Towards higher wages in Bangladesh

Towards higher wages in Bangladesh

In Bangladesh, the government does not review minimum wage levels regularly and systems for employees to negotiate directly with their employers are generally not sufficient. In recent years H&M has taken a number of initiatives to address this issue with the Bangladeshi government.

For sustainable wages

H&M sees statutory minimum wages, sector standards and preferably collective agreements as the only possibility to achieve sustainable development of wages across an industrial sector. We also believe that these systems must define wage levels that are enough to live on. H&M’s Sustainability Commitment expresses a clear intent that the salary must enable the workers to support themselves and their families.

Engaging with the Bangladeshi government

Where minimum wages are too low, we use our influence to demand systematic improvements. During 2010 H&M sent letters to the government in Bangladesh. First H&M, together with a number of other companies, sent a letter to the government of Bangladesh with an urgent request for reviews of the minimum wages and the establishment of mechanisms for yearly reviews.

Later in 2010 our CEO Karl Johan Persson sent a second letter to the Bangladeshi Prime Minister. The letter reiterated H&M’s initial requests, clearly expressing the commitment to long-term relations with our Bangladeshi suppliers and the willingness to accept possible increases in costs.

Minimum wages increased, but further systemic change needed

Since 2010 the minimum wages in Bangladesh raised by up to 81 percent. However, systems for annual reviews of the minimum wages adjusting them to increasing living costs are missing. The wage level in the Bangladeshi garment industry has in the past many years only been revised in 2006 and 2010. In the same period living costs has increased, resulting in a reduction in the minimum wages in real terms.

H&M is committed to its long term supplier relations in Bangladesh and remains committed to the relationships even with increased wages. For several years now, H&M demands from supplier factories to comply with applicable minimum wages or collective bargaining agreements, which is monitored through extensive audit programs.

In September 2012, Karl-Johan Persson met with Prime Minister Sheikh Hasina in Dhaka to   present H&M’s request for a further increase of the minimum wage and particular a development of annual wage reviews for workers in the textile industry.

H&M believes that higher wages and annual reviews are both in the interest of the Bangladeshi textile industry and H&M. The mutual interest serves to ensure that the textile industry continues to develop into an advanced and mature industry and to better the lives for millions of workers throughout the entire industry.

Still, further systemic change is needed and the challenges are complex and diverse. Besides influencing governments, H&M works to strengthen the social dialogue in our supplier factories and reward those that have trade union representation and functioning worker committees in place.

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