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Will H&M make good on its "living wage" promise?

Picture shows a 'Hennes & Mauritz' (H & M) shop taken on October 22, 2013 at the Beaugrenelle shopping center in Paris.

Yesterday, clothing-retailer H&M said they would improve worker conditions in factories by raising their pay.  They didn't give a dollar figure but said workers in Cambodia and Bangladesh will be paid under a fair wage method and making a living wage by 2018.

Lydia DePillis covers business for the Washington Post and wrote about H&M's decision.

On if we can trust that H&M's wage committment:

"H&M is saying alot of the right things. They're saying that wages haven't kept up even with the minium wage standard that Bangladesh says it's now trying to implement. And it recognizes the benefits of having higher wages in its factories -- meaning fewer strikes, less overtime, happier and healthier workers. But the issue that people who have been watching this issue for a long time raise is that this has been under discussion for a decade-and-a-half now." 

On why its taking so long:

"One factor will handle a number of retailers, so all of those retailers would have to say okay factory we'll all pay this wage. H&M is trying to pull other retailers along and work with governments to raise standards so that it can avoid taking any kind of financial hit."

On how consumers will know if H&M has made good on its promise:

"You're not going to be able to tell very easily because labor is such a small component of the sitcker price on the stuff you buy. It only accounts for one or two percent so there's no way of knowing if any increase in price is because the cost of raw materials has gone up or if it cost more to transport good or if the wages have gone up ... You can look at the wage that H&M is paying in its factories and right now they're not any higher than WalMart or Nike, so at the point when there starts to be a differential, that's when you would know."

About the author

Lizzie O'Leary is the new host of Marketplace Weekend.

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