H&M, the world's second-largest clothing retailer, unveiled a plan on Monday, Nov. 25, to pay a fair "living wage" to approximately 850,000 textile workers by 2018, saying governments were acting too slowly.
"It has always been our vision that all textile workers should be able to live on their wage," said Helena Helmersson, global head of sustainability at H&M, at a conference on living wages in Berlin. "We believe that the wage development in production countries, which is often driven by governments, is taking too long."
The company plans to restructure pay scales by reviewing its own purchasing practices and ensuring that workers' wages are negotiated and reviewed annually in a process that involves democratically-elected worker representatives or trade unions.
Suppliers in Bangladesh and Cambodia will be the first to see compensation changes within a year. From there, the remaining 750 factories H&M works with will also be reviewed. Helmersson said that 90 percent of workers sewing H&M clothes in Bangladesh already earn more than the minimum wage.
Low wages in Bangladesh, Cambodia, China and Vietnam in recent years have attracted more retailers aiming to find even cheaper sourcing. Bangladesh's garments sector has become a $22 billion industry that accounts for four-fifths of exports, supplying retailers such as Walmart (NYSE: WMT) and Primark, as well as H&M.
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