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The Unequal Impacts of Covid-19 on Global Garment Supply Chains

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The Unequal Impacts of Covid-19 on Global Garment Supply Chains The Unequal Impacts of Covid-19 on Global Garment Supply Chains Evidence from Ethiopia, Honduras, India, and Myanmar Authored by Genevieve LeBaron Penelope Kyritsis Perla Polanco Leal Michael Marshall The Unequal Impacts of Covid-19 on Global Garment Supply Chains 2 About the authors Recommended citation Genevieve LeBaron is Professor of Politics at the Genevieve LeBaron, Penelope Kyritsis, Perla Polanco University of Sheffield’s Department of Politics and Leal, and Michael Marshall, The Unequal Impacts of International Relations. Covid-19 on Global Garment Supply Chains: Evidence from Ethiopia, Honduras, India, and Myanmar Penelope Kyritsis is Director of Strategic Research (Sheffield: University of Sheffield, 2021). at Worker Rights Consortium. Perla Polanco Leal is a Postdoctoral Research Associate at the University of Sheffield’s Department of Politics and International Relations. About the organisations Michael Marshall is a PhD Candidate at the University of Sheffield’s Department of Urban Studies and Planning. The University of Sheffield’s Department of Politics and International Relations is a top-ranked department for the study of politics worldwide. www.sheffield.ac.uk/politics Acknowledgements Sheffield Political Economy Research Institute (SPERI) at the University of Sheffield develops and promotes new understanding of contemporary We are grateful to the UK Arts & Humanities Research capitalism and the major economic and political Council and the Modern Slavery & Human Rights Policy challenges arising from it. & Evidence Centre for research funding (grant number www.speri.dept.shef.ac.uk AH/V008560/1). We are also grateful to colleagues at Worker Rights Consortium (WRC) is an independent University of Sheffield and Worker Rights Consortium labour rights monitoring organisation based in (WRC) for their support, especially WRC staff in Washington DC. The WRC conducts worker-centred Honduras, Ethiopia, Honduras, India, and Myanmar investigations to assess labour conditions in apparel who served as research assistants for this project. and textile factories around the globe. For security reasons, the WRC does not publicly list the www.workersrights.org names of representatives based outside of the United States. We would also like to thank the Centre for Social The Modern Slavery and Human Rights Policy and Education and Development in India for their support Evidence Centre (Modern Slavery PEC) was created in data collection. We thank Remi Edwards and Charline by the investment of public funding to enhance Sempéré for their assistance with proofreading. Finally, understanding of modern slavery and transform the we thank everyone who participated in our research for effectiveness of law and policies designed to prevent it. their time and insights. With the high quality research it commissions at its heart, the Centre brings together academics, policymakers, businesses, civil society, survivors, and the public on a scale not seen before in the UK to Copyright collaborate on solving this global challenge. The Centre is a consortium of six academic organisations led by the Bingham Centre for the Rule of Law and is funded by the Art and Humanities Research Council on behalf This report is published in 2021 under a Creative of UK Research and Innovation. Read more about the Commons CC BY-NC-ND license. Modern Slavery PEC at www.modernslaverypec.org. The views expressed in this report are those of the authors and not necessarily of the Modern Slavery PEC. The Unequal Impacts of Covid-19 on Global Garment Supply Chains 3 Contents Executive summary 5 Introduction 8 Background 10 Methodology 13 Findings 20 – 35 Workers 20 Business and governance 31 Conclusion 36 Recommendations 37 Appendix: Anonymised lists 39 of interviewees Technical appendix 44 The Unequal Impacts of Covid-19 on Global Garment Supply Chains 4 List of figures Tables Average monthly income change 20 among current workers Figures Change in monthly income (US$ PPP) by country 21 Gender by country 15 and workers’ union status Age by country 15 Average amount of owed wages 23 Identification with an ethnic minority group or 16 Receipt of severance pay among workers 23 caste by country whose contract was terminated Years as garment worker by country 16 Appendix Tables Brands reported by survey respondents 17 Modelling of income change – workers staying 21 Worker survey 39 in the same factory Worker interviews 39 Modelling of contract termination – all workers 22 List of industry and expert interviewees 42 Indicators of forced labour during the pandemic – 24 current workers Technical Appendix Tables Distribution of forced labour scale 1 24 during the pandemic Summary