BERLIN — Living wages as both a human right and a corporate responsibility was the theme of a two-day conference gathering government, manufacturing and labor specialists in the German capital that wraps up today.
This story first appeared in the November 26, 2013 issue of WWD. Subscribe Today.
Nearly 200 participants registered for the European Conference on Living Wages, hosted by Germany’s Federal Ministry of Economic Cooperation and Development, the Ministry of Foreign Affairs of the Netherlands and Round Table Codes of Conduct, a German forum focusing on social standards in global supply chains. Attendees included representatives from Primark, Adidas, Puma, Esprit, G-Star, C&A and Marks & Spencer.
Helena Helmersson, head of sustainability for H&M, delivered the conference’s keynote speech Monday, entitled “Living Wage — A Shared Responsibility.”
Helmersson laid out the Swedish fast-fashion giant’s road map to a fair living wage in the textile sector, unveiling an action plan that addresses pay over both the short and long term, as well as improving purchasing and supplier practices, aiding workers’ rights and training, and encouraging government responsibility.
The project includes implementing a living wage that covers workers’ basic needs; this will be implemented in model factories, from which the company will buy 100 percent of the capacity produced during a period of five years. Three model factories, two in Bangladesh and one in Cambodia, will be running the plan by 2014; H&M currently sources from 1,800 factories.
By 2018, all of H&M’s strategic suppliers are expected to have pay structures in place for a fair living wage; subcontractors will also be held to the same standards and auditing.
“Our role is to influence the process of fair living wages, not to impose specific wage levels,” said Helmersson, adding that these should not be set by parties thousands of miles away from the workers concerned, but instead negotiated locally.
According to the company, it is already paying workers above-average rates. In Cambodia for example, Helmersson pointed out, textile workers at H&M suppliers earn 75 percent more than agricultural workers and are compensated at the level of local civil servants.
In an interview, Helmersson said H&M had been developing the road map over the last eight months, but working on related issues for years, which include raw materials, such as cotton sourcing, in the Better Cotton initiative. By 2020, Helmersson explained, the goal is to be using all sustainable cotton. Still, she said, the company has to work in the areas where it has the most leverage to make change; working with other brands while taking a leadership role, and not waiting for governments to raise wages.
“This is the first time where any brand presents a plan that is holistic with both what can we improve, but also how can we work with other stakeholders,” she said.
The plan established in countries such as Bangladesh will also inform the planning and launch of new production centers, such as Ethiopia, which Helmersson said H&M is currently trying out.
The Bangladeshi government last week agreed to raise the country’s monthly minimum wage by 77 percent to 5,300 taka, about $68, and to allot a 5 percent yearly basic salary increase. The wage increase goes into effect Dec. 1. However, Lilianne Ploumen, Dutch minister for foreign trade and development cooperation, told the conference crowd that while the step was a huge improvement, the figure did not reach the $84 living wage rate decided upon by researchers in the Netherlands at the request of the Dutch embassy in Bangladesh. She encouraged the industry to push forward on the issue.
“I would like to see more fashion houses and retailers here in Europe working together towards standards for living wages and supply chain. Most companies would like to see the same. But I have had to take some to task for failing in their duty,” Ploumen said.
On several occasions during the first day’s sessions, labor and government speakers concluded that brands would probably have to raise prices to assist in the raising of wages.
H&M’s Helmersson said from where she’s sitting, she doesn’t see a one-to-one connection; fashion can be both democratized and responsible. A fair living wage can be profitable for both companies and suppliers, she insists.
“I see many brands having much, much higher prices in the stores than we have, and we share the factory, so we know it’s the same working conditions. So I more think that it’s related to the size of a company. If you’re a big company, you know you have a huge responsibility. And then you act upon that. So I think it’s a shame to kind of talk about good prices as something bad.”
The conference concludes with the completion of an action plan that will provide recommendations for addressing the challenges of working toward a living wage for workers in international supply chains.