H&M and Fair Living Wages?

Would like to know more about whether H&M pays living wages in the production and what it promised in 2013? (All quote in blue.)

The promise

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In 2013 in Berlin, Helena Helmersson of H&M announced in a 13 Minutes talk that H&M has the vision that „a fair living wage, covering the workers‘ basic needs should be paid by all of our suppliers„. She said that H&M „has an obvious role in this“ – and announced that they would e.g.  „improve purchasing practices to ensure that it enables our suppliers to pay a fair living wage“ and that „By 2018 all suppliers should have functioning pay structures„. H&M wanted to use the Fair Wages methodology. I was at the conference and thought at the same time:

  • Wow, couragous!
  • What exactly does she mean?!

On the same day, November 25th, Reuters titled:

H&M aims to pay all textile workers „living wage“ by 2018.“

stating:

„Hennes & Mauritz, the world’s second-largest clothing retailer, laid out a plan on Monday to pay a fair “living wage” to some 850,000 textile workers by 2018, saying governments were acting too slowly.“

Reuters obviously constructed a fact that H&M never really announced.

In 2018 after the CCC campaign, H&M re-announced its goals:

  • Ensure that supplier factories producing 50% of H&M group’s product volume are implementing improved Wage Management Systems by 2018.
  • Ensure that supplier factories producing 50% of H&M group’s product volume have democratically-elected worker representation in place by 2018.
  • Ensure that 100% of supplier factories In Bangladesh have democratically-elected worker representation in place by 2018.
  • 90% of business partners should regard H&M group as a fair business partner by 2018.

Obviously the goals did not include paying living wages until 2018 (as Reuters claimed).

See also my answer to feedback from the CCC here.

The Campaign

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Due to the huge impact H&M has, the Clean Clothes Campaign followed H&M on their quest and when the H&M Sustainability Report 2017 came out, the CCC concluded that H&M is unclear and had „watered down“ its 2013 promise.

„… supplier factories representing 50% of product volume using the Fair Wage method. Whether or not this actually leads to the workers being paid a living wage by 2018 is not addressed at all in the report.“

On Mayday 2018 the CCC started its „Turn Around H&M“ campaign to move H&M to keep its promises.

„Starting on 1 May and continuing throughout 2018, Clean Clothes Campaign (CCC) is placing the spotlight on H&M. We are asking the brand to turn around and stop heading in the direction of letting down 850,000 workers who are waiting to start receiving living wages – as H&M vowed they would by this year.“

„In its 2013 “Roadmap towards a fair living wage” H&M announced: “H&M’s strategic suppliers should have pay structures in place to pay a fair living wage by 2018. By then, this will reach around 850,000 textile workers.” (emphasis added) At the time, those workers were toiling away in 750 factories that produced 60% of what stacked H&M’s shelves around the globe.“

The review

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In December 2018 H&M strikes back with a „Review of H&M group’s roadmap to fair living wage“ conducted by the Ethical Trading Initiative UK (ETI). In the following paragraphs you find ETI’s „overall observations“ with some of my personal annotations:

„H&M group’s bold decision to devise a strategy to address the complex wage issue is unprecedented for an apparel brand and should be applauded.“

This is basically the „wow“ that I was thinking in 2013.

„H&M group’s holistic, multi-faceted and interconnected approach is coherent and has the potential for impact. But at the outset, it may not have given sufficient consideration to the magnitude of the challenges involved in each of the four components, the challenges arising from their complex, interrelated nature, or the differing lengths of time required to drive change on each component in different production countries.“

The authors praise the approach – but criticize that H&M did not sufficiently consider the challenges. This sounds a little strange, since the challenges are very clear to anyone working in this field. See my ILO paper on the challenges of implementing living wages.

„Importantly, H&M group has shown flexibility and perseverance, and a willingness to learn and adapt, adjusting its plans in recognition of any tactics that were not as successful as anticipated. It did not always communicate or explain these evolutions clearly, however, which gave rise to perceptions among some stakeholders that it was “watering down” the original strategy.“

Yes, companies must be open to adapt. And communicating wages paid clearly seems to be a challenge for companies. But the maybe most factual data collected from factory audits are wages. Plus we have IT, blockchain etc. H&M’s Arket is actually testing a code scan per item. Plus the most relevant issue for consumers are often the wages. It believe it is possible and overdue that companies provide data on the wages of the factory / item to consumers at the POS.

„There is some evidence that the four components are progressing. To date, 500 factories supplying the H&M group are working to improve their wage management system, of which 336 factories participated in H&M group’s collaboration with the Fair Wage Network (FWN) to implement the Fair Wage Method from 2014-18. The followup study on 198 of the 336 factories supported by the Fair Wage Network found that slight wage increases have occurred in the majority of factories. This was partially due to minimum wage increases in the respective production countries, although the FWN notes that wage increases at participating factories were often higher than the national average.“

So many of the strategic suppliers are working on implementing Fair Living Wages – but apparently it still occurs that not all receive a fair wage. I am missing data here, so I will need to read the report.

