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H&M Plays Devil's Advocate in Bangladeshi Wage Debate

Photo by Brian Harkin
Photo by Brian Harkin

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After a series of factory fires brought Bangladesh to the forefront of the conversation about worker conditions, H&M has consistently championed raising factory workers' wages in the country. One of the Swedish retailer's strategies for differentiating itself from other fast fashion giants is its vocal commitment to human rights and sustainable practices.

But H&M noted yesterday that a wage increase in Bangladesh could cause other retailers to pull out of the country, since the bump would either have to be taken out of overall profits or be passed on to the consumer (Don't fear for your inexpensive knits; H&M is going with the former option). Since garment manufacturing makes up more than three-quarters of its total exports—largely thanks to European and US fast fashion chains—this might be taken as a warning that as the retailers go, so will the jobs.

Speaking with German daily newspaper Die Welt (via BoF), the Swedish retailer's CEO Karl-Johan Persson said, "After all, many companies source from Bangladesh, not just us. The country needs to take into account that jobs could be lost to other countries." Persson continues with context, "In Bangladesh, the clothing industry offers 4 million jobs that are relatively well paid compared with others. Textile workers earn about as much as teachers."

As mentioned above, H&M is taking the extra cost out of its profits and is also staying competitive with COS and & Other Stories brands, so adjustments won't rock the boat too much. But Persson also told Die Welt that "the Swedish government and labor groups were also encouraging H&M to source more from Africa," specifically Kenya and Ethiopia.
· H&M CEO Warns Rising Bangladeshi Wages May Spook Some Firms [BoF]
· H&M's Third Conscious Exclusive Collection is Simply Stunning [Racked]