................................... 18

Trade agreements ....................................................................................................................................... 18

Export Processing Zones .............................................................................................................................. 19

References ........................................................................................................................................... 19

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Trade Unions

Trade unions in Bangladesh (2012) Number of trade union centres 35

Number of trade union federation 166

Number of basic unions 5,242

Dues (median) N/A

Members of trade unions 2.07 million

Trade union members share of labour force 2.9 %

Trade union members to waged workers 22 %

Female member share of trade unions 15 %

Number of CBAs N/A

Workers covered by CBAs N/A

Share of workers covered by CBA N/A

Labour force1 75 million

Bangladesh has an antagonistic political environment between the major political parties. This also carries over to the trade union movement, which is fragmented into more than 32 trade union centres or federations with links to the rivalling political parties.

2

According to the Bangladesh Textile & Garment Workers League (BGTWL), there are 32 National Federations (federations of basic unions irrespective of industrial sector), 108 Industrial Federations (federations of basic unions within same sector), 26 Garment federations and 5,242 basic trade unions.

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The prominent and labour intensive readymade garment industry has many industrial conflicts. The industry only has around 63,000 unionised workers out of 3.5 million, mostly young women.

4

SKOP Sramik Karmachari Oikya Parishad

Sramik Karmochari Oikya Parishad (SKOP) is the platform of joint action on national issues concerning labour market and trade unions, in which 22 out of 32 national trade union centres are affiliated. It was established in 1983 as a joint forum for the mainstream trade union centres to coordinate demands for restoring workers rights during a time when the country was under martial law. SKOP launched several strikes in the following years. Today SKOP represents around 16 national centers and functions as a national coordinator, issuing common trade union stances on specific topics.

(BILS) Bangladesh Institute of Labour Studies

Bangladesh Institute of Labour Studies (BILS) was established in 1995 with the objective of promoting and strengthening democracy in Bangladesh and enhance a democratic and united trade union movement in the country. BILS is constituted by the 14 major national trade union centres of Bangladesh.

BILS is the only labour research institution of Bangladesh, it develops the capacity of the trade union movement and brings trade unions with different political views together in concrete co-operation for i.a. formulation of policy development, inputs and recommendations.

As a joint institution for the labour movement BILS has as such no direct relation with the political parties in Bangladesh and has a democratic constitution with regularly free elections for offices at all levels. Policy recommendations based on BILS research are being brought forward to SKOP, which enters into negotiation with government and political parties.

The national centres organise approximately 2.07 million workers out of a total workforce of 76 million people (agriculture included). They mainly organise workers within the formal sector, though some have started organising in informal economy like construction, rice processing, ship breaking, etc.

The 14 major national trade union centres are the associate members of BILS. Beyond the associate organisation BILS has 435 individual support members.

The 14 organisations are:

- JSFB: Jatiya Sramik Federation Bangladesh - JSF: Jatiya Sramik Federation - BSSF: Bangladesh Sangjukta Sramik

Federation - JSL: Jatiya Sramik League - BJSD: Bangladesh Jatiyatabadi Sramik Dal - BTUK: Bangladesh Trade Union Kendra - BFTUC: Bangladesh Free Trade Union

Congress - BLF: Bangladesh Labour Federation - BMSF: Bangladesh Mukto Sramik Federation - JSJ: Jatiya Sramik Jote - BSF: Bangladesh Sramik Federation - BJSF: Bangladesh Jatiya Sramik Federation - BJSJ: Bangladesh Jatiya Sramik Jote

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Trade Unions in Bangladesh5

Members, Dues, Collective Bargaining Agreements (CBA) and Occupational Safety and Health committees

Trade Union Centre National

affiliation

Total Members

(2012)

Female Members

Dues Number of CBAs

Workers covered by CBAs

Number of OSH com-mittees at

workplaces BFTUC Bangladesh Free Trade Union Congress

BILS 85,000 21.3 %

BJSD Bangladesh Jatyatabadi Sramik Dal BILS 180,000 14.5 %

BJSF Bangladesh Jatiya Sramik Federation BILS 10,050 12.4 %

BJSJ Bangladesh Jatiya Sramik Jote BILS 82,000 42.7 %

BLF Bangladesh Labour Federation BILS 102,000 19.6 % BMSF Bangladesh Mukto Sramik Federation

BILS 204,000 31.7 %

BSF Bangladesh Sramik Federation BILS 5,989 9.9 % BSSF Bangladesh Sanjukta Sramik Federation

BILS 155,000 2.0 %

BTUK Bangladesh Trade Union Kendra BILS 80,970 11.1 %

JSF Jatiya Sramik Federation BILS 38,000 32.9 % JSFB Jatiyo Sramik Federation Bangladesh BILS 15,881 5.0 % JSJ Jatiyo Sramik Jote BILS 2,260 4.4 %

JSL Jatiyo Sramik League BILS 150,000 4.7 % BTUF the Bangladesh Trade Union Federation

- 1,648 -

BTUS Bangladesh Trade Union Sangha - 150,000 0.2 % JSJB Jatiya Sramik Jote Bangladesh - 65,000 10.0 % JSP Jatiya Sramik Party - 110,000 22.7 % NTUF the National Trade Union Federation - 1,798 - NWF the National Workers' Federation - 10,467 SSF Samajtantrik Sramik Front - 2,285 5.9 % TUK the Bangladesh Trade Union Kendra - 50,180 -

Employers’ Organisations

(BEF) Bangladesh Employers’ Federation6

BEF was founded in 1998 and is the national employer organization, representing 131 affiliates with around 90% of established employers in the private sector. BEF is represented in most national bi- or tripartite bodies. BEF provides advisory services on industrial relations, productivity improvement assistance, training, labour court assistance, minimum wages board representation and inputs to national policy issues. BEF is headed by Mr. President Md. Fazlul Hoque.

