H&M called out for failing to pay all its workers a fair, living wage by 2018

London - Although Swedish fashion company H&M previously pledged to pay its 850,000 garment workers a 'fair living wage' by 2018, the group has since changed its strategy. Now the Clean Clothes Campaign, the industry’s largest alliance of labour unions and non-governments organisations, has accused the H&M Group of trying to hide its unfulfilled commitments regarding living wages in its 2017 Sustainability Report, but H&M maintains that its vision is to ensure “all textile workers should earn a wage they can live on.”

The Clean Clothes Campaign (CCC) argues that the H&M Group is “making bold claims” about progress in the area of providing fair jobs and has “strongly refuted the self-congratulatory statements” made in its 2017 Sustainability Report. H&M previously stated that it aimed to ensure its strategic suppliers had pay structures in place to pay a fair and living wage by 2018, reaching some 850,000 garment workers. However, since then the H&M Group has reduced this aim and set itself the goal to help supplier factories they work with the most, which represent 50 percent of its product volume, to implement improved wage management systems. According to H&M’s 2017 Sustainability Report, this wage management system has been implemented at 227 suppliers factories, reaching 375,000 workers (representing 40 percent of its product volume).

The H&M Group refutes claims it is failing to fulfil its commitment on living wages

While the H&M Group has yet to comment on why its changed its commitment, the CCC notes that the fast-fashion group fails to state whether or not its garment workers are being paid a fair and living wage. “H&M apparently does not care anymore about the wage levels that actually arrive in the workers' pockets,” said David Hachfeld of Public Eye (CCC Switzerland), in a statement, adding, “H&M is now even less transparent, which is a direct contradiction to the 2013 promise to report in a transparent way about the progress made.” Although the CCC notes that average wages at supplier factories are completely absent from the report, that there is no information on wages at supplier factories per country or any wage development data for the 227 factories using the Fair Wage method - H&M points out otherwise.

“We would first like to point out that the missing information the CCC refers to - the data on average wages for 2017 - is publicly available at our website,” said Ulrika Isaksson, spokesperson for the H&M Group to FashionUnited. “Our vision is that all textile workers should have a wage they can live on. This is important to us and we have a large responsibility. Even if we cannot decide directly what workers are paid, we can support the foundation for a fair living wage,” she added. Nevertheless, the CCC feel as if the data shared by the group is still insufficient in clearly indicating whether or not garment workers are actually earning more as a result of its wage improvement management systems.

“The meagre data that was available in previous years showed only weak real wage progress in the majority of H&M production countries, and where progress was made, this was mostly because of legal minimum wage increases rather than due to H&Ms own efforts,” countered Hachfeld. In response to these accusations, Isaksson refers to another one of H&M’s goals for 2018, outlined in its 2017 Sustainability report. It aims to ensure that majority of its suppliers, representing 50 percent of its product volume, have a democratically elected worker representative in a place, as well as a stable and transparent wage system which ensure wages take workers’ skills, experience, performance and responsibility into account.

“We are confident we will reach our goal by end 2018,” stressed Isaksson. “We have already achieved one part of the goal; those supplier factories we work with the most should have democratically elected representatives in place. We have so far covered 458 factories (representing 52 percent of our product volume) with our workplace and industrial relations programmes. We will cover an additional 223 factories during 2018.”

In addition, the H&M group believes that in order to bring around real change within the entire industry, collaboration is needed between brands, trade unions, organisations and suppliers, which is why it recently joined forces with 16 other brands and trade unions to form the ACT platform. “With our size and our collaboration with other brands, we can have a dialogue with them – on our own or together with other brands.”

The H&M Group: “2018 is just a milestone on this journey towards fair living wages”

“To have purchasing practices that support and enable our suppliers to pay their employees a fair living wage is another crucial part of our strategy, which we also address together with other brands and IndustriALL within ACT,” continued Isaksson. The H&M Group noted it should always provide reasonable lead times, fair pricing, timely payments and a transparent and open dialogue with its supplier and continues to improve its purchasing practices, “for instance by further strengthening our long-term commitments to our suppliers, and thereby support suppliers in the progress towards a fair living wage.” But the lack of transparency regarding how the H&M group take on purchasing practices which will enable higher wages is still insufficient to the Clean Clothes Campaign.

Which is why the CCC is repeating its call for greater transparency, which it included in a letter sent to H&M’s Board of Directors, CEO Karl-Johan Persson and Anna Gedda, Head of Sustainability on March 19. In the letter, the CCC calls on H&M, as an industry leader to: publish information on the Living Wage pilot projects its carried out as part of its commitment for a fair and living wage, including concrete factory information, wage levels and development during the pilot; define a “fair living wage” as well share information on the methodology it uses to calculate a “fair wage” and ensure it is paid; set minimum acceptable wage levels for its suppliers based on the fair wage in all its production countries; and share a cost breakdown of its pricing structure, which explains how labour costs are calculated.

Isaksson confirmed to FashionUnited that the H&M Group has received CCC and that they will respond to it in due time.

Photos: Courtesy of the H&M Group
Wage Progress from H&M's 2017 Sustainability Report