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H&M plans to pay living wage to 850,000 textile workers

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The world's second-largest clothing retailer announced today that it has taken the first steps to work with its suppliers to pay garment workers a living wage by 2018. The initiative, the company says, will impact about 850,000 workers.

The company plans to begin rolling out the initiative sometime next year at two garment factories in Bangladesh and one factory in Cambodia. As part of H&M's "Fair Wage Method," the company says it will work with factories to ensure that workers are receiving proper compensation for their work and overtime work. If all goes well at the test sites, H&M will scale up the program to 750 factories -- where 60 percent of its products are produced -- by 2018.

"We believe that the wage development, driven by for example governments in some countries, is taking too long, so we want to take further action and encourage the whole industry to follow," H&M said in a statement on its website.

But, H&M says, the initiative won't have a negative impact on the price of its products.

"We are willing to pay more so that the supplier can pay higher wages," the company said in a statement. "It is a collaboration between H&M and our suppliers. We believe that our purchasing practices will lead to better efficiency and productivity. Long term this will be beneficial for both us and our suppliers."

The announcement comes after deadly protests in Bangladesh -- H&M is the country's largest buyer of clothing -- earlier this month over low wages and poor working conditions that shut down about 140 garment factories.

H&M was the first retailer to sign a legally-binding safety pact to improve working conditions following the collapse of a garment factory in Bangladesh that killed more than 1,000 people earlier this year.

— By on November 25, 2013, 11:47 AM PST

Tyler Falk

Contributing Editor

Tyler Falk is a freelance journalist based in Washington, D.C. Previously, he was with Smart Growth America and Grist. He holds a degree from Goshen College. Follow him on Twitter. Disclosure