In addition to BEF, the garment sector has two very active employers’ organisations, the Bangladesh Garment Manufactures and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufactures & Exporters Association (BKMEA)

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Central Tripartite Structures

Mediation and Arbitration

Collective industrial disputes are governed by the Labour Law.

8 First the parties have to go through a

settlement overseen by a Conciliator. If settlement fails the parties may be refer the dispute to an Arbitrator, or either party may instead conduct strike or lockout or apply for the Labour Court to adjudicate the dispute. The Labour Court consists of a Chairman appointed by the Government and one member each representing employers and workers.

According to ITUC,4 the system of labour justice in

Bangladesh is slow, sometimes cases have to stay for years in the backlog, and courts usually fail to provide remedy for labour abuses.

Minimum Wage Board

The Government must establish a wage board consisting of a Chairman, an independent member and a representative each from workers and employers, all appointed by the Government. The Board gives recommendation to changes in the minimum wage, which the government can either accept or send back

to review in the Board. The board must meet every five year.

Wage board covering traditional unorganised sectors has been established in shrimp processing, metal and construction after pressure from trade union forums

National Council for Industrial Health and Safety

The Government may establish the National Council for Industrial Health and Safety. It consists of seven ministers, seven representatives from industries and seven workers representatives. The Council prepares national policy on Occupational Safety and Health.

Other bi/tripartite organs

- National Coordination Committee for Workers’ Education (NCCWE)

National Labour Legislation

Constitution7

Bangladesh constitution is from 1972, and has been amended 15 times since then. The Constitution prohibits forced labour and gives the right to form associations or unions, to reasonable wages, to social security and equal opportunity in employment. Work is a right and duty, and local government are encouraged to institute representation of workers.

Labour Act8

The Labour Act of 2006 consolidated 25 separate acts into one labour code. It regulates employment relations, working hours, wages, trade unions and industrial relations. It sets maternity benefits, compensations for injury and accidents, Occupational

Safety and Health Standards, the labour inspectorate and prohibits child labour. It also establishes the Wage Board, the Labour Court, the National Council for Industrial Health and Safety, the procedures for industrial disputes including strikes and lockouts.

Several provisions of the Labour Act such as regulation of trade unions does not apply to workers in the Export Processing Zones, but are governed under

separate laws.4

The Labour Act is the most important labour legislation. Several other legislations exists which regulates and sets standards and restrictions for the labour market.

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ILO Conventions

Ratified ILO Conventions10

Subject and/or right Convention Ratification date

Fundamental Conventions

Freedom of association and collective bargaining

C087 - Freedom of Association and Protection of the Right to Organise, 1948 1972

C098 - Right to Organise and Collective Bargaining Convention, 1949 1972

Elimination of all forms of forced labour

C029 - Forced Labour Convention, 1930 1972

C105 - Abolition of Forced Labour Convention, 1957 1972

Effective abolition of child labour

C138 - Minimum Age Convention, 1973 Not ratified

C182 - Worst Forms of Child Labour Convention, 1999 2001

Elimination of discrimination in employment

C100 - Equal Remuneration Convention, 1951 1998

C111 - Discrimination (Employment and Occupation) Convention, 1958 1972

Governance Conventions

Labour inspection C081 - Labour Inspection Convention, 1947 1972

C129 - Labour Inspection (Agriculture) Convention, 1969 Not ratified

Employment policy C122 - Employment Policy Convention, 1964 Not ratified

Tripartism C144 - Tripartite Consultation (International Labour Standards) Convention, 1976 1979

Up-to-date Conventions

Working time C014 - Weekly Rest (Industry) Convention, 1921 1972

C106 - Weekly Rest (Commerce and Offices) Convention, 1957 1972

Social Security C118 - Equality of Treatment (Social Security) Convention, 1962 1972

Specific categories of workers C149 - Nursing Personnel Convention, 1977 1972

Fundamental Conventions are the eight most important ILO conventions that cover four fundamental principles and rights at work. Equivalent to basic human rights at work.

Governance Conventions are four conventions that the ILO has designated as important to building national institutions and capacities that serve to promote employment. In other words, conventions that promotes a well-regulated and well-functioning labour market.

In addition, there are 71 conventions, which ILO considers “up-to-date" and actively promotes.

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Trade Union Rights Violations

According to ITUC:11

Police attacks against demonstrating workers demanding better working conditions and higher wages were widespread. One worker was killed when police attacked protesting workers at Advanced Chemical Industries (ACI) Pharmaceuticals in Narayanganj. The use of contract workers continued to be a source of labour instability. The Bangladeshi High Court directed the government to stop forced labour and the enslavement of employees by confinement or tying up their hands or legs. There are numerous legal restrictions on the ability of EPZ workers to exercise their full rights to freedom of association and collective bargaining.

According to the U.S. Annual Human Rights Report:12

numerous restrictions on union registration exist. For example, the law requires more than 30% of an enterprise’s total workforce, and the union can be dissolved if membership falls below 30 percent; no more than three trade unions can be registered in any establishment.

The law recognizes the right to strike; however, many restrictions on this right remained. For example, 75 percent of union membership must consent to a strike before it can proceed. The government can shut down any strikes lasting more than 30 days and refer the matter to labour courts for adjudication. In addition

strikes are banned for the first three years of commercial production or if the factory was built with foreign investment or owned by a foreign investor.

