One Year Since the July Riots: Rise in Unemployment and unpaid wages

The ready-made garment (RMG) sector accounts for the lion’s share of Bangladesh’s exports and plays a critical role in the country’s economic stability. But since the July riots, this sector has suffered the most. According to a report in Daily Janakantha, from the time of the riots through the end of December (six months), over 100 factories shut down, leaving more than 60,000 workers unemployed. At least 158 factories failed to pay wages properly. Industry leaders cite the Yunus government's policy failures, energy crisis, and instability in the banking sector as key reasons for this collapse.

Another major cause behind the factory closures was the wave of vandalism, looting, and arson targeting factories owned by or affiliated with Awami League leaders, especially after August 5. Following the regime change, many industrialists linked to the Awami League fled the country due to security concerns, while widespread mob violence further paralyzed factory operations.

According to a Daily Ajkaler Khobor report published on March 27, at least 150 factories were shut down between August and March, and over 100,000 workers lost their jobs due to layoffs. In Chattogram alone, 52 garment factories closed, while 95 more in Gazipur, Savar, Narayanganj, and Narsingdi were permanently shut down. More than 122,000 workers became jobless, including over 50,000 in Gazipur alone.

“After the arrest of Salman F Rahman, Vice Chairman of Beximco Group, 14 of its textile and garment units were closed. Additionally, five tire factories under Gazi Group, three plastic factories under Bengal Group, and numerous garment factories in Ashulia, Savar, Zirabo, and Jirani were attacked and burned.”
— Daily Ajkaler Khobor

Workers in the RMG sector did not receive their salaries or bonuses for either Eid. During both Eid-ul-Fitr and Eid-ul-Azha, many spent their days and nights protesting outside the Labor Building in Bijoynagar and the BGMEA Building in Uttara, demanding overdue wages.

On June 7 (Eid-ul-Azha), even two days before Eid holidays, over half of the factories had not paid salaries and bonuses. On June 1, the Industrial Police reported that out of 9,683 factories, only 849 had paid May’s wages — a payment rate of 8.77%, while 91.23% remained unpaid. Regarding bonuses, only 4,242 factories had paid them — a rate of 43.82%, leaving 56.19% unpaid.
(Source: Prothom Alo, “Not Just Eid Holidays—Workers Need Salaries & Bonuses,” June 2, 2025)

Despite workers camping out in intense heat and without food, the government initially took little action. Many workers fell ill; one even died of a heart attack. Clashes with police occurred near the Secretariat, and officials including the labor secretary were held hostage by protesters. Though some partial payments were made following negotiation meetings, the government failed to fulfill promises — prompting another round of protests before Eid-ul-Azha.

“What lies ahead for these struggling workers? The uncertainty looms large.”
— Bangla Tribune, June 15, 2025

New Tariff Threat: Will U.S. Sanctions Shut Down Bangladesh’s Garment Industry?

The imposition of a 20% reciprocal tariff on Bangladeshi exports to the United States represents a significant headwind for the country’s garment sector—which accounts for over 80% of export revenue and directly employs around 4 million people. Even though this rate falls well below the initially threatened 35–37%, it's still a costly burden for U.S. buyers, forcing them to absorb steep duties. As a result, American brands may scale back orders or shift sourcing to cheaper suppliers, weakening Bangladesh’s competitive position. The tariff hikes also tighten price margins across Bangladesh’s broader export sectors—including textiles, leather goods, and tea—dampening demand, reducing foreign exchange earnings, and amplifying pressure on the country’s fragile economic recovery amid rising inflatio

At a Prothom Alo roundtable titled “U.S. Tariff Retaliation: What Path for Bangladesh?”, BGMEA President Mahmud Hasan Khan said:

“If Bangladesh faces higher tariffs than Vietnam, India, or Pakistan, it will be disastrous for our export sector.”
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References:

100 Garment Factories Closed in 6 Months: BGMEA
https://www.dailyjanakantha.com/economy/news/755512 

150+ Factories Closed in 7 Months: Workers’ Eid Joy Fades
https://ajkalerkhobor.net/news/178715 

Not Just Eid Holidays—Workers Need Salaries & Bonuses
https://www.prothomalo.com/amp/story/opinion/column/a9rk43h4s5 

What’s in Store for Workers? Which Way the Movement?
https://www.banglatribune.com/others/902860/⁩