Bloomberg, by Clara Hernanz Lizarraga
According to a text seen by Bloomberg News, Hennes & Mauritz AB has promised to offset higher employee compensation in Bangladesh by increasing the cost of clothes produced there.
After the government agreed to increase the minimum monthly wage by 56 % to 12, 500 taka ($ 113 ) starting in December, the Stockholm-based company announced to its garment providers in Bangladesh that it would “absorb the increase of the wages in our product prices.”
The merchant stated in the letter,” We support the development of fair and competitive salary in our supply chain and are working toward improving working conditions.”
Following months of dangerous protests, hundreds of garment workers went to the streets to demand a pay raise that was higher than what the economy class had suggested. As fashion retailers continue to charge the same costs for orders, manufacturers in the nation had feared that the pay increase would reduce their profit margins.
When Mostafiz Uddin, managing director at Denim Expert Ltd., received the letter from H&M, he said,” I was really concerned about the increased income.” ” It’s a huge relief for me, and it will assist me in ensuring that the workers receive good income.” Uddin stated that he anticipated various companies to do the same.
When asked for comment, a spokesperson for H&M did n’t respond right away.
Bangladesh has surpassed China as the second-largest ready-made cloth exporter in the world, drawing the textile industry with its record-breaking income. In 2022, the sector contributed one tenth of the country’s gross domestic product and employs about 4 million individuals.