In practice few strikes followed the legal requirements; strikes or walk-outs often occurred due to the spontaneous decisions of workers.

Labour organizers reported frequent acts of intimidation and abuse, arbitrary lockouts, firing of employees, and increased scrutiny by security forces. Authorities sometimes arrested labour organizers for destruction of property and other charges, in what some NGOs considered repression of labour rights activists.

Unions were highly politicized but were independent of the government and were strongest in state-owned enterprises, including jute mills, textile mills, chemical industries, and the government-run Port of Chittagong.

ILO is processing a case in the Committee of Freedom of Association concerning alleges interference by the authorities in the election of officers to the Bangladesh Cha-Sramik Union (BCSU) Central Executive Committee, as well as the violent suppression of demonstrations organised to protest this interference.

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Working Conditions

Wages and earnings Monthly average, median and legal minimum wages

Source

Current taka

2011 US Dollar

Average wage (2010) Global Wage

Database13

2,553 41.8

Minimum wage Garment sector (2011)

3,000 44.4

% minimum wage to value added per worker (2012)

Doing Business14

4.1 %

Growth of real average wage (2006-2011) Global Wage

Database13

25 %

Growth of real minimum wage (2000-2011)

20 %

% of minimum wage to value added per worker denotes the minimum wage share of labour productivity. Reported as ratio of minimum wage to value added per worker in the Doing Business Report.14

Formal and informal monthly wages and earnings From Wage Survey 2007

15

2007 Taka / 2011 US Dollar

Median Average

Formal wages

Male ৳3500 / $55 ৳3906 / $62

Female ৳2400 / $38 ৳2781 / $44

Both ৳3200 / $50 ৳3766 / $59

Informal earnings

Male ৳3390 / $53 ৳3573 / $56

Female ৳1826 / $29 ৳2374 / $37

Both ৳3130 / $49 ৳3417 / $54

At 3,000 taka ($44) per month for a garment worker, the minimum wage is one of the lowest in Asia. Compared to labour productivity it is however 4.1% of this which is at the average level for the world.

14

The trade unions consider 7,000 taka ($84) to be the minimum that can be considered a living wage.

16

The minimum wage for sectors not covered by an industry specific minimum wage is 1,500 taka.

12

Minimum wages in the Export Processing Zones are between 2700-7600 taka,

17 slightly higher than the

national minimum wages.

The average wage is lower than the minimum wage for garment workers, and $42-$44 is a low monthly wage in international comparison.

Considering that Bangladesh has a low Gini coefficient at 0.32, that minimum wage to value added per worker is average and that average wage is lower than the minimum wage, these show a country where a large share of the population work in low income waged jobs. On the other hand, both real average wages and the real minimum wage have been growing steadily in the last decade.

The Wage Survey from 2007, gives slightly different wages than the Global Wage Database. Median and average wages are close to each other, and though consistently lower the wages in the informal sector only slightly below the wages in the formal. Women however, earn much less than men. That being said a median and average wage at respectively $50 and $59 per month are very low both for Asian and developing countries.

Bangladesh also has a rising trend of precarious and casual forms of employment. Wages of casual workers are around two-fifth of regular workers.

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Working hours are also long for most workers, with 52% working more than 48 hours per week.

18

Regulations exists on maximum working hours, however according to the U.S. Annual Human Rights Report,

12 these are routinely violated. In the ready-

made garment sector, employers often required workers to work 12 hours a day or more to meet export deadlines, without proper compensation. Safety conditions at workplaces are extremely poor, and high unemployment rates makes it risky for workers to lose their job if complaining. Legal Occupational Safety and health standards exist but they are rarely implemented. There are 95 labour inspectors with 50 in the factories division, which is insufficient to enforce working standards.

95 labour inspectors is 1 per 780,000 workers in the labour force. The ILO recommends 1 per 40,000 workers in less developed countries.

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Decent work is not high on the agenda. Workers are often oblivious to their rights and have such low knowledge of working conditions that they themselves do not realize how dangerous their jobs are. Due to tradition and an extremely poor implementation of the labour legislation nothing has compelled employers to grant decent working conditions to their employees. Moreover, the structure of the

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Bangladeshi economy favours the employers due to the large surplus of cheap labour, which leads to low wages and bad jobs if no mechanisms to mitigate the

market failures are in place.2

Workplace accidents are often not reported, but based on newspaper articles there were 487 work place deaths and 790 injuries in the first six months of 2012 in the construction industry.

20

ILO’s Decent Work Country Programme also recognises compliance with the labour law, the minimum wage and occupational safety and health standards as concerns. The construction, ready-made garment, and ship recycling sectors are often singled out with respect to low occupational safety and health standards due the sectors growth and visibility, but it is a problem in all sectors. Minimum wages are also too low to meet the living cost.

30

Human Rights Watch released a report in 2012, documenting toxic working conditions in tanneries, invalidating workers and polluting the environment.

21

In November 2012, 112 workers perished in a fire in a readymade garment factory. Though the deadliest in Bangladesh history and one of the deadliest industrial fires in world history, it was not unprecedented or unexpected for that matter, as an estimated 700 Bangladeshis have perished in similar fires over the last decade. Pressure to keep labour costs low and thereby not comply with safety expenses are a major cause.