„There is a clear strategy in place for purchasing practices, although this may not yet be fully implemented among H&M group’s strategic suppliers, as intended. It will be important to ensure that all H&M group’s buyers are fully supporting and implementing this strategy.“

This is great that there is a strategy in place, because you do not improve wages without purchasing policies. Now, the question is when will it be fully implemented? Obviously five years was too little time for this, or H&M put too little resources into this challenge.

„While we acknowledge the complex and inherently long-term nature of H&M group’s Fair Living Wage strategy and the incremental rise in wages for some workers, our study indicates that (even in its top-performing factories) some workers in H&M group supplier factories still report that, at this stage, wage levels are too low to cover their living costs.“

See above: Five years was obviously too little time for this, or H&M put too little resources into it.

„There was some ambiguity and confusion at the launch of the FLWR and certainly lessons to be learned in terms of coherent communication of this strategy and its objectives. However, we do not believe that the intent of H&M’s FLWR should be assessed against the measure of whether 850,000 workers at strategic suppliers’ factories achieved a living wage in 2018.“

I do not understand this. Why should someone not be measured against the promises he does? Why make big promises, if you cannot keep them – that might come close to greenwashing. Or is it thinking big and making big promises, like „Move fast and break things“ – so why not measure them against this?

„H&M group was explicit that it was not going to establish specific wage levels or rates at the outset of this work. We recognise that those calling for H&M group to demonstrate that its suppliers are paying workers living wages may have sought a different and more direct approach to raising wages. However, we do concur that there has been (to date) a lack of robust data demonstrating the impact of the FLWR on wages levels (see final point below)“

Yes, H&M did not announce to pay certain wage levels – but to implement methods. And regarding living wages, you always have the same problem: if a company says it pays living wages, anyone can criticize it, as there is no common definition of living wages.

„Given the emerging importance of the Action, Collaboration, Transformation (ACT) initiative, which brings together 20 brands to drive improvements in wages in the garment sector, it is important to note and applaud the leading role that H&M group has played in the formation and strategy development of ACT.“

Yes, ACT seems to be doing great thing – but at the moment it is too early to really evaluate it, as it is focussing on one country only and many things remain unclear to the broader public.

„The evidence we have seen suggests that significant progress has been made toward H&M group’s target of creating systems and instituting social dialogue programmes to facilitate negotiations on wages and working conditions, contributing to improvements in wider wage-setting for the sector.“

„H&M group has taken a leadership position on the wage issue. We have heard from many external stakeholders, and would echo, the significant support for H&M group to continue its effort to improve workers’ wages and working conditions through this strategy, and for other brands to make similar efforts. The company’s work on wages and sustainability is also a source of pride for employees.“

OK.

„The Roadmap and goals have focused on outputs, for example number of factories with wage management systems, or percentage of factories covered by worker participation committees. While this is important to record, we would have also expected a more systematic collection of data on outcomes, such as evidence that improving suppliers’ wage management systems has translated into higher wages, as well as feedback from workers on the effectiveness of worker participation committees. Measuring the overall impact of the strategy in terms of progress towards a Fair Living Wage is also vital.“

Focussing on outputs and not on outcomes seems the most problematic to me. Focussing on outputs does not necessarily correspond to impacts. Therefore, yes, H&M: Please start putting the available data into a system so you can use it to communicate more clearly. I think this would bring the whole industry forward.

What do fair fashion brands pay?

The issue of living wages is relevant and complex. The CCC claims that H&M does not yet pay proper living wages, just like 99% of the fashion industry, who are all focussing on paying minimum wages (which are not enough). Having said this: also most brands listed on our platform only pay minimum wages. Therefore we have decided to looking more into the issue of what kind of living wages brands on GetChanged.net pay. Come and see next year!

Mark Starmanns, GET CHANGED! 

7 Kommentare

  1. Thank you for this interesting piece. I agree with a lot of your observations, but as someone heavily involved in the CCC campaign, I do need to point out that Reuters was not the only one highlighting the living wage promise to 850,000 workers. Many media outlets did, and it was not made up out of thin air. It was included in H&M’s roadmap documents, as you can see for yourself in the „Lost and found“ compilation posted on the campaign website (check the „dossier“ at turnaroundhm.org). It would be great if you could amend the relevant part of the text so it would more accurately reflect the commitment made in 2013 and not make it seem like we’re all just imagining that 850,000 workers were ever part if the picture. Thank you in advance for your consideration of this suggestion.

    Liken

    1. Thanks Neva! If Reuters writes something then it is clear that other media outlets write the same 🙂 – and sure, it is also a question how this was framed by H&M (I did not find the old documents by H&M, only the video). I will surely look into the documents you liked to and see whether the text needs changes. Thanks & best wishes, Mark

      Liken

    2. Dear Neva, I added a link to the document you sent me, but I really cannot find the promise in this roadmap. Or do you mean that this sentence is the promise: „H&M’s strategic suppliers should have pay structures in place to pay a fair living wage by 2018“?!
      Best, Mark

      Liken

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