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19 Jul 2021

Clean Clothes Campaign

"Still Un(der)paid": USD 11.85 bn owed to garment workers in unpaid income and severance

...Drawing on research focused on seven countries, this report presents Clean Clothes Campaign’s latest projection of the economic toll of the Covid-19 pandemic on garment workers. Based on the estimated wage gaps in seven production countries, Clean Clothes Campaign estimates that garment workers lost 11.85 billion from March 2020 through March 2021.

... CCC’s Un(der)paid in the Pandemic report of August 2020 estimated that garment workers globally had lost between US$3.2 and US$5.8 billion between March and May 2020. Through the rest of 2020, the pandemic continued to spread globally, reaching new levels of severity in many garment producing countries and bringing business decisions and government measures that adversely affected workers in its wake. Brands’ responses to the pandemic, in the form of massive order cancellations and unilaterally imposed discounts, continued to cause a catastrophic squeeze on manufacturers....By autumn 2020, research showed that brands had taken advantage of their suppliers’ desperation for orders to push prices paid to factories down by 12% compared to the previous year and almost doubled payment terms to 77 days after shipment on average. Suppliers were forced to accept prices below the cost of production for some orders.

...Based on these wage gap estimates, the report projects a global estimated wage gap of $11.85 billion for the first 13 months of the pandemic.

... As both the ILO Call to Action and brands’ course of action have failed to protect workers from facing even more hardships than they normally already do, a coalition of over 230 unions and civil society organisations, united in the PayYourWorkers – RespectLabourRights Campaign, are calling on brands to negotiate an enforceable agreement on wages, severance, and basic labour rights....The binding agreement on wage assurance, severance guarantee fund, and basic labour rights should be part of a larger effort to establish a more sustainable and resilient industry in the near future, consisting of supply-chains with better planning and pricing models, which include costing models that cover fair payment schedules, and financial space for living wages, safe factories, and social benefits.

... Desk research was conducted between April and June 2021 to collate data from studies and surveys of the impact of the pandemic on the garment sector in seven major garment-producing countries: Bangladesh, Cambodia, India, Indonesia, Myanmar, Pakistan, and Sri Lanka.