Fashion victims: textile workers risk losing jobs during the fashion industry crisis

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Millions of textile workers could lose their jobs as global brands demand price cuts and delay payments to suppliers desperate for orders in order to survive the new coronavirus pandemic, researchers said Friday.

According to a study by the Center for Global Workers’ Rights (CGWR) at Penn State University in the United States, suppliers were asked to cut their prices an average of 12 percent compared to the previous year and described such practices as “taking advantage of desperation.”

In a survey of 75 factories in 15 countries, suppliers said they had to wait an average of 77 days to pay, compared to 43 days prior to the pandemic, raising fears of further factory closures in an industry with 60 million employees worldwide.

“We’re seeing a dramatic drop in prices, reduced orders and late payments,” said Mark Anner, author of the report and director of the CGWR.

“That worries me for the wellbeing of the suppliers and workers. This initially affects the small and medium-sized providers. “

Fashion companies canceled billions of dollars worth of orders earlier this year when the coronavirus closed stores worldwide, causing wage losses of up to $ 5.8 billion, according to printing group Clean Clothes Campaign.

Suppliers in countries like Cambodia, Ethiopia, Guatemala, India, Mexico, Peru and Vietnam told CGWR that they have already laid off 10 percent of their workers and will have to cut another 35 percent if the downsizing continues.

Apparel manufacturers in Vietnam, a major apparel manufacturer, are among those companies that are being pressured by major fashion brands [File: Kham/Reuters]

“If that number applies to the entire industry worldwide, millions of textile workers could be unemployed,” said CGWR.

Second crisis

Manufacturers and labor rights groups said some orders canceled or suspended earlier this year will be restored along with new orders, but they were fewer than the number of companies crowding for orders.

“Buyers are taking advantage of this,” said Anner, describing it as an “emerging second crisis” for suppliers after billions were lost at the beginning of the year through canceled and unpaid orders.

“It’s a bit hard, immediately the severity of the [second] Crisis because the volume of new orders is mixed with the payment of old orders that have been backed up. It hides the new crisis, the decline in the order value. “

More than half of the manufacturers surveyed said they would have to close if the “sourcing squeeze” continues.

The Thomson Reuters Foundation spoke to five apparel manufacturers in Bangladesh, who host more than half of the 75 suppliers involved in the study, who said they had been forced to cut their prices by 5 to 15 percent.

Iqbal Hamid Quraishi, factory owner and director of the Bangladesh Garment Manufacturers and Exporters Association, said the order volume had increased since September but prices had fallen.

“There isn’t a lot of leeway to negotiate with brands. They tell us they can go to other suppliers if we don’t agree with their price, ”Quraishi said, adding that the industry could rebound if the second wave of COVID-19 doesn’t hit sales.

The Geneva-based International Employers Organization (IOE), a global corporate network, said brands and suppliers were trying to find solutions in “extremely difficult circumstances”.

“Brands … have shown responsibility by participating in the apparel industry‘s collective call to action aimed at helping manufacturers survive economic disruptions … and protecting textile workers,” said IOE spokeswoman Jean Milligan.

The call to action, written in April by the IOE and global unions, aims to protect workers’ incomes and support manufacturers through lobbying for loans, social protection systems and unemployment programs during the COVID-19 crisis.

The UK-based Ethical Trading Initiative, which includes fashion retailers H&M and Primark, said the pandemic was not an excuse to take back human rights and it was in everyone’s best interests to ensure a sustainable and resilient supply chain.

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