H&M presses Bangladesh on minimum wage increase

Featured South East Asia - May 16th, 2013

The chief executive of Swedish retailer H&M called on the Bangladeshi government to raise minimum wages – among the lowest in the world – after a fatal building collapse shed light on the country’s debilitated garment industry.

Karl-Johan Persson on Wednesday said he was “willing to pay more” and urged Bangladesh to consider lifting minimum wages from just $38 per month.

The company also asked the government to institute automatic annual salary reviews so the minimum wage could keep up with the cost of living.

“I want the salaries to be revised yearly, as in most other countries,” Persson said. “We’re definitely willing to pay more but we have to find a good, sustainable way for the workers and for the country as well”.

“I would happily sit around a table and talk to all the other big buyers from Bangladesh,” he added.

On Sunday, the government announced its plan to increase wages for the first time since 2010 amid violent protests in the wake of the building collapse which killed more than 1,100 people. Factory owners expressed concern that higher wages could trump cheap labour sought after by Western retailers.

H&M, the world’s second biggest clothing retailer, signed the Accord on Fire and Building Safety in Bangladesh – a five year agreement on improving factory safety and institute public, independent safety inspections.