22 The incident sparked mass demonstrations,

23

and a tripartite agreement on fire safety was signed.24

Another prominent industry with appalling occupation safety and health standards is the ship breaking industry off the cost of Chittagong. About half the world’s ships put out of commission are stranded here and recycled. The process gives work to Around 200,000 and provides recycled material. However, the work kills and injures disproportionately many, as the scrapping is done with simple hand tools and the ships often contains hazardous materials, making it one of the most dangerous industries in the world.

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Workforce

Women have lower employment rates than men, both young and adults. The latest data on working poor from 2005 showed the large majority of working Bangladeshis living for less than $2 a day. This was higher than the South Asian average. The share of working poor has fallen in South Asia.

Asia has seen a strong growth in the middle class during the last decade. Bangladesh has a smaller middle class than the average for South Asia, but it has grown faster: In South Asia 18% lived for $2-4 a day and 3.9% for $4-20 in 1999. In 2008 23% lived for $2-4 a day and 5.7% for $4-20. In Bangladesh 13% lived for $2-4 a day and 3% for $4-20 in 2000. In 2010 19% lived for $2-4 a day and 4.2% for $4-20. The dollars are in purchasing power parity.

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Employment rates1

(2012), Age and Sex distribution

Sex Age Employment

rate

Male & female

Total 15+ 68 %

Youth 15-24 51 %

Adult 25+ 74 %

Male Total 15+ 80 %

Youth 15-24 58 %

Adult 25+ 90 %

Female Total 15+ 54 %

Youth 15-24 44 %

Adult 25+ 58 %

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

15+

15-24

25+

Male and female Female Male

10

Working Poor1

Age 15+

Share of workers

in total employment

1.25 USD

a day 2 USD a day

Bangladesh (2005)

Both 50 % 80 %

Male 50 % 81 %

Female 49 % 76 %

South Asia (2005) 38 % 73 %

South Asia (2012) 24 % 61 %

Working poor measures employed people living for less than US$1.25 and US$2 a day, as proportion of total employment in that group

See Ahmed, Yunus & Bhuyan for an overview of the composition of the manufacturing and service sector in Bangladesh.

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Increasingly random floods have decreased agricultural production, affecting the many already impoverished farmers, while at the same time food prices are increasing.

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Job creation and industrialisation have been rather successful in labour intensive low wage industries. Low waged jobs are also often unskilled, generating few skills among the employees, which can migrate into other more productive and higher paying industries.

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A challenge if Bangladesh is to move from low-wage and low-skilled jobs.

Unemployment and underemployment

Underemployment is widespread. The labour force survey from 2010 indicates 20% are underemployed, whereas other sources estimate as many as 40%.

63

Unemployment is only counts people who work for less than one hour per week.

30 It is common for

workers to only work few hours per week. Considering that, unemployment and youth unemployment is relatively high. Both unemployment and underemployment is much higher among women.

The capital Dhaka, has experienced an extreme population growth after independence. Many of the rural-urban migrants do not found formal or decent work.

Interpretation of the open unemployment and employment rates as indicators of a well-functioning labour market is problematic in developing countries. When unemployment is not an option where a person can survive, work of some sort has to be found, often casual and informal work. Unemployment should therefore be understood in relation to the strength of social safety nets, the prevalence of informal employment and how much of informal employment is underemployment due to few formal employment possibilities.

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Job creation is challenged by a steady labour force growth of 2.2% during the last decade, meaning 1.7

million more entered the labour market in 2012.1

Unemployment, youth unemployment and underemployment

Un-

employment (2010)32

Youth Unemployment

(2005)1

Under-employment

(2010)32

Total 5 % 9.3 % 20.3 %

Male 4.2 % 8 % 14.4 %

Female 7.4 % 13.6 % 34.2 %

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Sectoral employment

Though Bangladesh has seen a large growth in industrialisation, 48% of the employed still work in agriculture. Agriculture is a sector with a declining contribution to GDP.

Outside agriculture women largely find work in other services and in the manufacturing sector, which is almost only readymade garment production.

The data for employment distribution based on household surveys give 36 million men and 11 women employed, which for women is very different from ILO estimates employment rates, where 39 million men

and 23 million women were employed in 2005.1

Sectors Share of GDP34

0%

10%

20%

30%

40%

50%

60%

Agriculture

Industry

Services

Employment (2005)1 & GDP share (2011)33

Sector & Sex distribution – (Graph without Agriculture)

Sector Male

employment Female

employment GDP share per sector

Mining and quarrying 44,000 7,000 1.2 %

Manufacturing 3,926,000 1,298,000 17.8 %

Electricity, gas and water 73,000 3,000 1.5 %

Construction 1,421,000 104,000 8.8 %

Trade, restaurants and hotels

6,705,000 403,000 13.8 %

Transport and communication

3,910,000 66,000 10.3 %

Finance, real estate and business services

392,000 115,000 1.9 %

Public administration, education & health

778,000 104,000 2.8 %

Other services 3,747,000 1,495,000 19 %

Agriculture 15,084,000 7,683,000 19.3 %

0% 4% 8% 12% 16%

,0 1900000,0 3800000,0 5700000,0 7600000,0Male Female GDP share by Sector

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Migration

Bangladesh is, partly due to its size, one of the world’s top emigrant countries, with between 5 – 7 million migrants abroad, and a net migration rate of one out 250 inhabitants.

Remittances play a very important role in the Bangladesh economy, with over 10% of GDP coming from remittances. These are mainly used to purchase consumptions goods, with few making it into investment. The Government have therefore set up a financial institution, the ProbashiKallyan Bank, to address this issue.

30

Bangladeshis migrate to very different countries, with the top three destinations being India, Saudi Arabia and the Unitied Kingdom.

