H&M to increase payments for clothes manufactured in Bangladesh to compensate higher wages

Stockholm-headquartered multi-national high fashion brand H&M has announced that it will increase payments for its clothing items manufactured in Bangladesh to compensate for increased worker wages. 

H&M’s decision comes weeks after protests by garment workers in Bangladesh, who were against Prime Minister Sheikh Hasina-led government’s decision over wage hikes. The worker groups had deemed the wage hikes proposed by Hasina government as insufficient.

According to Bloomberg, H&M conveyed to its partner garment factories in Bangladesh that it will “absorb the increase of the wages in our product prices.” 

The Bangladeshi government had declared a 56 per cent raise in the minimum monthly wage for garment workers to 12,500 taka (approximately $113), effective from December.

The H&M said it supports “fair and competitive wages” in its supply chain, and asserted H&M asserted its dedication to enhancing working conditions.

Also watch | Bangladesh: Protests, violence, vandalism continue on the streets of Dhaka

Despite the government’s proposed $113 minimum hike, thousands of Bangladeshi garment workers, currently earning $75 per month, have protested to demand $208 per month, CNN reported.

The protests have disrupted operations of garment supply chains and have led to factory closures and violent clashes with law enforcement authorities.

Three workers have lost their lives during the demonstrations, including one in a factory fire and another in clashes with the police, 

In October, H&M and other retailers addressed a letter to Bangladesh’s prime minister, urging a minimum wage aligned with workers’ basic needs.

The American Apparel and Footwear Association suggested more frequent reviews of Bangladesh’s minimum wage, challenging the current five-year interval, as reported by CNN.

The wage increase, initially proposed in October, triggered protests from garment workers who argued that it failed to keep pace with inflation over the past five years. 

Notably, Bangladesh ranks as the second-largest global exporter of ready-made garments, trailing only China. 

(With inputs from agencies)