A new report says millions of dollars in wages have been withheld from garment workers around the world by factories contracted by major fashion brands.
By Elizabeth Paton
Over a crackling phone line, Ashraf Ali, a 35-year-old father in Bangladesh, described feeling suicidal and desperate to feed his family. Sokunthea Yi, in Cambodia, said she spends sleepless nights worrying about how she will pay off loans she took out to build her house. And at only 23, Dina Arviah in Indonesia said she was hopeless about her future as there were no longer any jobs in her district.
All once held jobs as garment workers in factories producing clothes and shoes for companies like Nike, Walmart and Benetton. But in the last 12 months those jobs have disappeared, as major brands in the United States and Europe canceled or refused to pay for orders in the wake of the pandemic and suppliers resorted to mass layoffs or closures.
Most garment workers earn chronically low wages, and few have any savings. Which means the only thing standing between them and dire poverty are legally mandated severance benefits that most garment workers are owed upon termination, wherever they are in the world.
According to a new report from the Worker Rights Consortium, however, garment workers like Mr. Ali, Ms. Yi and Ms. Dina Arviah are being denied some or all of these wages.
The study identified 31 export garment factories in nine countries where, the authors concluded, a total of 37,637 fired workers were not paid the full severance pay they legally earned, a collective $39.8 million.
According to Scott Nova, the group’s executive director, the report covers only about 10 percent of global garment factory closures with mass layoffs in the last year. The group is investigating another 210 factories in 18 countries, leading the authors to estimate that the final data set will detail 213 factories with severance pay violations affecting more than 160,000 workers owed $171.5 million.
“Severance wage theft has been a longstanding problem in the garment industry, but the scope has dramatically increased in the last year,” Mr. Nova said. He added that the figures were likely to rise as economic aftershocks related to the pandemic continued to unfold across the retail industry. He believes the lost earnings could total between $500 million and $850 million.
The report’s authors say the only realistic solution to the crisis would be the creation of a so-called severance guarantee fund. The initiative, devised in conjunction with 220 unions and other labor rights organizations, would be financed by mandatory payments from signatory brands that could then be leveraged in cases of large-scale nonpayment of severance by a factory or supplier.
Several household names implicated in the report made money during the pandemic. Amazon, for example, reported an increase in net profit of 84 percent in 2020, while Inditex made 11.4 billion euros, about $13.4 billion, in gross profit. Nike, Next and Walmart all also had healthy earnings.
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