Adidas, Levi’s and 13 More Brands Urge Bangladesh Wage Hike

More than a dozen of fashion’s biggest names are asking the government of Bangladesh to settle on a minimum wage that would cover garment workers’ basic needs, include some discretionary income and take into account the South Asian nation’s persistently high inflation.

The 15 companies, which include Adidas, American Eagle Outfitters, Gap Inc., Hugo Boss, Levi Strauss & Co., Lululemon, Patagonia, Puma, Calvin Klein owner PVH Corp. and Under Armour, further urged that consultations be “inclusive” by embracing a “constructive dialogue” with labor groups, trade unions and other relevant stakeholders.

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“We recognize the value that Bangladesh holds as the third-largest supplier of garments as well as a fast-growing supplier of footwear and travel goods to the world,” they wrote in a letter to Prime Minister Sheikh Hasina dated Oct. 13. “Bangladesh’s commendable sustainability efforts in the garment, footwear, and travel goods sectors have garnered well-deserved recognition. We value this critical partnership.”

Bangladesh, which employs some 4.1 million workers in its booming garment industry, is the world’s second-largest exporter of clothing after China, though the mantle has been seized before by Vietnam, with which it remains in neck-and-neck competition for the position.

When the minimum wage for garment workers was raised to 8,000 Bangladeshi taka ($72.60) per month in 2019, factory employees complained that it still wasn’t enough to live on. One deadly pandemic, a global slowdown and an internationally destabilizing war later, conditions have become untenable, with workers unable to afford food, let alone healthcare or education for their children.

“Living costs are very expensive, living conditions are poor,” said Nazma Akter, founder and executive director of Awaj Foundation, a workers’ rights nonprofit based in Dhaka, and a former garment worker. “Things are going very badly.”

So far, negotiations are in a deadlock: Workers are demanding 23,000 Bangladeshi taka ($208.70), while factory owners, according to a report from the Business Post on Wednesday, are planning to propose a more modest bump to 9,000 Bangladeshi taka ($81.70) because of their own rising costs.

The Centre for Policy Dialogue, a Dhaka-based think tank, suggested earlier this month a minimum wage of 17,568 Bangladeshi taka ($159.40). It said that if buyers increase the prices of products by 7 cents, the hike would not pose an undue burden for factory owners.

The Bangladesh Garment Manufacturers and Exporters Association did not immediately respond to a request for comment.

The brands behind the letter asked that the government adopt an annual minimum wage rather than the five-year cadence it’s been following to “keep up with changing macroeconomic factors.” They also said that the country’s lawmakers can play an important role in facilitating new union registration, condemning threats of violence against union members and “overall fostering an environment that respects workers’ collective bargaining rights and empowers them as essential stakeholders in the
nation’s progress.”

The American Apparel & Footwear Association (AAFA), the trade organization to which most of the letter’s signatories belong, previously condemned the murder of union leader Shahidul Islam, who was attacked following pay negotiations at a factory in Gazipur in June.

“His killing is not only an immeasurable loss for his family and friends but also represents a setback for workers’ rights and the overall welfare of workers in Bangladesh,” AAFA president and CEO Stephen Lamar wrote in a letter to Hasina dated July 27.

In the same letter, Lamar said that the AAFA was closely monitoring the minimum wage review in Bangladesh and that the process provided a “crucial opportunity” to “address existing disparities and to establish fair remuneration for garment workers.”

Adidas, Gap, Levi’s et. al. said that they acknowledged that brands and retailers sourcing from Bangladesh have a role in enabling their requests and that they are “committed to implementing responsible purchasing practices to fulfill that role.”

Akter said that she was glad that the letter was written, though she would have liked to see more emphasis on how brands will adjust their purchasing programs and how they plan to tackle endemic issues such as gender-based harassment and violence, which result in poor productivity and low morale. Without decent wages, she said, workers also find it “difficult to survive.”

According to a dashboard by The Industry We Want, a multistakeholder initiative helmed by the Ethical Trading Initiative and the Fair Wear Foundation, there is a 74 percent gap between the minimum wage and living wage in Bangladesh—the highest disparity out of the nearly 30 countries it looked at.

Dominique Muller, policy director at Labour Behind the Label, a U.K. advocacy group, said that brands need to go further and support workers’ call for 23,000 Bangladeshi taka, even though this is still “far, far below” what would constitute a living wage. So far only Patagonia has publicly declared its support for that specific number.

“Words are easy but the actual reality of paying a living wage and not moving orders to source from the cheapest place is the only proof that brands actually care about their workers,” she said. “Adidas’s operating profit for the quarter to August ’23 was around 176 million euros ($187.7 million) and yet it hesitates to support workers’ basic needs.”

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