H&M to Pay All Textile Workers Living Wage by 2018

An H&M shop at the Beaugrenelle shopping center in Paris, Oct. 22. (ERIC PIERMONT/AFP/Getty Images)

Hennes & Mauritz AB (H&M) laid out plans on Monday to pay all textile workers a living wage by 2018.

“We believe that the wage development, driven by for example governments in some countries, is taking too long, so we want to take further action and encourage the whole industry to follow,” H&M stated on its website. “With size comes responsibility and we have the ability to contribute to change.”

Swedish H&M has stores in over 40 countries and is the second largest clothing retailer in the world after Inditex SA, the parent company of Zara. 

The company said providing a fair living wage would not negatively impact the prices of its products. “We are willing to pay more so that the supplier can pay higher wages,” H&M stated. The move would concern about 850,000 textile workers, mostly in Asia.

H&M has been working on the plan for the past year now. It wants to start with two model sites in Bangladesh and one in Cambodia in 2014. By 2018, all 750 factories it uses should be covered.

More than 90 percent of textile workers in Bangladesh earn more than minimum wage but still too little to live on, H&M stated. Garments make up 80 percent of Bangladesh’s exports and low wages aren’t the only concern. 

Earlier this year, a Bangladesh garment factory collapse killed 1,130 people and left more injured. Protests followed and factory owners then agreed to raise the minimum wage. The incident led to a safety pact between North American and European retailers announced earlier this month. 

H&M, which does not own the collapsed factory, was the first company to sign on and urge Bangladesh and Cambodia to raise the minimum wage.

Bangladesh is in the process of raising its minimum wage from $38 a month to $67, but many say it is still not enough. 

Anannya Bhattacharjee, the coordinator for the Asia Floor Wage Alliance, told the Wall Street Journal that $320 monthly is needed to support a family. Starting wages across Asia have not risen despite high inflation in recent years, she said.