35

Factors leading to this large migration are overpopulation, a large overseas diaspora, an agricultural sector that is often unable to sustain the livelihood, etc. Factors, which also lead to large labour migration inside Bangladesh, giving an almost limitless supply of unskilled labour. The construction sector in particular has many workers who migrate from site to site.

Though remittances play a very important role for the economy, unskilled women was banned from migrating abroad until 2006, increasing unregulated migration. Migration of unguarded women is still frowned upon.

36 Unregulated migrants are at higher

risks of exploitation.37

Migration34

Net migration (2006-2010)

Bangladesh -2,908,015

Net migration to average population per year (2006-2010)

Bangladesh - 1 : 250

inhabitants

South Asia - 1 : 920

Inhabitants

Personal transfers i.e. remittances received, % of GDP (2011)

Bangladesh 10.8 %

South Asia 4.3 %

Informal Economy

An estimated 87% of the labour force was employed in the informal sector in 2010, and the informal sector has been growing from 79% in 2002. Depending on status in employment about 20% are day labourers, 41% are self-employed without employees and 22% working as unpaid family workers.

32

The informal sector contributes with a low 40% to GDP compared to its employment. The majority of formal jobs are in semi- to high skilled professions, whereas informal jobs are concentrated among the 62% of jobs with low skills and low productivity.

38

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Child Labour

Bangladesh is notorious for its child labour, and more than 5 million (13%) are child labourers, but in fact it is about the same level as the average for Asia and the Pacific.

What distinguishes child labour in Bangladesh is the hazardous forms employment of children take, and the common use of child labour in services and the large export textile industry. The forms of child labour in Bangladesh are also more incompatible with schooling, than what is common for child labour.

39

According to the Labour Law 2006 no children below the age of 14 are allowed to work and the types of work adolescents between 14 and 18 can be engaged in are specified. This group is not allowed to work with anything dangerous or damaging. Certain types of employment in certain industries such as heavy industries are prohibited. Even then, a massive 86% of all children aged 15-17 work in hazardous industries. In 2005, 98% of recorded child labour was found to be hazardous.

Other estimates give around 7 million child labourers (18%) with around 1.3 million in hazardeous work

(3.3%).4

Child labour is slightly more common in rural (13%) than urban areas (12%), whereas boys (20%) are much more likely to be engaged in child labour than girls (5%).

39 Child labour is more common among the

poorest quintile of households (16%) than the richest (8.2%).

Poverty is the main reason for child labour in Bangladesh, with poor households having to make their children work, to sustain themselves. This in turn increases the labour supply and likely keeps the wages

lower in the industries. It also decreases the children’s future earnings due to lack of education and their increased risk of occupational disability.

Child labour is popular among employers because children are docile and submissive and above all either not paid at all or very low paid. They can be tasked with duties that adults would not undertake and as they are free or very cheap labour they can perform job functions with a very low margin of return on the employer’s investment. On the other hand, children often join small businesses as apprentices. They learn a trade e.g. auto mechanic or electricians and this is often the only option to get an education since the country only has around 100 vocational training schools. The apprentice system does on a positive note secure that the children receive some kind of education but it also keep them illiterate and poor as

they get no salary for years.2

Working children Proportion of all children in age group

Region Year Type Proportion

Bangladesh (age 5-17)39

2006 Child labourers 13 %

Asia and the Pacific40 (age 5-17)

2008

Children in employment

20.4 %

Child labourers 13.3 %

Hazardous work 5.6 %

Children in employment includes all children who conduct some kind of work, whereas child labourers is a narrower term without mild forms of work. Hazardous work is the worst from of child labour as defined in ILO C182.

14

Gender

As noted elsewhere in this report: Only about 15% of trade union members are women. Women have considerably lower rates of employment than men, and women have around double the rate of unemployment, youth unemployment, and underemployment, though fewer women are working poor. Wages are also much lower for women, especially in the informal sector. More girls also enrol in primary and secondary education than boys and boys are also four times more likely to be engaged in child labour.

An Enterprise Survey from the World Bank in 2007 reported that 16.1% of firms had female participation in ownership compared to 15.6% for the average in South Asia, and that 19.4% of full time employees were women, more than South Asia at 16%.

41

Migrants to other countries are mainly men, as female unskilled migration had been illegal up until 2006, and is still discouraged.

The readymade garment industry employs around 80% women, and is the main employment option for women outside agriculture. These women at an average age of 19, usually unmarried and with little education, are prone to exploitation, sexual harassment and discrimination. They earn 60% of their male colleagues, and low occupational safety and health standards, particular fire safety is constant deadly hazard.

42 Only around 1.8% are members of

union.

On the other hand, the industry has provided millions of jobs, increased the women’s real earnings and economic freedom. It has also decreased fertility and a study suggests that opening of a garment factory within a village’s commuting distance, increases schooling of girls in the village.

43

Characteristics of the Working Age Population

Bangladesh has a high average years of schooling per capita for South Asia, nevertheless over 40% of the population have never been to school. Of those that have education almost all have completed primary school and many have progressed to secondary and tertiary school.

Though women are underrepresented in almost all types of education the gender difference in education is rather small.

The graph above shows the educational attainment of all Bangladeshis above 25 years, therefore gives a glance of the human capital of the labour force.

