I don’t know if you saw in the media a few weeks ago that H&M CEO Karl-Johan Persson has been labelled an ‘activist’ for approaching the Prime Minister of Bangladesh to call for the minimum wage to be raised. He received a fair amount of praise in the press for doing so. You can read one of the articles for yourself here. But here is why this is simply a ‘greenwash’ exercise.
Karl-Johan Persson went to that meeting knowing that he represents just one brand – a powerful buyer admittedly, but still only one brand in Bangladesh. When governments set the minimum wage in their country for the garment industry, they have to think about their international competitiveness, and are all too aware that multinational fashion buyers as a collective movement will move their production elsewhere if labour costs go up. These fashion buyers hold the power in the wage situation, not the country governments. Even if a few brands pledge to keep their production in country, there is a huge risk for country governments that they will loose the industry.
It is therefore down to the multinational companies, who dominate garment supply chains and have the international reach, to absorb the small increases in production costs that might occur if wages are raised to a living wage level (and we are talking only a few cents per item here). Multinational brands like H&M must be the ones who go first and work with their supplier factories to achieve wage raises. In time, with enough brands doing it, governments may have the confidence to raise minimum wages. But brands must dig in their pockets and lead the way if wages are to budge as they hold all the cards.
H&M knew this when they went to the meeting. This sort of thing is a safe PR stunt to ‘show they care’ without the risk that such meetings will effect profits.