Hunger in the Apparel Supply Chain

This research report presents new data about how garment workers’ food security—and linked dynamics of employment status and income—has deteriorated amidst the pandemic. Our data reveal an alarming pattern: garment workers’ declining incomes are leading to widespread hunger among workers and their families, as they are increasingly unable
to obtain adequate food and nutrition. These dynamics are a direct result of apparel brands’ responses to the Covid-19 pandemic, as well as the long-term trend of low wages for garment workers in brands’ supply chains, which has left workers unprotected.

A July – August survey of 75 garment suppliers in 15 countries reveals shocking changes in brands’ pricing and purchasing practices on new orders. The report finds that brands are using suppliers’ pandemic-driven desperation as leverage to drive down prices and impose onerous payment schedules on new orders they are placing. Many suppliers are being forced to accept orders below cost, potentially forcing them out of business and putting workers’ livelihoods at risk.

US and EU trade data provide considerable evidence of a significant loss in value due to order cancellations. A total of USD 16.2 billion was lost, combined, from April through June in the US and from April through May in the EU (a number that will almost certainly increase when June data are available for the EU). Assuming that wages make up 10 percent of the value (at import price), what this suggests is the loss of more than USD 1.6 billion in workers’ wages, based on reduced imports and retroactive price discounts for the US and EU markets alone.

This paper by the European Center for Constitutional and Human Rights, ILAW, and the Worker Rights Consortium explores the power imbalances between brands and suppliers and their contractual manifestation. It examines the law of force majeure and related doctrines and how they apply to the current circumstances. The paper explains how brands violate their due diligence obligations through canceling orders.…

The report “Un(der)paid in the pandemic” analyzes nonpayment of wages to garment workers during the months of March, April, and May resulting from order cancellations by apparel brands, unpaid leave, and state-sanctioned wage cuts during the Covid-19 crisis. Based on a review of news reports and information from worker organizations, we estimate that across South…

Co-authored by WRC executive director Scott Nova and the CCC’s Ineke Zeldenrust, this white paper explains how brands and retailers are shoring up their own finances by refusing to honor contracts with apparel suppliers, forcing suppliers to the brink of bankruptcy and causing large-scale dismissals of workers. The report calls for brands to pay suppliers what they owe them, for the swift mobilization of international financial resources to provide income support to garment workers, and for deeper reforms to address the supply chain inequities that Covid-19 is laying bare.