statistics and description of key measures 44 Modelling of forced labour scale 1 – current workers 26 Forced labour scales – construction 47 Modelling of forced labour scale 2 – 26 Regression tables – forced labour scales 48 workers staying in the same factory Regression tables – income change 50 Comparison of forced labour indicators 28 Regression table – contract termination 51 with pre-pandemic Indicators of forced labour for workers who 28 did not have any issues pre-pandemic Number of workers with no savings 30 compared to pre-pandemic Average debt levels compared to pre-pandemic 30 The Unequal Impacts of Covid-19 on Global Garment Supply Chains 5 This report focuses primarily on worker-level data, Executive Summary given that workers’ perspectives and voices have been excluded in many accounts of the pandemic’s impact on supply chains to date. About Summary of findings This report documents deteriorating living and working conditions for workers in garment supply chains, including a surge in vulnerability to forced labour, amidst We find that garment workers’ labour and living the Covid-19 pandemic. conditions have severely worsened during the pandemic and workers are experiencing severe economic hardship We undertook this study to investigate the pandemic’s and labour abuse. Across all four of our case study impact on workers and businesses in the global garment countries, workers have experienced sharp declines in supply chain, focusing on workers in four garment earnings and working conditions, including increased producing and exporting countries—Ethiopia, Honduras, vulnerability to key indicators of forced labour. These India, and Myanmar—that are important to the supply dynamics are evident for workers who have remained in base of garment brands and consumers in the United the same jobs with no change in their employment status, Kingdom (UK), United States (US), European Union (EU), as well for those who have had their contracts terminated Canada, and beyond. amidst the pandemic and found new jobs; which have Given the challenges of research during the pandemic, often involved worse working conditions and lower pay evidence of impacts on working conditions has been compared to their pre-pandemic employment. These sparse and anecdotal, offering little traction to explore patterns varied across case study country; individual- broader patterns. Research on Covid-19’s impact on level factors such as age, gender, race and ethnicity, supply chains has also primarily focused on firms, leaving union affiliation, migration and employment status; and out the voices of workers. commercial dynamics in supply chains. As such, we undertook extensive primary research including: a multi-country quantitative digital survey Job security (N=1140) of workers in Ethiopia, Honduras, India, and — Of the 1140 workers within our survey: 72% remained Myanmar; interviews with (N=60) workers in Ethiopia, employed at the same factory during the pandemic, Honduras, and India; interviews with apparel brands, 17% found another job, and 11% are currently not government, social compliance industry professionals, working. and international organisation representatives (N=20); the creation of a database compiling 2020/2021 annual — 13% of workers had their pre-pandemic contracts financial statements and sustainability reports for 21 terminated. This was the most common reason garment companies as well as documents and financial for a job change and/or loss during the pandemic, reporting about government pandemic business and of these workers, nearly 80% were not paid full assistance schemes for Canada, Ethiopia, Honduras, severance pay with over two-thirds paid nothing at all. India, Myanmar, the UK, and the US. Focusing on workers — The individual demographic factors that rendered who have remained employed during the pandemic as workers most likely to have their contracts terminated well as those who have had their employment terminated, was being part of an ethnic minority or lower caste, we investigate how indicators of living and working and the protective factor that rendered workers in our conditions including job security, income, vulnerability sample least likely to have employment terminated to forced labour, and debt have changed during the was being part of a union. pandemic. The Unequal Impacts of Covid-19 on Global Garment Supply Chains 6 Nearly 80% were not Worker debt — A key trend shaping working conditions and livelihood strategies is growing worker indebtedness to cover paid full severance food, housing, medical costs, and other basic needs. Amidst the pandemic, workers have not received pay with over two- sufficient pay to meet basic needs and have struggled to access financial support from government and civil thirds paid nothing society organisations. — Average levels of debt per household have risen
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