HM May Raise Prices to Pay Workers More

H&M May Raise Prices to Pay Workers More

"It's the first time ever they have said they were willing to raise prices and that consumers were now ready for that," said Viveka Risberg from Swedwatch, which monitors Swedish multinational corporations.

STOCKHOLM -- The Swedish fashion giant H&M said today that it could raise retail prices in the future in order to pay better wages to some of the world's poorest textile workers.

The announcement came at a meeting with pressure groups in Stockholm where H&M unveiled plans to improve pay rates for textile workers in countries such as Bangladesh where the minimum wage is less than $70 (50 euros) a month.

Helena Helmersson, head of sustainability at H&M, told AFP that higher retail prices "might be a possibility" in the long term but that customers should not expect any price hikes in the near future.

Some corporate watchdogs saw the acknowledgement as a significant breakthrough.

"It's the first time ever they have said they were willing to raise prices and that consumers were now ready for that," said Viveka Risberg from Swedwatch, which monitors Swedish multinational corporations. "It's going to take years to get to a living wage in Bangladesh, but I'm more hopeful now they have opened up to involving all the stakeholders -- the unions, the workers the suppliers and the government."

Policy Unveiled Last Month

H&M first announced its Fair Living Wage policy in November and said in a statement that "all textile workers should be able to live on their wage" but that progress towards that was too slow in some countries where many workers still live below the poverty line.

Helmersson said the company would use its size and influence with suppliers to push for fairer wages, training for workers and recognition of the role of trade unions in pay negotiations.

She added that H&M was also lobbying governments to raise minimum wage levels, and introduce annual reviews, pointing to the recent hike to $67 per month introduced by the Bangladeshi government as one sign of improvement.

However, pay hikes alone may not be enough to raise some workers out of poverty.

"We can set goals to make sure the right pay structures are in place with our suppliers," Helmersson said. "But when it comes to the result ... one of the challenges is that when you raise wages -- we've seen this in Bangladesh -- rents are also raised and food prices go up. So they have to find a way to continuously review wages."

The company has set a goal of raising the wages of 850,000 textile workers worldwide by 2018.

Copyright Agence France-Presse 2013

TAGS: The Economy
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