Across the developing world, women continue to make up large proportions of key manufacturing industries. For instance, they comprise 68% of the garment workforce and 45% of the textile industry. Wages in these industries are generally paid in cash, making it difficult for workers to save for the long term, which is one way to escape poverty. Here is some information about digital wages in Bangladesh. 

The Situation

At the same time, historic gender roles mean women often do not directly benefit from the results of their work. In Bangladesh, where female textile factories dominate, women are expected to turn their wages over to their husbands or fathers. There are even accounts of long lines of men waiting outside the factories on payday, ready for this handover.

This wage settlement means female workers are denied proper control over their finances. For those women already living in poverty, this leaves them trapped. Despite undertaking paid employment, they cannot access the financial resources required to escape their current position. While this is a complex problem, some simple solutions can go a long way to removing the barriers women face. BSR’s HERProject has looked to do exactly that. HERProject has supported the growing trend of introducing digital wages for factory workers in Bangladesh. It helps teach employees how to use digital banking systems to ensure successful implementation.

The Benefits of Digital Wages in Bangladesh

Digital wages in Bangladesh have transformed women’s lives in the key areas where they were previously disempowered. Now, it is easier for workers to plan and save. They only withdraw the money they need to spend, while the rest is stored securely in a bank account. 

World Bank researchers found that digital banking increases the likelihood of workers saving money by 25%. At the same time, women have more control over their money. Instead of receiving pay in person, their wages are transferred directly to an account that belongs to them. This prevents husbands or fathers immediately confiscating women’s wages.

One can see these benefits in the popularity of digital wages in Bangladesh. According to the Bill and Melinda Gates Foundation, pollsters found that after an H&M factory adopted digital wages, the number of workers who preferred the system jumped from 4% to 81%. A crucial part of the message of HERProject is the benefits factories themselves will stand to make from schemes such as digital wages. According to the organization, empowered women become agents of change, making businesses “more ethical and more productive.”

The Formation of RISE

On International Women’s Day 2023, HERProject joined Gap Inc. PACE, CARE International and Better Work (all organizations fighting for gender equality in supply chains) to form RISE. This new organization, standing for ‘Reimagining Industry to Support Equality,’ will look to fight for gender equality on an even larger scale. Its founders already support more than five million workers in over 20 countries. By sharing their resources, they can bring transformative ideas like HERProject’s digital wages to more of the developing world. The success of digital wages in Bangladesh is one example of how technology can be applied in the developing world to give workers greater control over their finances and the means to escape poverty. Its continued application will help reshape industries across developing countries for decades. 

– Jack Arrowsmith
Photo: Wikipedia Commons