Thousands of garment workers in Bangladesh who make clothes for top global brands have clashed with police as strike action over low wages entered a second week.

Police said water cannon and tear gas were fired on Sunday to disperse huge crowds of striking factory workers in Savar, a garment hub just outside the capital, Dhaka.

“The workers barricaded the highway. We had to drive them away to ease traffic conditions,” said police director Sana Shaminur Rahman. “So far 52 factories, including some big ones, have shut down operations due to the protests.”

On Tuesday, one worker was killed when police fired rubber bullets and tear gas at 5,000 protesting workers.

Bangladesh is dependent on garments stitched by millions of low-paid tailors on factory floors across the emerging south Asia economy of 165 million people.

Roughly 80% of its export earnings come from clothing sales abroad, with global retailers H&M, Primark, Walmart, Tesco and Aldi among the main buyers.

Union leader Aminul Islam blamed factory owners for resorting to violence to control striking workers. “But they are more united than ever,” he told AFP. “It doesn’t seem like they will leave the streets, until their demands are met.”

The protests are the first major test for prime minister Sheikh Hasina since winning a fourth term in last month’s elections, which were marred by violence, thousands of arrests and allegations of vote rigging and intimidation.

Late on Sunday, the government announced a pay rise for mid-level factory workers after meeting manufacturers and unions. Not all unions have signalled they will uphold the agreement.

Babul Akhter, a union leader present at the meeting, said the deal should appease striking workers. “They should not reject it, and peacefully return to work,” he said.

Minimum wages for the lowest-paid garment workers rose by a little over 50% this month to 8,000 taka ($95) a month. But mid-level tailors said their rise was paltry and failed to reflect the rising costs of living, especially in housing.

Bangladesh’s 4,500 textile and clothing factories shipped more than $30bn worth of apparel last year.

The Bangladesh Garment Manufacturers and Exporters’ Association, which wields huge political influence, warned all factories might shut if tailors did not return to work immediately. “We may follow the ‘no work, no pay’ theory, according to the labour law,” association president Siddikur Rahman told reporters.

Last year Bangladesh was the second-largest global apparel exporter after China. It has plans to expand the sector into a $50bn-a-year industry by 2023.

But despite their role in transforming the impoverished nation into a major manufacturing hub, garment workers remain some of the lowest paid in the world.