File photo: Workers sewing apparel products at a readymade garment factory Mahmud Hossain Opu/Dhaka Tribune

With the new wage structure in several sectors including RMG, agriculture, leather and tea, its workers’ wages increased

Bangladesh had reduced working poverty by 3 percentage points from 2016 to 2019, said the International Labour Organisation (ILO) on Thursday.

They mentioned the data in its latest report titled “Asia–Pacific Employment and Social Outlook 2020: Navigating the Crisis Towards a Human-Centred Future of Work” released during a virtual briefing.

Working poverty, at least at the most extreme level (living on less than $1.90 a day), was declining before the Covid-19 pandemic. The regional (Asia–Pacific) share of workers living below the international $1.90 poverty line, fell from 5.5 per cent in 2016 to 4.2 per cent in 2019, said the report.

With the new wage structure in several sectors including RMG, agriculture, leather and tea, its workers’ wages increased, which helped to generate more income and reduce working poverty in Bangladesh, it also said.

“Our prime source of employment is agriculture, which has stabilised in the last few years. Wages in the sector increased, which contributed a lot in employment and income generation,” Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue (CPD), told Dhaka Tribune.

On the other hand, increasing remittance inflows also contributed to the rural economy with employment.

In the manufacturing sector, the elasticity of employment was a little bit slow. But wage revision in major sectors, particularly in apparel in 2018, followed by other sectors such as leather, shipbreaking and tea industry contributed to generate more income, Moazzem said.

However, income inequality has increased in the economy, which also squeezed the opportunity for labourers.

If inequality could have been reduced and employment opportunities in the manufacturing sector increased through more public investment, the reduction rate of working poverty could have been higher, Moazzem added.

Workers sell labour for earning their livelihoods, and growth in income helps to reduce poverty. Income rise in the informal sector and agriculture helped to reduce extreme poverty as most people are employed here. 

This happened in the agriculture sector due to higher demand of workers and rise in prices of crops and agri-products, said Zahid Hussain, former lead economist of World Bank, Bangladesh.

However, the pace of poverty reduction fell compared with the 2005-2010 period.   

Matters were made worse by the pandemic, which jolted the informal sector and internal migrant workers, pushing them into poverty again.

The lockdown forced the informal workers in the services sector, as well as internal migrants to suffer the most, Hussain said.

Although with the reopening of the economy some of them regained their livelihood, it is still below the pre-pandemic level.

Poverty caused by the pandemic would be alleviated to some extent if necessary assistance were distributed properly.

The government could use the digital payment to distribute the funds for the poor to avoid mis-targeting and corruption, Hussain added.

The pandemic is not over. Workers and entrepreneurs are vulnerable. Workers need support for their livelihoods, said Sara Elder, chief of an economic unit, ILO regional office for Asia and the Pacific, during a question-answer session after the briefing.

Long-term and mid-term supports are needed to protect the workers, while the concerned countries should invest more in social protection in the region, Elder said.

Covid-19 has inflicted a hammer-blow on the region’s labour markets, one that few governments in the region stood ready to handle. Low levels of social security coverage and limited institutional capacity in many countries have made it difficult to help enterprises and workers back on their feet, a situation compounded when large numbers remain in the informal economy,” said Chihoko Asada Miyakawa, ILO assistant director-general and regional director for Asia and the Pacific.

These pre-crisis weaknesses have left far too many exposed to the pain of economic insecurity when the pandemic hit and inflicted its toll on working hours and jobs, Miyakawa added.

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