What’s happening in Bangladesh’s garment industry?

Bangladesh is well-known for its low-cost production of textiles and clothing, with much of the country’s recent development resting on rapid growth in the garment industry. But behind this progress is an unsustainable reliance on low pay and poor working conditions, particularly for women.

The textile and clothing industry is one the main sources of Bangladesh’s recent economic growth and development. In particular, the ready-made garment (RMG) sector occupies an outsized position in Bangladesh’s economy – and by extension, in the national imagination.

Widely regarded as the engine of development, the rise of the RMG industry was meteoric. In 1983-84, apparel accounted for less than 4% of total Bangladeshi exports. Within a decade, this share had grown to 60%, and increased to a high of 84% in 2022-23 (RMG Bangladesh, 2024).

Bangladesh is currently the world’s second largest exporter of garments, behind only China (see Figure 1) . At its most expansive, the domestic clothing industry employed around four million workers, of whom around 80% were reported to be women. Indeed, women garment workers in Bangladesh quickly became the public face of the industry, held up as a global success story in terms of promoting economic growth and female empowerment through export-oriented development policy.

Figure 1: Top ten textile manufacturing countries by export value, 2024

Source: Royal Europe Textile

The garment industry and the wider economy

The spectacular success of Bangladesh’s garment industry – which grew from $1.8 million in 1980 to a $47 billion in 2023 – is often represented as the result of heroic individual entrepreneurs willing to take calculated risks or of astute and forward-looking state policies. But these narratives omit or obscure crucial details that have a bearing on the implications of the industry’s rapid growth for workers’ rights.

First, the story of Bangladesh’s RMG sector is also a global story. Several factors converged in the 1980s to make the country a desirable site for investment in garment production.

The 1974 Multi-Fibre Arrangement (MFA) framework – which was introduced under the General Agreement on Tariffs and Trade (GATT), the predecessor of the World Trade Organization (WTO) – had already imposed limits on apparel exports from established Asian manufacturers to Europe and North America. In a bid to bypass quotas, South Korea and other producers began to outsource ‘cutting and making’ operations to places like Bangladesh. Meanwhile, across the Bay of Bengal, Sri Lanka’s garment manufacturing was hit by growing civil strife, forcing buyers to seek other nearby markets.

At the same time, in the face of structural adjustment measures – policies of economic liberalisation and market deregulation, imposed by the World Bank and the International Monetary Fund (IMF) as conditionalities for loans – the Bangladeshi state actively embraced trade liberalisation, leaving behind its former socialist impulses. Armed with a host of state subsidies and logistical support, including a duty-free regime and bonded warehousing facilities, budding industrialists soon established the nation’s reputation as a reliable site for basic cutting and making operations.

Despite its reliance on the import of raw materials, Bangladesh’s specialisation in low-cost apparel production proved to be an advantage at various points in the last half-century. For example, during the global financial crisis of 2007-09, exports remained resilient, since demand for lower-cost garments increased in Europe and North America – both major markets for Bangladeshi goods.

But robust rates of growth have not translated into economic sovereignty. In the words of the political economist Rehman Sobhan, the Bangladeshi economy has simply shifted from aid dependence to trade dependence.

Second, the history of the garment industry is also the history of keeping wages as low as possible. Put differently, Bangladesh’s ‘comparative advantage’ in the global market is its ability to provide cheap(ened) labour. Success on the global stage has always hinged on the country’s ability to provide the lowest possible cost of labour: Bangladesh’s ‘competitive price level is clearly the prime advantage’ (McKinsey, 2011).

Where does this leave the industry today? After four decades of a flourishing sector, Bangladeshi garment workers have one of the lowest wages in the world: the minimum monthly wage currently stands at 12,500 taka (about $113), far below the estimated local living wage of $460 per month.

Indeed, the logic of the international market for cheap clothes militates against the logic of providing anywhere near living wages. To attract capital, the value of Bangladeshi labour (from women, in particular) must be actively cheapened. It is no accident that the creation of jobs for women has been accompanied by harsh working condition and extremely low wages.

There is no incentive for either investors or the state to increase minimum wages in the current global garment supply chain, as Bangladesh’s much-vaunted status as garment producer par excellence is at stake every time there is a movement to increase pay. Such movements, by definition, run counter to the interests of the global industry (Siddiqi and Ashraf, forthcoming).

Supply chains, precarity and (missing) women at work

In the past three decades, women garment workers in Bangladesh, albeit inadvertently in most cases, have challenged existing social and spatial inequalities that shape urban living. Bangladeshi feminists contend that garment workers were at the vanguard of a revolution of sorts, by normalising the visibility and mobility of women’s bodies on the country’s city streets. In national and global debates, the presence of women industrial workers in public spaces is often seen as an indicator of feminist progress and economic development.

Today, however, increased automation has started to slash the number of jobs for women in the garment industry. According to a report by the Ethical Trading Initiative, ‘ten years ago, women made up 80% of garment workers in Bangladesh. Now the number is reportedly closer to 60%’. This raises several questions: why are women dropping out of the garment workforce in Bangladesh; and what explains approximately half a million women slipping out of the sector?

Drawing on my own research over the course of several decades, I contend that the number of women workers was never as high as 80%. In fact, this figure may have just been a handy number that made the Bangladeshi government, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and various clothing brands look good.