Highest level attained and years of schooling in the population44

(2010), Population 25+, Total and Female

Highest Level Attained Total Female

No Schooling 42.0 % 46.6 %

Primary Begun 1.4 % 1.5 %

Completed 21.4 % 21.0 %

Secondary Begun 12.2 % 10.9 %

Completed 18.5 % 16.1 %

Tertiary Begun 1.6 % 1.3 %

Completed 2.8 % 2.5 %

Average year of total schooling 4.8 years 4.3 years

Educational Gini Coefficient 0.52 0.56

Primary, secondary and tertiary is the internationally defined distinction of education. In Denmark these corresponds to grundskole, gymnasium & university.

The educational Gini Coefficient is similar to the Gini Coefficient, but instead of measuring the distribution of income in a population, it measures the distribution of education measured as years of schooling among the population.45

0% 20% 40% 60% 80% 100%

Total

Female

No Schooling Primary - Begun Primary - CompletedSecondary - Begun Secondary - Completed Tertiary - BegunTertiary - Completed

15

Enrolment in Primary, Secondary and Tertiary schools (2000-2011)34

Total and Female, Bangladesh and South Asia

Net enrolment is the ratio of children of official school age, who are enrolled in school to the population of the corresponding official school age. Gross enrolment is the ratio of total enrolment, regardless of age, to the population of the corresponding official school age. Gross primary enrolment is therefore sometimes higher than 100%.

Data from UNICEF suggests a net primary school enrolment for boys at 83% and 93% for girls, which is about the same for South Asia where total enrolment is about 88%. Between 67% and 80% manage to complete primary education.

Primary education is free and compulsory is free and compulsory until the age of 10, but many children are drop out of school and work as child labourers to help

support the household.4

Secondary school enrolment is also about the same level as for South Asia, though it fell somewhat after 2003. Bangladesh also has a higher enrolment for girls, which is uncommon.

Enrolment into tertiary schools is a little smaller than the average for South Asia.

The number of vocational students has steadily increased from 105,000 in 2000 to 433,300 in 2010,

giving a ratio of 1.44% per 15-24 year olds in 2010. Bangladesh therefore has considerable more vocational student that the average for South Asia, and the number is growing fast. Still here are only around 100 vocational training schools, which make it difficult for most of the poorer younger people to get vocational training.

Vocational Training

34

Pupils in vocational training (2010)

Bangladesh 433,300

Ratio of pupils in vocational student to all pupils in secondary education (Average 2006-2010)

Bangladesh

3.05 %

South Asia 1.18 %

Ratio of pupils in vocational training out of 15-24 year olds (Average 2006-2010)

Bangladesh

1.08 %

South Asia 0.47 %

20%

30%

40%

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60%

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00

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Net secondary school enrolment

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Gross tertiary school enrolment

Bangladesh , Totalenrolment

Bangladesh , Femaleenrolment

South Asia , Totalenrolment

South Asia , Femaleenrolment

16

Social Protection

Few contributory schemes exist in Bangladesh, and most forms of social protection are through non-contributory social assistance. There is the contributory programme of pensions for retired government or semi-government employees.

50

Employers are required to provide a termination benefit. Permanent employees receive half their average wage for 120 days, causal workers for 60 days and temporary workers for 60 days.

47

Employees in the formal sector are entitled to disability and survivor benefits, for accidents in employment. Employers bear the full cost. Disagreements on compensation can be settled at the

Labour Court.8

There are national policies, which aim to provide social security for all workers and employees in the form of provident funds, gratuity and retirement pensions, for the private and public sector. Formal sector workers currently enjoy some social protection, but informal sector workers and casual workers do not have access to such benefits.

30

Bangladesh has several non-contributory social assistance programmes exists, mainly for women and girls, and many are donor funded. These include payment of school fees for girls, food programmes providing wheat or rice to destitute women, income transfer for public works, a poverty reduction programme through training and transfers, a cash transfer programme conditional on children’s school attendance and marks.

46

In addition, a publicly paid Old Age Allowance programme exists for persons who had an annual income less 3,000 taka per year ($40), providing a 250 taka per month ($3.4).

47 According to the Asian

Development Bank, the system is valuable for the

country’s vulnerable older people, but also has weaknesses in the form of means testing, low benefits and not effectively reaching its target population due to abuse of power and corruption.

48

The ILO convention 183 on maternity leave protection has not been ratified. Following the labour act of 2006 maternity leave is set at 16 weeks fully paid; up to eight weeks before delivery and must continue eight weeks after delivery. Maternity leave is paid by the employer.

Public spending on social protection schemes (2004)

Public social protection

expenditure, excl. health

2004 Taka 35.4 billion

2011 USD 1.042 billion

% of GDP49 1.1 %

per capita $ 7.2

per worker $ 15

of government revenue 20 %

Public health expenditure

% of GDP49 0.9 %

Coverage of contributory schemes to potential demographic

50

Contributors to scheme

Disability (2004) 1.9 %

Sickness in employment (2004) 1.9 %

Old age pension (2004) 1.9 %

Old age pension recipient ratio 65+ (2009)

36.8 %

Average level of old age pensions in relation to GDP per capita (2006)

199 %

17

General Economic Performance

Key Facts (2011)

GDP51 GDP

per capita51 (PPP)

GNI51 Human

Development Index52

Gini Coefficient

(2010)51

111 billion USD

1777 USD

120 billion USD

0.5 0.32

144 of 173 countries

146 of 187 countries

18 of 156 countries

Doing business53

Control of corruption54

Government effectiveness54

Rule of Law54

122 of 183 countries

-1.00 -0.85 -0.72

178 of 212 countries

153 of 212 countries

170 of 212 countries

The political environment is toxic yet democratic, which leaves traces through elite society. The two major parties’ antagonistic rivalry has been running for decades, authoritative measures are used by the government and more or less organised political violence is common.

