Police use batons to disperse protesting garment workers in Dhaka, Bangladesh, on Friday. (Pavel Rahman/Associated Press)

Thousands of garment workers unhappy over their wages rampaged through the capital of Bangladesh on Friday, clashing with police who used tear gas and batons to clear the streets.

The protesters smashed vehicles and blocked traffic in Dhaka's central Mahakhali district, the site of dozens of garment factories, police officers said. Several people were reportedly injured.

The protests came a day after the government raised monthly minimum wages for the country's millions of garment workers by about 80 per cent — the first raise since 2006. Workers and labour leaders say the raise is inadequate and does not match the high cost of living.

"We can't accept this raise," said Moshrefa Mishu, a labour leader. "This is still very poor compared with the high cost of living."

Workers have protested for months, sometimes violently, over poor pay and working conditions.

The latest pay raise increased the official minimum wage about 1,300 takas to 3,000 takas, or about $45 a month. Workers and labour rights groups have pressed for a monthly wage of 5,000 takas ($74).

World's lowest wages

Garment workers in Bangladesh are the lowest-paid in the world and can barely afford food or shelter on their monthly incomes, according to the International Trade Union Confederation, a Vienna-based labour rights group.

A garment worker throws a sandal toward police officers during Friday's protest in Dhaka. (Andrew Biraj/Reuters)

"We have tried our best to meet the demands of the workers," Labour Minister Khandaker Mosharaff Hossain told reporters Thursday in announcing the new wages.

Bangladesh exports more than $12.4 billion worth of garments every year, mostly to the United States and Europe, representing almost 80 per cent of the country's export income.

There are 4,000 factories employing more than two million workers, mainly female.

In recent months, thousands of garment workers demanding higher wages have protested on the streets, attacked factories and blockaded highways in and outside the capital, Dhaka.

In June, about 700 garment factories in a major industrial hub near Dhaka were shut for two days after days of violent protests by tens of thousands of workers.

International companies Wal-Mart, Tesco, H&M, Zara, Carrefour, Gap, Metro, JCPenney, Marks & Spencer, Kohl's, Levi Strauss and Tommy Hilfiger all import in bulk from Bangladesh.

The manufacturers say they're being squeezed by a slump in prices on the international market because of the global economic crisis. They also say higher production costs due to an energy crisis and poor infrastructure are pushing them to the edge.