H&M boss backs wage hike
H&M, the Swedish retail giant for clothing, yesterday suggested the government should increase wages for garment workers to help improve their living standards.
Chief executive of the company Karl-Johan Persson also asked for an annual review of the wages of the workers.
He spoke at a press briefing at Radisson Winter Garden Hotel in Dhaka. David Savman, chief representative of H&M in Bangladesh, was also present. Persson arrived in Dhaka on Monday.
H&M is increasing its business in Bangladesh by 10-15 percent year-on-year, said Persson.
“We have a long-term commitment to buy from Bangladesh. H&M is a responsible company; it is always careful about the workers' wages,” said Persson.
“We met Prime Minister Sheikh Hasina and suggested an increase in wages and a yearly wage review for the workers in the textile industry,” the H&M boss said.
He urged the government to consider an annual review of the local minimum wage that takes national inflation and the consumer price index into consideration.
“Since 2010, there has been an increase in the inflation rate,” he said. Food inflation hit 15.38 percent in April last year in the rural areas.
Since the minimum wage for garment workers was first introduced in 1994, it has been revised twice only, in 2006 and 2010, he said.
“If a proper review system is enforced, these revisions will help address the basic needs of the workers,” he said.
This in turn will help employers and buyers work together and focus on productivity, Persson said.
“We believe it is in the interest of the Bangladeshi textile industry, as well as in our interest, that the industry continues to develop into an advanced and mature textile industry,” he said.
Stable markets in which people are treated with respect, and where the workers are properly compensated by their employers, are of the utmost importance, he said.
“Bangladesh is an important market for H&M, which has been buying from suppliers in Bangladesh since 1982 and opened a production office in Dhaka in 1983,” said Persson.
Currently H&M purchases woven garments, knitwear items, home textile, under garments and trousers from nearly 250 factories in Bangladesh.
The company also outsources from China, Vietnam and Cambodia.
As a company with a clear commitment to workers' rights and to doing business in Bangladesh, H&M looks forward to prompt action regarding the minimum wage issue and the question of annual wage reviews for workers, Persson said.
Founded in 1947, Hennes & Mauritz -- popularly known as H&M -- has around 2,600 stores across the world. H&M operates under five brands: H&M, COS, Monki, Weekday and Cheap Monday.
In November last year, McKinsey & Company, a global management consulting firm, said Bangladesh's apparel exports could triple to $42 billion by 2020.
McKinsey also said Bangladesh's high growth in the readymade garment sector would continue for a decade. In 2011-2012, Bangladesh exported garments worth $19.09 billion.