Bangladesh has experienced growth rates around 6% for over 15 years, lifting millions out of poverty, and in general developing the nation.

55 However the country

remains a poor. Compared to the rest of developing countries in Asia with the regional powerhouses India and China, Bangladesh has fallen behind on GDP per capita measured in Purchasing Power Parity and the gap is projected to widen. Here, Bangladesh is more comparable to a Sub-Saharan African country.

Bangladesh combines widespread poverty and economic backwardness with remarkable social progress. According to The Economist, the progress has been caused by improved status of women, increased rural incomes, maintained social spending and influential non-governmental organisations, in particular BRAC.

56

Inflation has been growing for years and is reaching 10%, and capital formation is not as high as in South Asia.

With a Gini coefficient at 0.32, income equality is very high, and indicates that growth and also the low GDP per capita are spread evenly in Bangladesh. Likely because labour intensive textile manufacturing plays such an important part of Bangladesh’s economy.

The doing business indicator ranks Bangladesh at a lower medium at 139 out of 183 countries. A high

ranking means the regulatory environment is more conducive to the start-up and operation of a local firm. Bangladesh scores high on protecting investors, but very low on getting electricity and registering property. Bangladesh has a low score on the three governance indicators, Control of Corruption, Government Effectiveness and Rule of Law.

GDP per Capita (PPP), trend and forecast57

Inflation, trend and forecast57

Gross fixed capital formation (% of GDP)51

0

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rren

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Bangladesh Developing Asia

10%

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Bangladesh South Asia

18

Trade

Bangladesh’s export sector is dominated by labour intensive textile production, mostly going to the EU. The production of textiles for export has often attracted international attention for its poor working conditions and use of child labour.

At 22%, exports play an important role though medium role and the balance of trade is relatively good. Both stock and flows of foreign investment are low relative to GDP.

Under the international textile quota system, the Multi Fibre Agreement, Bangladesh was exempt from quotas to the EU and the sector grew large. After 2004 when the agreement was phased out, Bangladesh has retained a large share of international textile trade.

Due to increased labour costs in China, the world’s textile production has moved and are still moving South to countries like Pakistan, India, Indonesia and especially, where labour cost i.e. wages and other expenses remain very low.

58

Trade agreements

Bangladesh benefits from the United States’ Generalised System of Preferences. These are unilateral trade benefits from the U.S. government, allowing duty and quota free access for some product. A country can be removed if it is violating or do not take steps to uphold the ILO Core Labour Standards. Each country is reviewed annually, by the US government.

59

Currently, a case filed by AFL-CIO in 2007 is examining Bangladesh. The accusations are that workers in the shrimp, ready-made garments and in Export Processing Zones are not able to freely organise, associate and engage in collective bargaining.

60

Bangladesh also benefits from the EU’s unilateral Generalised System of Preferences, Everything But Arms (EBA), which allows duty and quota free access for all products except arms. A country can be removed from EBA, if it seriously and systematically violates principles of human rights and of the ILO Core Conventions. So far only Myanmar and Belarus have ever been removed.

61 Following the factory fires in

late 2012, EBA has been mentioned in the EU as leverage to improve working conditions in Bangladesh.

62

Trade and Foreign Direct Investment

Exports63 (2012)

Imports63 (2012)

FDI flow51 (average 2007-11)

FDI Stock63 (2012)

119 billion USD

35 billion USD

0.82 billion USD

7.8 billion USD

26 % of GDP 30 % of GDP 0.7 % of GDP 6.6 % of GDP

Products share of exports (2010)64

Bangladesh's main export markets (2011)65

Animal products Vegetable products FoodstuffMineral products Chemicals, etc. Plastics / RubbersLeather & Furs Textiles FootwearWood products Stone / Glass MetalsMachinery / Electrical Transportation MiscellaneousServices

EU; 49%

US; 17%

Canada; 3%

Turkey; 3%

India; 2%

Others; 27%

19

Export Processing Zones

Bangladesh has had Export Processing Zones (EPZs) since the 1980s. There are eight in Bangladesh, run by the Bangladesh Export Processing Zone Authority.

66

According to an ILO survey from 2007 the EPZs had 188.000 employees, in addition there are 5341 bonded warehouses, which are similar to EPZs these have over 3.2 million employees. 85% of the employees were women and they contributed with 75% of Bangladesh exports, mainly to the EU.

67

According to the ITUC,4 collective bargaining is

virtually non-existent in the EPZ, because the BEPZA discourages it. Special legislation prohibits workers from joining unions in EPZs, instead they can form Workers’ Welfare Associations. Legislation which the

ILO monitoring system has observed violates freedom of association and collective bargaining. These associations cannot be affiliated or receive funds from outside trade unions, the requirements to form an association are high, and industrial action has been prohibited in EPZs until October 2013.

According to the U.S. Annual Human Rights Report:12

Worker unrest shut down the Chittagong EPZ for several days in December 2011. Many workers associations in the EPZ factories are not formally registered and some factory managers strongly discouraged workers from meeting with outside labour organizations and sometimes terminate workers who do.

