Global Fashion Retailers to Increase Clothing Prices in Bangladesh

H&M and Gap, along with other leading global fashion retailers, have pledged to increase the prices they pay for clothing made in Bangladesh in order to support factories in offsetting the higher wages of their workers, according to a U.S.-based association representing over 1,000 brands.

After China, Bangladesh is the largest exporter of garments in the world. After violent clashes between law enforcement and factory employees, the government has ordered a nearly 60% increase in the minimum monthly wage to 12,500 taka ($113) starting in December, marking the first raise in five years.

Stephen Lamar, the chief executive of the American Apparel and Footwear Association (AAFA), confirmed to Reuters that they will indeed raise purchase prices by 5-6 percent to match the rising costs.

We continue to urge the implementation of an annual minimum wage review system to ensure that Bangladeshi workers are not negatively affected by fluctuating economic conditions.

The low wages in Bangladesh have been instrumental in the growth of its garment industry, providing employment to approximately 4 million workers. The economy heavily relies on readymade garments, which make up nearly 16 percent of the GDP.