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From Minimum Wages to Living Wages?: A case study of the export-oriented garment industry in Bangladesh
University of Borås, Swedish School of Textiles.
2009 (English)Independent thesis Basic level (degree of Bachelor)Student thesisAlternative title
From Minimum Wages to Living Wages? : A case study of the export-oriented garment industry in Bangladesh (English)
Abstract [en]

This text will take you on a journey to the Far East – Bangladesh to be more specific. In spring 2008 I went there to find some answers to the question of wages. I wanted to know if a change in focus from minimum wages to living wages could be achievable. The question will unfortunately remain unsolved at the end of the essay. To predict the future would be impossible. Instead three possible scenarios are presented. The likelihood of each and every scenario is later discussed. The conclusions at the end of the essay are based on an analysis of the theories presented and the interviews proceeded. The starting point for the research is the relocation strategies of corporations, which are outlined in the background chapter. This chapter also contains information about the garment industry in Bangladesh. The main research question is if there can be a shift from minimum wages to living wages in Bangladesh. In order to bring clarity to the question, three sub questions have been used. The first question looks into how wages are determined in the export-oriented garment industry in Bangladesh. The second question concerns the corporations’ responsibility for their workers. The third, and last, question addresses how cultural dimensions influence the corporations and how wages are set. To find the answers to the sub questions I divided the research into four main topics: “Wages – Minimum and Living Wages”, “Morality, Ethics and Business Ethics”, “Employees as Stakeholders of the Companies” and “The Cultural Dimension”. The topics are dealt with in separate chapters. The chapters contain a theoretical overview, as well as the information gathered from the interviews. The chapters are followed by a further analysis of the empirical findings. The chapter on wages contains an in-depth explanation of the difference between minimum wages and living wages. In the conducted study all workers were paid the minimum wage in coherence with the law. This wage was however much lower than what the definition of a living wage declares. Therefore many workers did over-time in order to reach a higher standard of living. Business ethics and the stakeholder theory will be used to discuss the opportunities and limitations of the responsibility of the corporations for their workers. The scholar Hofstede’s system of measuring national cultural values will be used to look into specific cultural aspects. According to his system, Bangladesh has a high ranking in power distance, a low ranking in individualism and a middle ranking in masculinity. These three dimensions will be discussed; both correlations and exceptions found in this study will be presented. The three possible scenarios for a change are presented in the conclusions. Firstly, the minimum wages could be changed into living wages, if the government decides on raising the wages of the garment workers. Secondly, the mentality amongst management could provide a solution to the change in focus. If managers could find advantages in paying their workers more, it would open up for a brand new wage system. Thirdly, changes could come from the workers themselves, through unification in the regard. This has however been valued as less likely to happen, because of the power distance prevailing in the country.

Place, publisher, year, edition, pages
University of Borås/Swedish School of Textiles , 2009.
Series
Kandidatuppsats
Keywords [en]
bangladesh, business ethics, export oriented garment industry, living wages, management, minimum wages, minor field study
National Category
Economics and Business
Identifiers
URN: urn:nbn:se:hb:diva-19326Local ID: 2320/4834OAI: oai:DiVA.org:hb-19326DiVA, id: diva2:1311260
Note
Program: TextilekonomutbildningenAvailable from: 2019-04-30 Created: 2019-04-30

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