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Labor Advocates Want Fashion Brands to Share Profits

Labor advocates want the world’s biggest apparel brands to share their wealth.

While a number of companies committed to paying their upstream suppliers for pre-Covid orders in full at a time of en-masse cancellations and demands for deep discounts, nonprofit Remake is calling on the fashion industry to mobilize direct financial relief and severance to garment workers “ASAP.”

The organization’s #ShareYourProfits campaign is singling out in particular Adidas, Amazon, Asos, Gap, H&M, Levi Strauss, Lululemon, Primark, Under Armour, Uniqlo owner Fast Retailing, Nike and Zara owner Inditex to ensure that 1 percent of their net revenue goes toward garment worker relief. In addition, Remake asks that they shell out 10 cents more per unit of apparel into a severance guarantee fund. Together, it added, the 12 brands have earned more than $1 billion in profits during the pandemic based on the most recent earnings reports.

“Even in good years, fashion retailers are the most profitable of all retailers and have produced some of the world’s richest men,” the organization, which also spearheads the grassroots #PayUp movement to pressure deadbeat brands to reimburse their suppliers, said in a statement. “The pandemic has revealed how a core part of fashion’s profitability is achieved by consistently underpaying suppliers and garment workers.”

Indeed, a number of brands have remained profitable throughout the pandemic, and some are even amassing record profits due to to the uptick in demand for casual clothing and sportswear during lockdown. According to the State of Fashion 2021 report, co-published by McKinsey and Company and Business of Fashion, the market capitalization of the most profitable 20 fashion brands grew by 11 percent. Meanwhile, the Worker Rights Consortium (WRC) and the Center for Global Workers’ Rights (CGWR) at Penn State University found that buyers have asked suppliers to lower their prices for the same product by 12 percent compared with the year before.

Meanwhile, the situation for garment workers grows even more dire.

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In recent surveys by the WRC, garment workers in Bangladesh, Cambodia, El Salvador, Ethiopia, Haiti, India, Indonesia, Lesotho and Myanmar reported experiencing growing hunger and food insecurity. Those who hadn’t been laid off or furloughed saw their incomes drop 21 percent from $187 to $147 per month between March and August alone. Of those that lost their jobs, one in four have not received legally mandated severance pay, meaning they have no financial safety nets to fall back upon.

At present, less than $300 million in relief has been released for garment workers, Remake said, while the need is “estimated to be in the billions.”

“The majority of our these brands are part of the international initiatives the [International Labour Organization] Call to Action and USAID [memorandum of understanding], including Levi’s, H&M, Zara, Adidas, Gap Inc., Lululemon, Nike, and Under Armour, that made big promises to get money to garment makers, and yet these initiatives have largely devolved into inaction or have released woefully insufficient sums,” it said.

“Other companies like Asos, Amazon and Uniqlo are on the list for posting record earnings during the pandemic or having billionaire owners while contributing nothing to fashion’s essential workers—the women who make our clothes,” Remake added.

Adidas takes “comprehensive measures to ensure fair and safe working conditions in its supply chain,” a spokesperson told Sourcing Journal. “In doing so, we contribute to upholding human rights and the improvement of living conditions in the supplier countries. Employees in the Adidas supply chain are among the highest paid in the industry.”

Inditex declined to make a statement; other brands did not immediately respond to a request for comment.