By Kenneth Maxwell
Published on: 14th June, 2013
Nobel laureate Muhammad Yunus said raising minimum wages in Bangladesh’s garment manufacturing industry wouldn’t push apparel companies to leave the country.
“The average wage is 25 cents an hour, making it 50 cents an hour won’t cost a leg and an arm,” Yunus, the founder of microfinance lender Grameen Bank, said today in an interview on Bloomberg Television.
Labor rights groups are pressuring companies from Wal-Mart Stores Inc. (WMT) to Fast Retailing Co. (9983) to improve wages and conditions in Bangladesh’s multibillion dollar garment industry since more than 1,000 people died in the April 24 collapse of the Rana Plaza factory -- the worst industrial incident in the country’s history. Raising wages for Bangladesh’s 3 million or so garment workers would spur increases in other countries, according to Yunus.
“Prices will go up everywhere, Bangladesh will not lose its competitive edge,” the Nobel Peace Prize winner said. Executives running global retailers are “decent people,” Yunus said. Once they understand the issues at stake, they will see the need to improve wages and conditions, he said.
“The factory inspection systems need to be right,” Yunus said. The clothing that emerges from Bangladesh’s factories has good quality and the factories themselves should match that, he said.
“Maybe we were too busy negotiating prices, we didn’t look beyond,” Yunus said, referring to garment manufacturing contracts. “Today we all have to be responsible.”