More than a million garment workers are out of work because of coronavirus

Tn Chu

More than a million garment workers are out of work because of coronavirus

But more than a million have already been fired or furloughed as global fashion companies have canceled or suspended orders in Bangladesh due to the coronavirus crisis, according to a report (pdf) by Penn State University’s Center for Global Workers’ Rights and the Worker Rights Consortium (WRC), an independent labor-rights monitor. The numbers only look set to rise, and don’t count workers in Cambodia, India, Myanmar, Vietnam, and other countries facing similar situations.

A number of suppliers in Bangladesh and elsewhere have said the companies they sew clothes and other products for effectively abandoned them and refuse to even cover the costs of work already done. Many factories expect to close unless something changes. “The immediate impact on workers and their families will be devastating,” said Mark Anner, director of the Center for Global Workers’ Rights, in an email. “Going forward, as no new orders are placed and the industry shuts down, workers will have trouble putting food on the table.”

A plea for Bangladesh’s garment industry

The dire situation has come about as Covid-19 has forced companies to shutter stores as part of social-distancing measures while demand for new clothes has simultaneously plunged as shoppers stay home and stop buying anything that isn’t essential. Retailers are doing all they can to avoid adding to their mountain of unsold inventory.

Fashion companies have already canceled or put on hold at least $3 billion in orders from Bangladesh’s garment factories, according to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA). That’s roughly equivalent to a full month of exports, based on previous BGMEA data. Another major industry body has reported similar figures. Without the orders, many factories are unable to pay workers.

The report by Penn State and the WRC found 58% of Bangladeshi clothing suppliers said they had to stop most or all of their operations because of order cancellations or lack of payment. It was based on responses from 316 suppliers—each of which may own multiple factories—who completed an online survey between March 21 and March 25. They reported that when buyers did cancel orders about 72% refused to cover the costs of raw materials the supplier had purchased, and 91% declined to pay the production costs.

Rubana Huq, president of the BGMEA, has been appealing to international companies to support the industry. “Brands who were partners last month have all turned into strangers, unable to fathom our exposure to an existential crisis of handling the wages of 4.1 million workers,” she wrote in a LinkedIn post. “For us it comes down to a level of bare minimum survival mode, while the western world still has the privilege of having bailouts from their privileged governments. On that consideration, we call upon the international community to surface with a renewed pledge to support the workers of Bangladesh, if not just the businesses.”

Using data from the BGMEA, the report estimated which companies had canceled or put on hold the greatest value of orders, including in-process and planned orders, as of March 29. The total among those companies alone amounted to more than $1 billion.