Yesterday H&M announced that it may raise clothing prices in the future in order to pay better wages to some of the textile workers it employs, most of whom are the worst-paid in the world.
It's no secret that large apparel companies rely on shockingly underpaid workers in third-world countries in order to have their wares manufactured cheaply: in Bangladesh, the world's second-largest apparel exporter after China, the minimum wage is currently about $70 per month (up from $37 per month, earlier this year). And, though H&M did sign the legally binding Bangladesh Safety Act promising to pay higher wages, improve factory safety conditions and permit workers to unionize, $70/month is simply not a liveable wage.
According to Helena Helmersson, the head of sustainability at H&M, higher retail prices "might be a possibility," but they probably won't happen anytime soon. Nonetheless, several are seeing the willingness to even discuss raising prices as a heartening sign. "It's the first time ever they have said they were willing to raise prices and that consumers were now ready for that," Viveka Risberg from Swedwatch told the AFP. "It's going to take years to get to a living wage in Bangladesh but I'm more hopeful now."
Helmersson says that H&M will use its considerable influence and size in order to push for improved working conditions in several ways: fairer wages, training for workers and recognizing the legitimacy and necessity of trade unions. She also states that the company is lobbying governments to raise national minimum wages, which is good. However, history has shown that companies will go wherever has the cheapest, most exploitable work force: if the minimum wage increases in Bangladesh but not elsewhere, there's nothing to stop big manufacturers from moving their factories out of the nation. (Hooray for unfettered capitalism.) Tellingly, Bangladesh's GDP is $115.6 billion, which is less than the total annual revenue of many apparel companies who produce goods there — H&M's, for instance, was $126.9 billion in 2010 — and eighty percent of their economy is based in apparel and textile manufacturing.
H&M has set a goal of raising the wages of 850,000 textile workers worldwide by 2018. Let's hope more companies follow suit.
"H&M May Raise Prices in Order to Pay Workers More" [HuffPo]
Image via Getty.