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Profit-Hungry Brands Give Garment Workers Short Shrift

It’s been a turbulent year for retail. But as the sector seeks to right itself after massive disruptions to both supply and demand this spring, garment workers have borne the brunt of the suffering due to cancelled orders, lost wages and layoffs.

The fashion industry has prized its own recovery over ensuring that workers’ livelihoods are protected, claims London-based nonprofit Business & Human Rights Resource Centre. And through all the talk of “unprecedented challenges” served up throughout 2020, many clothing brands have emerged from the fray relatively unscathed.

In a survey of 34 global fashion brands that agreed to respond to questions about their actions regarding garment workers’ rights during the pandemic, 29 have recorded profits since the onset of the viral outbreak. Of that contingent, nine still have not committed to pay for all orders, and 10 did not respond to the survey.

Only one brand—PVH-owned Calvin Klein—has implemented a policy during the course of the outbreak that ensures vulnerable workers are not disproportionately targeted for layoffs. Another 25 brands claimed that they already had policies in place to cover this issue, and had recently reiterated those policies to their suppliers.

According to the Centre, British brands Topshop, Boohoo and Debenhams did not respond to the survey. But Gap Inc. responded to requests for comment for the first time after a July decision to pay back its suppliers in full for the work done earlier this year.

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Meanwhile, just three fashion companies—Europe’s Aldi Nord and Aldi Sud, and Germany-based Lidl—have committed to refraining from asking factories for price reductions or discounts on work. Nearly two-thirds (65 percent) of surveyed suppliers said they had experienced such demands from their brand partners.

“Brands have now had over eight months to consider the impact their actions are having on factories and garment workers in their supply chains,” Thulsi Narayanasamy, the Centre’s senior labor rights lead, told Sourcing Journal. Well before the pandemic, the industry built and sustained an unfair business model that “left garment workers in precarious and economically vulnerable conditions,” she said.

Demand contractions across the globe have resulted in mass wages lost across the apparel supply chain. Throughout the spring, panicked brands canceled orders altogether or refused to pay for their goods in full as consumer interest, or financial ability, faltered.

“What factories are able to afford is directly impacted by the purchasing practices of fashion brands,” Narayanasamy said, “and studies have shown that suppliers continue to be squeezed mercilessly on price or forced by brands to accept orders below cost.”

Clothing companies must make commitments not to engage in price gouging in light of the pandemic, she added. “Brands should always have had policies to ensure that labour costs are ring-fenced, and now is the time to implement them.”

As purchase orders went unpaid this spring and summer, desperate and overstretched suppliers engaged in discriminatory dismissals of their most vulnerable employees, Narayanasamy said, and often declined to pay their wages and severance in full.

Meanwhile, apparel brands failed to take responsibility for putting their partners in a precarious position to begin with. “Most brands responded to us by saying that their pre-existing policies were sufficient to cover the scale of the crisis, yet the same brands at the beginning of the pandemic agreed that the impact on their business and on workers was unprecedented,” she said. “It can’t be both.”

In addition to asking for guarantees to safeguard workers’ jobs and pay full price for future orders, Narayanasamy believes brands should now take responsibility for lost wages. Doing so would not be difficult, she said, with the Asia Floor Wage Alliance recommending brands pay a one-off supply-chain relief contribution of just 2 percent of total sourcing for the preceding 12 months for each factory.

“This is a small amount for brands but would be transformative for workers now living in poverty,” she said.

The most effective way to ensure that past wrongs are righted, though, is for the industry to collectively commit to paying workers a living wage, Narayanasamy added. “If garment workers were not forced to live in poverty because of chronically low wages, they would have had a better chance of withstanding this pandemic with the dignity they deserve.”