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Garment workers going hungry as fallout from cancelled orders takes toll – report | Garment workers

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The catastrophic fallout of the fashion industry’s decision to cancel billions of pounds of clothing orders at the start of the pandemic has left garment workers across the world facing chronic food shortages as wages plunge and factories close.

Interviews with nearly 400 garment workers in Myanmar, India, Indonesia, Lesotho, Haiti, Ethiopia, El Salvador, Cambodia and Bangladesh conducted by human rights group Worker Rights Consortium (WRC), found that almost 80% of workers, many making clothes for some of the world’s largest fashion brands, are going hungry. Almost a quarter of those surveyed said that they were facing daily food shortages.

The majority (60%) of those interviewed were still employed in clothing factories supplying overseas brands. The report found that across all nine countries, workers had experienced an average 21% drop in wages since the beginning of the year, leading to many being unable to cover basic living costs.

Others had lost their jobs when their factories closed or sacked or suspended workers after brands cancelled orders or pulled their business at the beginning of the pandemic.

“Brands bear substantial responsibility for the destitution garment workers are facing,” said Penelope Kyritsis, director of strategic research at WRC.

Cambodian garment workers head home after their shift. Interviews with nearly 400 workers in 9 countries reveal an average wage drop of 21% since the start of the pandemic.
Cambodian garment workers head home after their shift. Interviews with nearly 400 workers in 9 countries reveal an average wage drop of 21% since the start of the pandemic. Photograph: Heng Sinith/AP

“The fashion industry has made its overseas workers exquisitely vulnerable to this crisis by paying them chronically low wages, leaving workers unprotected and unable to absorb the pandemic’s economic shocks. And the industry’s response to the crisis has often made matters worse. Unless something is done to help them we are likely to see tremendous suffering across global supply chains.”

One Cambodian garment worker who spoke to the Guardian lost her job in April when her factory closed after brands pulled their business and cancelled orders. She said she has not been paid her salary and is owed more than £1,500. She has been forced to take out loans and is now eating only one meal a day to make sure her 3-year-old daughter gets enough food.

“Before I lost my job I could just about make the money stretch, but when the factory closed I was left with nothing.” she said. “Now my husband and I are just eating rice so my daughter doesn’t go too hungry. I don’t know how to make the factory give me the money they owe me.”

In order to continue feeding their children, 75% of workers said they had taken out loans or gone into debt since the beginning of the pandemic.

Another garment worker from Indonesia said that her factory went bankrupt in September due to order cancellations from its foreign buyers. She is now surviving on the charity of her neighbours and is unable to make her loan repayments.

“There is no other work here but the garment factories,” she said. “I am now 40 and every time I try to get a job they say I’m too old. I don’t know how to pay the money I owe.”

Prof Genevieve LeBaron, a professor of politics at Sheffield University and a co-author of the report, said the debt workers were running up was one of the most alarming aspects of the research.

She said that “75% of the 400 workers we talked to said they were borrowing money to buy food, and almost half of these workers are still working at the same factory that employed them before the pandemic, which means that even those who have managed to keep their jobs are taking on debt to cope with falling income.

“What is most significant is that garment workers from nine countries with very different worker and industry demographics are all experiencing the same difficulties … This is a system where the workers at the bottom are taking all the risk and paying the price when things go wrong.”

Fashion brands cancelled an estimated $15bn of orders when the global lockdown closed retail outlets earlier this year.

Boxes of finished products from cancelled orders line the storeroom and walkway at a factory in Bangladesh.
Boxes of finished products from cancelled orders line the storeroom and walkway at a factory in Bangladesh. Photograph: Noor Alam/The Guardian

Clothing companies used force majeure clauses in their contracts with overseas suppliers to cancel existing orders. Many of these orders had already been completed but brands refused to accept shipment, leaving suppliers stranded with millions of pounds of unsold stock.

Factories were also forced to shut because of Covid, and the refusal of foreign buyers to continue to pay workers’ wages while business was suspended has, the report said, led to mass redundancies and hours and pay being slashed.

Worker Rights Consortium said that although some retailers have subsequently agreed to pay for cancelled orders in full, others are still refusing. A recent analysis of government import data for US and European markets identified a $16bn hole in clothing imports for 2020, largely due to cancelled orders.

“What is most concerning is that brands are now seemingly exploiting their suppliers’ desperation for orders by demanding lower prices and slower payment schedules, increasing the downward pressure on wages and making more job losses inevitable,” said Kyritsis.

The report says that the fashion industry should provide cash support to overseas workers throughout the Covid-19 crisis and ensure that workers are getting legally mandated severance and termination pay.

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