NEW DELHI : Global fashion brands such as H&M and Gap have promised to increase the cost of Bangladesh-made clothing to compensate for the increased wages of the garment workers there. This comes after protests between police and factory workers in the country, which resulted in the government mandating a 60% raise to the minimum monthly wage to 12,500 taka ($113).
Bangladesh is the world’s second-largest exporter of apparel, and the wage hike is expected to increase costs by 5-6%. Stephen Lamar, CEO of the American Apparel & Footwear Association (AAFA), has stated that the association is committed to responsible purchasing practices to support the wage increases.
Low wages have been a major factor in Bangladesh’s success in the garment industry, which employs around 4 million people. The new wage is still lower than other regional garment manufacturing hubs such as Vietnam and Cambodia, where the average monthly wage stands at $275 and $250 respectively.
Retailers in the US and Europe are the main buyers of Bangladesh-made clothes, and they are facing inventory problems due to a slowing global economy. The AAFA members have requested Prime Minister Sheikh Hasina to review the minimum wage annually to ensure Bangladeshi workers are not disadvantaged.
($1 = 110.0000 taka)