The Circle’s Living Wage Team consider the impact of COVID-19 on garment workers and the fashion industry and discuss why, more than ever, a living wage needs to be recognised as a fundamental human right.
The COVID-19 pandemic exposes the extreme vulnerability of workers in global garment supply chains as hundreds of thousands are losing their jobs and livelihoods as a result of demand drying up and brands cancelling manufacturing orders.
The pandemic highlights the weak contractual agreements suppliers have with brands and retailers and lays bare the limitations of the current approach to protecting worker’s rights. For years companies have preferred voluntary codes of conduct, arguing that they can self-regulate their behaviour. Recent events show these have failed – and that we need legal mechanisms to strengthen the responsibilities companies have, to uphold the rights of workers in their supply chain. This issue has never been so important. Understanding exactly what those responsibilities entail is key as we go forward into debates about the recovery of garment manufacturing and how to structure a fair and sustainable supply chain. The Circle’s Living Wage Project can play an important role in creating a space for this, providing legal expertise, facilitating discussion and collaborating with key stakeholders to bring legal solutions that will work.
How is COVID-19 impacting garment workers?
The full economic and social impact of COVID-19 on workers in the garment supply chain is as yet unknown, but the effect is global. Economies are slowing, many tipping into recession. Shops have closed, demand for fashion has dried up and companies are facing huge losses in revenue. In an effort to bolster much needed liquidity to keep them afloat, many brands and retailers are aggressively cutting costs overseas, in effect shifting the risk onto their suppliers. As a result, many companies are refusing to honour their contracts with suppliers, either through non-payment of orders already complete or in process, refusal to pay for materials already purchased by factories, cancellation of future orders or forcing the extension of payment deadlines.
The Workers Rights Consortium estimate there are a total of 50 million workers in production factories worldwide. Early indications estimate a total of £20 billion of orders worldwide have been cancelled, and in Bangladesh alone, the second biggest apparel producer, an estimated $6 billion in export revenue is estimated to be lost. This in turn is devastating for textile workers who are losing their livelihoods and sometimes their homes as a result. In Pakistan 1 million workers are set to lose their jobs while reports from Bangladesh indicate some 2.27 million workers are affected by cancelled orders. Many of these workers are young women, often their family’s primary wage earner and the impact on them will be devastating.
There is also the issue of the impact of the pandemic on the workers themselves, who risk exposure and lack essential protection such as face masks. Workers therefore have limited ability to protect themselves and limited access to services such as childcare facilities, medical insurance or hazard pay.
While we recognise that many people are also losing their jobs in the West, here there are regulations around corporate behaviour and employment standards that garment workers in the Global South are not protected by. Additionally, many garment workers live in countries with no social protection mechanisms and having received poverty wages for years have no savings to offer any form of buffer in even the short term, let alone if the crisis continues for months – as is predicted. The nature of global supply chains is such that companies in Western markets have profited for years from cheap labour in production countries and now are able to withdraw without any responsibility towards the millions of workers who have helped generate their huge profits.
What should we expect fashion brands to do?
In the first instance brands and retailers must honour their contracts and ensure that the workers who have made their products are paid, that is the minimum. Secondly, brands need to work with their suppliers and as far as is possible support them to keep their workers employed. For many workers if they lose their employment status, they not only lose their income but also risk falling off the radar completely should any state support to factories become available.
In the coming months, questions around how to establish social protection floors which will support workers will need to be addressed, and brands and retailers must be part of that conversation.
How do I know what brands are doing?
It is difficult to know the details of what individual brands are doing but the Workers Rights Consortium (an independent labour rights monitoring organisation) are tracking brands and their commitment to pay in full for orders completed or in production in countries such as Bangladesh. See here.
Another reliable source of information is Clean Clothes Campaign’s live blog, which is updated daily with news reports, categorised by country, detailing the impact of COVID-19 on garment workers around the world.
Why is this important to the Living Wage Project?
The aim of the Living Wage Project is to bring about legislation in the form of a new EU legal framework, to ensure the payment of a living wage by fashion brands to millions of women and men in global garment supply chains. A living wage is a wage that goes beyond a minimum wage and provides the worker with the means to not just survive but also to put some money aside for education and savings. This means they can provide for their family with a buffer against the worst conditions of poverty. Such legislation is more important than ever going forward. Although we don’t know what supply chains will look like after the pandemic is under control, there is no reason to believe globalisation will markedly change and there is the real possibility that conditions could further worsen for workers in global supply chains as economies move into recession.
Does this change the work of the Living Wage Project?
Yes and No. What the pandemic has shown us more than ever is that voluntarism does not work. The ‘trust’ we have that companies will do the right thing by their workers is misplaced – it’s not enough. Depending upon CSR (corporate social responsibility) to address employment conditions is always going to be piecemeal, and dependent upon the good will and resources of an individual company. To that extent our work going forward on the living wage is critical, strengthening human rights legislation through ensuring workers get paid a living wage.
What can I do to support garment workers?
We must continue to put pressure on fashion brands and retailers to do the right thing by their suppliers and support workers where we can. As individuals it can seem overwhelming and we wonder what role we can play, but brands do listen to customers. Below are some suggestions for action:
Write to the brands
Write to brands that you buy from asking them what they are doing to ensure that garment workers are being paid during this period. Are they honouring their payment for orders already placed? Can they vouch that the payments made are reaching the workers?
Donate to The Circle
A donation to The Circle’s Living Wage project will mean we can continue in our work to ensure that workers are paid a living wage. By donating to this project and you are helping to create a “race to the top” to protect the right of millions of workers to receive a living wage. Every contribution will make a difference.
As a result of ongoing campaigns, it has been officially reported that:
- Awaj estimates 71% of garment workers were paid in April.
- Garment Diaries estimates 86% of garment workers were paid.
- BGMEA reports 2,200 factories have paid workers
- Wage data details are here.
- According to a Brand Tracker, regularly updated by the Worker Rights Consortium, over a dozen large companies, including Uddin’s buyers, as well as Primark, Bestseller, Walmart (Asda), Under Armour, Kohl’s, Ross Dress for Less, Urban Outfitters, and Gap Inc. (Old Navy, Athleta, Banana Republic), among others, have canceled orders or renegotiated payment terms to demand discounts and payment delays.