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How Can a Garment Be Cheaper Than a Sandwich?

Garment workers in Dhaka, Bangladesh, blocked a highway in April at a protest demanding their wages, which went unpaid during a nationwide coronavirus lockdown that forced most factories to suspend operations. Credit Mohammad Ponir Hossain/Reuters
Garment workers in Dhaka, Bangladesh, blocked a highway in April at a protest demanding their wages, which went unpaid during a nationwide coronavirus lockdown that forced most factories to suspend operations. Credit Mohammad Ponir Hossain/Reuters

Turning Point: The coronavirus pandemic plunged the $2.5 trillion worldwide fashion industry into a crisis, prompting store closures, layoffs and bankruptcy filings in the West and threatening the livelihoods of millions of garment workers around the world.

This year the world has had to confront two monumental challenges: Covid-19 and the economic catastrophe the disease has caused. Both have taken a heavy toll on economically vulnerable workers, who already had to contend with low wages and few social protections. Their plight has exposed the rampant inequality pervading many corners of the globalized world, including the fashion industry.

The economic pressures created by the pandemic have demonstrated just how dependent fashion is on the exploitation of cheap labor and how devastating this interdependence can be in times of calamity. With the World Bank warning that as many as 150 million people could fall back into extreme poverty by the end of 2021 because of the pandemic, the issue cannot be ignored.

When Covid-19 began to spread and lockdowns brought the world to a standstill, millions of underpaid garment workers in developing countries bore much of the pain. As fashion supply chains were disrupted, payments frozen and orders canceled, factory owners in Vietnam, Cambodia, India and Bangladesh suffered a body blow. Many in the work force were sent home without pay, left to fend for themselves amid a global health crisis.

As Covid-19 continued to rage, human rights activists also brought attention to the role of the fashion industry in abetting the repression of the Uighur population in China’s Xinjiang region.

The country’s largest Muslim ethnic minority, Uighurs have become the target of a campaign of repression by the ruling Communist Party; as many as one million people have been detained, forced to abandon their traditional way of life and used in coercive labor programs. According to a report by the Australian Strategic Policy Institute, at least 80,000 people were transferred out of Xinjiang to factories throughout China from 2017 to 2019, where they were put to work, unable to leave and under surveillance.

The transfers appear to have continued in 2020, even as the country confronted the pandemic, according to China’s state-run news media. In July, a coalition of international organizations called End Uyghur Forced Labor published the names of fashion brands that it believed had not taken adequate steps to ensure their supply chains were not linked to forced labor from Xinjiang. (About 85 percent of China’s cotton — amounting to almost 20 percent of global output — comes from Xinjiang.)

Garment workers in Asia are not the only ones struggling. An investigation by The Sunday Times of London in July found that workers at a factory in Leicester making clothes for the ultrafast-fashion retailer Boohoo were being paid as little as £3.50, or $4.64, an hour. (In Britain, the minimum wage for people over age 25 is £8.72 an hour.)

According to Labour Behind the Label, a nonprofit campaigning for workers’ rights, several garment factories in Leicester remained open during the pandemic with little regard for social distancing measures; some employees said they were told to go to work even if they had tested positive for Covid-19.

Over all, the outlook for low-paid workers is grim, especially as the world battles a deadly disease. A study by researchers at Imperial College London indicates that in low-income and lower-middle-income countries poor people are much more likely than wealthy ones to die from Covid-19. In the United States, the pandemic’s economic repercussions have been worst for low-income adults.

In 2016, at Voices, a gathering of fashion-industry innovators organized by The Business of Fashion, the Dutch trend forecaster Li Edelkoort asked: “How is it possible that a garment is cheaper than a sandwich? How can a product that needs to be sown, grown, harvested, combed, spun, knitted, cut and stitched, finished, printed, labeled, packaged and transported cost a couple of euros?”

It’s a question that has stuck with me since.

The cotton, textiles and garment industries were bound up with labor exploitation well before Covid-19 exposed the rot. The fashion industry has long been complicit in a system that pays people below-subsistence wages to maximize profits. This business model, focused on selling mountains of clothes at inherently unsustainable prices, has given less and less in return to those who create them.

Take Bangladesh, which is home to four million garment workers. Many of them earn little more than the government-mandated minimum wage: only 8,000 taka, or less than $100, per month. Fair-wage campaigners say that double the amount would be needed for workers to live comfortably.

Even the loftiest fashion brands participate in the exploitation of the most vulnerable workers in their supply chains. Luxury labels like Dior and Saint Laurent often turn to subcontractors in India for the production of intricate embroideries and embellishments at lower costs. The highly skilled artisans hired to do the job receive little credit or money for their work. In fact, some hiring companies will often carry out the garments’ final assembly in Europe and misleadingly label them as “Made in Italy” or “Made in France.”

It’s said that the real character of people is shown in how they react during a crisis. The same could be said of the $2.5 trillion global fashion industry and the challenges it faces. The pandemic has led to a significant decline in its revenues, a wave of bankruptcy filings among retailers and uncertainty among consumers. A joint report by The Business of Fashion and McKinsey & Company I was a co-author of estimates the industry will contract by up to 30 percent by the end of the year.

Will the fashion business be able to draw on the urgency of the moment and change for the better?

The industry must take greater responsibility for overhauling a business model that is fundamentally rooted in unfairness. The solution is not to cancel contracts, move manufacturing to local factories and replace humans with robots, but rather to dedicate meaningful resources to the improvement of working conditions for the sector’s most essential workers: the people who make our clothes. Fashion companies should keep them in mind as they plot the long path to recovery.

Imran Amed is the founder and chief executive of The Business of Fashion.

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