A new study by the Bangladesh Institute of Development Studies (BIDS) reveals that unionised workers in Bangladesh’s manufacturing sector — particularly in the readymade garment (RMG) industry — earn about 10% higher wages than their non-unionised counterparts.
The findings, presented at the BIDS Annual Conference on Development 2025 in Dhaka, show an overall unionisation rate of 11.35% among manufacturing workers. Based on a 2024 survey of 3,005 workers across 20 industries, the study confirms that the wage premium remains statistically significant even after accounting for worker experience and tenure.
According to BIDS Research Director Mahmudul Hasan, RMG workers overall earn 19%–22% more than workers in other manufacturing sectors, driven by stronger compliance regimes, formal structures, and higher skill requirements. However, within the RMG sector itself, wage differences between unionised and non-unionised workers disappear once compliance levels and worker characteristics are considered. This indicates that unions drive higher wages across manufacturing but do not create additional wage gaps inside the highly regulated RMG sector.
The study calls for easing legal barriers to union formation, expanding worker representation in smaller factories, and strengthening collective bargaining to support fair wage negotiations. A stronger union presence, researchers note, could reduce labour unrest through improved dialogue among workers, employers, and regulators.
Another paper presented at the conference highlighted ongoing challenges in ensuring decent work for Bangladesh’s 4.22 million garment workers. BIDS Senior Research Fellow Mohammad Harunur Rashid Bhuyan pointed to rising factory temperatures, climate refugee pressures on wages, limited investments in green upgrades, and slow progress in renewable energy adoption as persistent hurdles for sustainable sectoral development.
