H&M Hennes & Mauritz AB (HMb.ST), the world’s second largest fast fashion group, released its 2013 sustainability report on April 10. This report is the 12th consecutive year that H&M Group has released this report. In the report, H&MHennes&Mauritz AB (HMb.ST) once again called for raising supplier wages to improve the treatment of industrial workers in Southeast Asia, a major region for garment exports.
At the end of 2013, H&MHennes&Mauritz AB (HMb.ST) had already warned that it would likely increase product retail prices in the future to cope with the cost pressure caused by improving the treatment of textile workers in some countries. H&MHennes&Mauritz AB (HMb.ST) first announced the “Fair Living Wage” strategy in November 2013, planning to provide “Living Wage” basic living wages to approximately 850,000 textile workers at 750 strategic suppliers by 2018 to ensure that all textile workers Able to live a basic life on salary.
According to reports, H&M Hennes & Mauritz AB (HMb.ST) has as many as 1,900 clothing supply factories employing 6 million workers, and H&M became the first brand to sign a building safety and fire agreement after successive garment factory disasters in Bangladesh.
At the end of April 2013, an 8-story building in the suburbs of Dhaka, the capital of Bangladesh, collapsed, killing more than 1,000 people. It attracted widespread attention from the international community and labor rights organizations, and global apparel retailers were struggling. There was endless debate. Although more than 150 retailers or brands have announced that they will conduct thorough safety inspections of 1,500 factories in Bangladesh by the end of August 2014, no action has been taken so far. According to Bangladeshi authorities, there are currently less than 200 factories in the country that meet safety standards, and it will take at least five years to inspect the entire industry. In the summer of 2013, 17 North American retailers, including Wal-Mart Stores Inc (WMT.N) and Gap Inc (GPS.N), launched a five-year security plan for Bangladesh. The plan included inspecting all products within one year. factory safety issues at its Bangladeshi suppliers, while the retailer spent $42 million setting up a foundation to implement the plan. However, the detailed plan and implementation of the plan have not yet been released.
The wages of garment workers in Bangladesh are usually only half of those of their Chinese counterparts. According to World Bank data, worker wages in Bangladesh were at the bottom in 2010. Business owners said the average wage in the country was US$64 per month, and the minimum wage in the garment industry was 3,000 taka, about 38 US dollars. This $38 was obtained due to the violent protests of Bangladeshi workers in 2010, and it has doubled from before.
According to data from the U.S. foreign aid agency USAID, in 2009, a pair of chinos with a material value of US$4.60, Bangladesh’s export price to retailers was US$5.37, which was US$0.92 less than Chinese exporters, which shows that its labor force The cost is so low. The average time to make a garment in Bangladesh is 40 minutes, and labor costs are only $0.32 per hour, compared with $1.44 in China. According to Reuters statistics, the average operating profit of the clothing retail industry is 15 times, and the profit margin is 5-10 times.
Due to ongoing protests by garment workers, Bangladesh has previously raised the minimum wage to 5,300 taka, approximately US$70. However, the protesting workers’ demand was raised to a monthly minimum of 8,114 taka, which is approximately US$104. According to data released by the Japan External Trade Association at the end of 2012, the average annual salary of a garment factory worker in Bangladesh is only US$1,478, while that in India is US$4,577, which is almost three times that of Bangladesh.
In addition to Bangladesh, Cambodia also has a similar industrial environment. On New Year’s Day in 2014, riot police in Phnom Penh, the capital of Cambodia, opened fire on garment industry workers who took to the streets to protest, killing at least 3 people and injuring 10 others. About 40 others were arrested. The protest was because industry workers were unable to meet workers’ demands after the Cambodian Ministry of Labor announced that the minimum wage in the garment industry would be increased by 25% to US$100. Cambodian garment workers demanded that the minimum wage be doubled to US$160 per month. The Ministry of Labor demanded that the striking workers stop the strike and threatened to take legal action against workers participating in the strike. However, it failed to stop the angry workers, which led to the tragedy.