This is not to deny that automation is having an effect on the industry, especially with the introduction of Jacquard machinery (which simplifies textiles production), for which male labour is specifically recruited (Ashraf and Strümpell, 2023). In this sense, a ‘re-masculinisation’ of garment production is underway, with Bangladeshi women paying the price.

Two competing narratives circulate around garment workers’ lives. On the one hand, some commentators argue that this is a story of modernisation, citing (Muslim) women’s empowerment through entry into wage labour. On the other hand, those critical of Bangladesh’s dependence on the global economy condemn ‘sweatshops’ and exploitation.

Neither story fully captures the complexities and contradictions of garment workers’ daily lives. Women employees have also alternated between being hailed as national heroines saving the nation through their work, and being stigmatised as objects of perpetual suspicion and moral laxity.

What remains constant is the precarity related to the ‘fast fashion’ model of production and increasingly short lead times for delivery (for more on this topic, see this Economics Observatory article by Elaine Ritch). The celebratory discourse around the garment sector and its empowerment of lower-income women obscures the cost of excessive dependence on a single export industry. This dependence is mediated by an uneven distribution of risks along the garment supply chain as well as customary purchasing practices of brands (Siddiqi, 2022).

Research shows that international retailers have systematically pushed down buying prices, squeezing the profits of ‘local’ capitalists. Suppliers then attempt to compensate for this by speeding up their assembly lines and reducing the number of workers whom they employ, with violations of labour rights increasing as a result (Anner, 2020). In short, the enormous power wielded by brands over suppliers – the threat of placing their business elsewhere – ultimately translates into adverse working conditions on the shopfloor.

Garment workers’ exposure to extreme job precarity and uncertainty was illustrated powerfully during the Covid-19 pandemic. The crisis brought into focus the striking power differentials between Western retailers and their international suppliers, as well as the damaging effects of this asymmetry. The pandemic also exposed the precarious nature of Bangladeshi women’s inclusion in the global supply chain as well as their fundamental expendability as a labour force.

Under the current apparel supply chain system, manufacturers are responsible for all costs until final products are shipped. For small factories that often operate on razor-thin margins, this arrangement makes timely payment difficult at the best of times. Indeed, some of the most visible labour protests have turned on the issue of unpaid wages. In the early months of the pandemic, several American and European retailers unilaterally abandoned the binding obligations in formal contracts through a contested invocation of the force majeure clause (a little-known feature of the international trade regime).

A cascade of cancelled, deferred and discounted orders forced hundreds of Bangladeshi factories to halt production or close altogether. Most did so abruptly, without informing their workers or paying outstanding wages. By September 2020, $3.8 billion worth of export orders had been either suspended or cancelled, affecting approximately 2.2 million workers (over half of the estimated 4.1 million total) across 1,150 factories.

The pandemic also revealed some of the chronic weaknesses of the garment industry itself. These include its labour management practices, and the frequent blurring of lines between the industry and a deeply authoritarian state with highly repressive laws. Indeed, over time, the distinction between the BGMEA, a powerful private trade body, and the (now deposed) Awami League government became increasingly difficult to distinguish.

In Bangladesh today, there appears to be tacit popular consent around the ‘cost’ involved in protecting and securing the garment industry. Simultaneously, narratives around women’s empowerment have come to be attached to nationalist messaging around individual workers sacrificing themselves for the good of the country. This draws attention away from legitimate worker claims, and makes it easy to justify state repression of labour in the name of saving the industry and the nation (Alamgir and Bannerjee, 2019).

Six revisions of the minimum wage have taken place in Bangladesh since 1994. In each case, it was only in the aftermath of massive labour protests (including militant uprisings) that a wage increase occurred. And in each case, workers and trade unionists encountered violent and systematic suppression, including blacklisting, dismissal, false accusations and even disappearance/death.

The criminalisation of protests, workers and labour organisers has enabled the government and the BGMEA to discredit union activism and undermine labour platforms (Siddiqi and Ashraf, forthcoming). This repressive and brutal imbalance of power poses a serious challenge to the narrative of development and progress.

The July uprising and an opening to a new state

Recent events have ushered in a renewed sense of hope for all Bangladeshis, including those who work in the garment sector. The toppling of the dictatorial Awami League regime on 5 August 2024 – triggered by a student-initiated people’s uprising – has opened a space for genuine reform and social transformation.

Much of the unrest in the apparel sector in the immediate post-uprising period was the result of turf wars, as former ruling party members ceded their enterprises or shut up shop altogether. This left many workers once again stranded – jobless and with outstanding payments. Notably, within days of the Awami League government’s fall, the BGMEA leadership was purged and reconstituted. By November, the interim government set up a labour reform commission, tasked with providing recommendations to the future elected government. It seems that there is both hope and scope for better working conditions.

Bangladesh is likely to continue to play a major role in the international fashion industry. Unfortunately, its success in garment manufacturing rests on an unsustainable reliance on cheap labour and poor working conditions. Until now, this has come at the expense of workers, particularly women, and it has played a part in generating political unrest. While nationalist and developmental narratives centred on the empowerment of women workers are true to some extent, they can be misleading if not placed in a larger global context. Policy-makers in Bangladesh have a delicate and complicated task ahead of them. They must prioritise changes within the garment industry as it operates inside Bangladesh, ensuring reasonable wages and the right to unionise. At the same time, they must also work towards minimising the imbalance between international brands and Bangladeshi suppliers that is built into garment supply chains. Only then will claims of the country’s garment industry as a driver of women’s empowerment and economic development be truly meaningful.