H&M links affordable clothing, fair wages – The Columbian

WASHINGTON — The videographers and photographers were joined by protesters outside the brightly lit Howard Theatre on Monday evening in a familiar collision of politics and pomp that serves as a reminder that nothing in this global village is ever quite simple. The media and rabble-rousers were there to welcome guests to an intimate awards dinner honoring two men and one woman for their commitment to economic empowerment, fair wages and fair trade.

The bon mots about their good works were washed down with cocktails. But the evening was also accompanied by placards warning about “corrupt” governments, fuzzy numbers and questions bordering on the existential.

The Global Fairness Initiative, founded in 2002, is a Washington-based nonprofit with a board of directors that reads like a United Nations roster and includes former President Bill Clinton. The occasion was the group’s fifth annual Fairness Awards, which celebrate individuals — not organizations — that have “committed themselves and their career” to helping to end the cycle of poverty, says Caleb Shreve, executive director of GFI.

This year’s honorees included Robert Zoellick, former president of the World Bank, and Nani Zulminarni, who focuses on women’s empowerment in Indonesia. Karl-Johan Persson, the boyish president and chief executive of H&M Hennes & Mauritz, was also honored.

Persson’s grandfather Erling Persson founded H&M as a women’s clothing store in Sweden in 1947. Today the company has 3,400 stores in 55 markets and employs about 100,000 people. It is known for its bargain-basement prices and attention to trends. It most recently made fashion news with its collaboration with American designer Alexander Wang, who produced a wildly popular capsule collection of athletic-inspired sportswear that, upon its release, crashed the company’s website.

Before the awards dinner, the fashion brand was the focus of the handful of protesters from the Solidarity Movement for a New Ethiopia. They raised concerns about the company’s role in cotton farming in the east African country and gently cautioned the company to beware of corrupt government officials. “As a business with high ethical standards, you will face significant challenges in partnering with Ethiopian government-controlled businesses,” read the group’s open letter to Persson.

Under Persson’s leadership, H&M has become known for taking the lead on a host of fair trade and environmental concerns. It is one of the largest consumers of organic cotton. It has been testing a recycling initiative to reduce the garment trade’s contribution to landfills. And it is working with several factories in Cambodia and Indonesia that aim to pay workers a fair wage — that is, one that is well above the minimum.

“Over the years of knowing the company and seeing how they respond to social responsibility … we feel they’ve taken very progressive steps in addressing difficult challenges that other buyers in the garment sector have followed,” Shreve says. He also points to Persson’s work with the family-funded, independent H&M Conscious Foundation, which focuses on education, clean water and supporting women.

H&M’s choices — to work with factories that pay higher wages, to use organic cotton and so forth — have cost the fast fashion behemoth money. “As a (publicly) listed company there’s enormous pressure to deliver quarterly results,” Persson said in an interview before dinner. “All other things equal, profits would be higher. But we believe in the long-term business case. We sacrifice short-term gains.”

“I think it’s possible. I know it’s possible to be a leader for sustainability and offer fashion and quality at great prices.”

It is those low prices, however, that contribute to the downward pressure on wages, that encourage consumers to treat H&M’s merchandise as disposable. “We don’t think of our garments as disposable fashion. We’re always investing to improve the quality,” says Persson, who was wearing a black H&M jacket and narrow trousers. Besides, “if we were to consume less of everything we don’t need, it would have quite disastrous consequences for the economy.” Shopping, says the merchant, is good. And it can be done conscientiously.

The company’s recycling program has customers turning in their old clothing — any brand — into H&M stores. Ultimately, the company hopes the piles of old jeans and T-shirts will be reborn as usable fabric that can be stitched into fresh stock for its stores, a process that would essentially transform garment manufacturing into a self-sustaining cycle. Now, the company donates most of the discarded clothing or sees it recycled for industrial purposes.

H&M is also introducing consumer labeling that would give shoppers information about how and where a garment was produced — offering them a quick measure of an item’s environmental and social impact. “We are trying to make (customers) more engaged,” Persson says. “Most people are not quite there.”

Finally, and perhaps, most important, the company has been working with three “role model” factories — one in Cambodia and two in Bangladesh — where workers receive what H&M describes as a fair wage. This comes in the aftermath of the tragic Rana Plaza collapse in Bangladesh that killed more than 1,100 people. While the factories there did not produce H&M clothing, the retailer took the lead in a deal to encourage greater oversight of the garment industry there. Meanwhile, workers in Cambodia recently protested in support of better wages there, asking for $177 a month.

“The tricky part is in the production companies where we don’t own the factories,” Persson says. “We’re not setting the wages.”

Nonetheless, about a year ago, Persson met with government officials in both countries. The company helped to bring labor unions to the table. Early evaluation of the Cambodia factory shows reduced overtime, better working conditions and a pay scale that takes into account experience. The result is higher wages. How high? The company did not say. Unconfirmed estimates had monthly wages approximately 21 percent higher than Cambodian garment workers had been trying to win on their own. An H&M spokeswoman said the company expects to release final wage numbers on all three factories in the spring.

The question of fair wages has long been one that draws debate. What is a fair wage for a seamstress in Bangladesh working for the world’s second largest retailer — after Zara — with sales of $20 billion? The answer, Persson believes, will be sussed out through negotiations between labor, government and suppliers — with an assist from H&M. “Higher wages equal higher prices,” Persson says. Is his company willing to absorb that cost? “Yes,” he says. “It’s already happening.”

“It’s costing us more, but it’s not costing the customer more.”

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