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What Does COVID-19 Mean For the People Making Your Clothes?



Fashion and luxury brands are suffering from effects of the COVID-19 outbreak, with sales slumping dramatically across the board – from fast fashion companies to luxury brands. Behind these public-facing entities is an entire network of suppliers and employees that are also feeling the impact of the global health pandemic, and the various restrictions and disruptions that have come about as a direct result. In many Western nations, retail and hospitality employees have been particularly hard hit. In other countries, those working within the manufacturing sector have been among the most heavily-impacted due to disturbances to the value and supply chains, as retailers and brands rush to cancel orders and mitigate damages on their end. 

Seeking to identify strategies for improving labor conditions in the value chain (i.e., the process by which businesses start with raw materials and add value to them through manufacturing and other processes to create a finished product) for the cotton sector, which sees cotton spun into yarn, woven or knitted into fabric, and turned into garments and other items that are sold to consumers, a group of Australian academics began investigating in 2019. Then COVID-19 hit. 

Specifically looking at the impact of the enduring global health crisis (and ensuing financial crisis) on the global garment manufacturing sector, professors Sarah Kaine and Alice Payne, and Justine Coneybeer, a supply chain research assistant, found the following … 

The changes brought by COVID-19 have had a significant impact on those working in global value chains and supply chains, the latter of which refers to the steps taken to get a product to a consumer – particularly in garment production, with the garment manufacturing sector being hit by falling demand, as retailers cancel orders or ask for delays in payment, but also as supplies, such as fabrics from China, are subject to disruption. 

Impacts can be seen in fluctuating prices of raw materials, with plummeting demand for finished garments prompting the prices of cotton for cotton, for example, to be pushed prices down from $0.70 cents at the start of the year to $0.50 cents, the lowest price in a decade, before a partial recovery to $0.58 cents. At the same time, on the employment front, reports of losses of tens of thousands of jobs in Myanmar and Cambodia paint a bleak picture. In Bangladesh estimates have 1.92 million workers at risk of losing their jobs as factories receive notice of $2.58 billion worth of export orders cancelled or on-hold. 

Making things worse, many garment factory workers, and fabric and yarn producers in these countries were receiving less than a living wage, a figure defined as the minimum needed to provide adequate shelter, food and necessities, before the onset of COVID-19. This has not only made it difficult – if not impossible – for them to plan or save for emergencies, which is particularly problematic given that many are migrant workers without funds to return home. As for the individual who have managed to hang on to their jobs, they are not exactly in the clear, as existing programs set up to improve their working conditions have been disrupted, meaning that conditions are at a high risk of deteriorating at this time. 

For instance, the Accord on Fire and Building Safety in Bangladesh is a legally-binding agreement between brands and unions set up in the wake of the collapse of the Rana Plaza factory in 2013 which killed 1,133 people and critically injuring thousands more. Inspections under the program have been suspended, as have audits, due to the closure of borders.

The problems are cumulative – delays in orders due to interruptions in supplies will need to be addressed when factories scale back up, creating demands from buyers that might result in pressure for workers to work unpaid and involuntary overtime, or even worse, subcontract to the informal market, where there is a high risk of human rights violations. 

Amid such far-reaching havoc are some glimmers of hope. Companies along the value chain have been asked to produce and supply medical equipment, such as surgical gowns and face masks. Dozens of brands and retailers have donated funds and activated their logistics networks to support the effort. 

As orders slowly start returning, cotton and textile associations have joined forces in calling for greater collaboration throughout the value chain. Governments have announced aid packages for their workers, and the European Union has provided an emergency fund to support the most vulnerable garment workers in Myanmar. 

Longer term, the supply risks highlighted by the disruption might cause companies along the value chain to diversify their suppliers and even produce locally. More than that, the crisis has demonstrated forcefully the importance for manufacturers and retailers to be agile, which can best be done when workers are not only located nearby but have been well trained and have access to the best technology and equipment. 

For now, we will have to wait and see. Cotton is as good an indicator as any other of the brittleness of supply chains and the ways in which what we produce and consume affects the livelihoods of those further down the chain. 

In the short-term, a best-case scenario would see a revaluing of garment work as “essential” in order to produce protective/medical equipment that we need in a way that benefits the people who help make them, since those are precisely the people who are all but invisible to consumers, and who are at the highest risk.

Sarah Kaine is an associate professor at the UTS Centre for Business and Social Innovation at University of Technology Sydney. Alice Payne is an asssociate professor in fashion at the Queensland University of Technology. Justine Coneybeer is a supply chain research assistant at the Queensland University of Technology. 



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