References

1 ILO, Key Indicators of the Labour Market Database

2 LO/FTF Council

3 ILO, ACTRAV, Country Report: Bangladesh 2011, Submitted by Bangladesh Textile & Garment Workers League

4 ITUC, Report for the WTO General Council review of Trade policies of Republic of Bangladesh, 2012

5 ITUC, List of Affiliated Organisations, 2012 & www.younionize.info & http://www.bils-bd.org & Bangladesh Institute

of Labour Studies, Women’s Participation in Trade Unions in Bangladesh: Status, Barriers and Overcoming Strategies, 2009 6 http://www.bef.org.bd

7 ILO, NATLEX, Constitution of the People's Republic of Bangladesh

8 ILO, NATLEX, Labour Act, 2006 (XLII of 2006)

9 ILO, NATLEX, Country Profile Bangladesh, Basic Laws

10 ILO, NORMLEX, Country Profiles

11 ITUC, Annual Survey of violations of Trade Union Rights, 2012

12 U.S. Department of State, Annual Country Reports on Human Rights Practices, 2011

13 ILO, Global Wage Database 2012/13

14 IFC, World Bank, Doing Business 2013, 10

th ed.

15 Bangladesh Bureau of Statistics, Key Indicators from the Wage Survey 2007

16 ITGLWF, Union Leaders Held Captive by Factory Managers in Bangladesh, 17 February 2012

17 Bangladesh Export Processing Zones Authority, Circular, Re-fixation for minimum wages and benefits for the

workers of the EPZs, 06 October 2010 18

ILO, Decent Work Country Profile, Bangladesh, Executive Summary, 2012 19

ILO, Press Release, ILO calls for strengthening labour inspection worldwide, 16 November 2006 20

Equal Times, Occupation: Hazardous. The Plight of Bangladeshi Construction Workers, 29 October 2012 21

Human Rights Watch, Toxic Tanneries The Health Repercussions of Bangladesh’s Hazaribagh Leather, 2012 22

The Economist, Garment factory fires: A "distinctly South Asian" tragedy, Dec 6th 2012 23

IndustriAll, Garments sector closed for day of mourning in Bangladesh, 27.11.2012 24

IndustriAll, Tripartite effort on fire safety in Bangladesh, 17.01.2013

20

25

The Economist, Ship breaking in Bangladesh: Hard to break up, Oct 27th 2012 26

World Bank, PovcalNet database 27

ILO, Employment Sector Working paper, Ahmed Yunus & Bhuyan, Promoting employment-intensive growth in Bangladesh: Policy analysis of the manufacturing and service sector, 2009 28

The Guardian, Bangladesh's once welcome floods are now harbingers of disaster, 23 January 2013 29

Hausmann et al., The Atlas of Economic Complexity: Mapping paths to prosperity, 2011 30

ILO, Decent Work Country Programme, Bangladesh (2012-2015) 31

Kucera D. & Roncolato L. (2008), Informal Employment: Two contested policy issues, International Labour Review, Vol. 147 (2008). No. 4 32

Bangladesh Bureau of Statistics, Key Findings of Labour Force Survey 2010 33

ADB, Key Indicators for Asia and the Pacific 2012 34

World Bank, World dataBank 35

World Bank, Migration and Remittances Factbook 2011 36

The Guardian, Bangladesh's women take rocky road to India in search of freedom and cash, 31 January 2013 37

The Guardian, Debts, dreams and middle men haunt Bangladeshi migrants jailed abroad, 7 January 2013 38

ADB, The Informal Sector and Informal Employment in Bangladesh, 2012 39

ILO/UNICEF/WORLD BANK, Understanding Children’s Work, Country Reports, Bangladesh 2011 40

ILO, Accelerating action against child labour, International Labour Conference, 99th

Session 2010 41

World Bank, Bangladesh Enterprise Survey, 2007 42

The Guardian, Urbanisation in Bangladesh proves a double-edged sword for women, 5 November 2012 43

World Bank, World Development Report, Jobs, 2013, p. 15 & 88 44 Barro, Robert and Jong-Wha Lee, April 2010, "A New Data Set of Educational Attainment in the World, 1950-

2010." NBER Working Paper No. 15902 45

Calculation from based on Thomas, Wang & Fan (2001), with data sets from Barro-Lee (2010) and Psacharopoulos and Arriagada (1986). 46

Brooks World Poverty Institute, Barrientos et al., Social Assistance in Developing Countries Database, Version 5.0 July 2010 47

International Social Security Association, Country Profiles, Bangladesh 48

ADB, Social Protection for Older Persons: Social Pensions in Asia, 2012 49

ILO, GESS, World Social Security Report, 2010/2011 50

ILO, Social Security Department, Social Security Inquiry 51

World Bank, World dataBank 52

Human Development Report, Global Report, Statistical Annex, 2011 53

World Bank, Ease of Doing Business Index 54

World Bank, Worldwide Governance Indicators 55

World Bank, Bangladesh Overview 56

The Economist, Bangladesh and development: The path through the fields, Nov 2nd 2012 57

IMF, World Economic Outlook Databases 58

McKinsey&Company, Bangladesh’s ready-made garments landscape: The challenge of growth, 2011 59

Office of the United States Trade Representative, Generalized System of Preferences (GSP) 60

Office of the United States Trade Representative, Active Closed and Pending GSP Country Practices Reviews, February 2013 61

EC, DG TRADE, Development, Generalized System of Preferences (GSP) 62

European Parliament, 14. Recent casualties in textile factory fires notably in Bangladesh (debate), 16 January 2013 - Strasbourg 63

CIA, World Fact Book, 2011 64

MIT, Alexander Simoes, The Observatory of Economic complexity, What does Bangladesh export? 65

European Commission, DG TRADE, Bilateral Relations, Statistics 66

http://www.epzbangladesh.org.bd 67

ILO database on export processing zones (revised), 2007