A Shadow Pandemic
Another pandemic is emerging in the shadow of COVID-19 — the exacerbated blight of poverty fueled by the virus’s profound shakeup of the global economy. Countless employees — domestic and foreign — have (or soon will lose) their livelihoods. Bangladeshi garment manufacturer Mostafiz Uddin, penning an op-ed detailing COVID-19’s impact on the garment industry said “Poverty is a killer too, and many more people die from poverty than from COVID-19.” Our clothing and styles are undergoing profound changes — from our closets to every step which brought them there — and Bangladesh’s reliance on garment and clothing exports puts it right in the eye of the storm.
As COVID-19 first began its spread across the globe in late March, retailers began to shut their doors — pushing their customers to instead shop online. Yet the harsh economic reality that lagged behind the spread of the virus burdened many financially: by laying off workers or inundating them with new childcare responsibilities. This culminated in desires to buy new clothing feeling increasingly like a distant dream. But perhaps there were no more vulnerable then the lowest paid people in the supply chain providing our clothing. 4.1 million Bangladeshi garment workers and $2.8 billion in clothing orders were rapidly thrown into flux after the emergence of the virus. For many fashion brands, the industry standard typically results in suppliers not being paid for weeks or months after the clothing is delivered — rather than upon the order. Many western fashion brands, crippled by worldwide store closures and plummeting sales, refused to accept the clothing they had already ordered. Penn State’s Center for Global Workers’ Rights conducted research showing three-in-four buyers refused to pay for the raw materials that went into their products while nine-in-ten refused to cover the cost of production. The sudden surge of buyers who refused to honor existing contracts sent the Bangladeshi garment industry into a death spiral — with as many as 60% of Bangladeshi factories shuttering their doors in the first weeks of the pandemic.
Of the countless factories that went out of business, 80% we’re unable to provide any income or severance to dismissed workers. A report co-authored by The Business of Fashion and McKinsey & Company painted a stark picture of the industry in East Asia:
“For workers in low-cost sourcing and fashion-manufacturing hubs, such as Bangladesh, Cambodia, Ethiopia, Honduras, and India, extended periods of unemployment will mean hunger and disease”
The Center for Global Workers’ Rights report emphasized the irresponsibility of western companies sending home their suppliers, in the midst of a pandemic, without any means of covering medical expenses — let alone other basic needs. Videos of garment factory employees and owners pleading with fashion brands to honor contracts went viral — with H&M, Adidas, Target, and PVH Corp (owner of Tommy Hilfiger and Calvin Klein), falling under the most scrutiny. Rubana Huq, President of Bangladesh Garment Manufacturers and Exporters Association questioned brands abandonment of workers who produced the products upon which those brands amassed great wealth.
But the catastrophic impact of canceled orders was not limited to East Asia — garment workers in the United States also felt the same shock to their incomes. The Garment Worker Center described how many garment makers in the United States are not eligible for any government benefits — in part because of the “underground’ nature of the industry. Workers of these circumstances in the United States were not eligible for unemployment benefits, paid family leave, or even disability insurance. If that weren’t bad enough, a further surprising symptom of the COVID-19 crisis has been unionization and collective bargaining efforts ending with in person work. This profound shock to the industry will touch many in it, from social media marketers in upscale urban offices to factory workers across the globe. And while this may be the most painful side-effect of the demand shock to the fashion industry, it is hardly the only change brought on by COVID-19.
Luxury Brands Adapt To The Crisis
Luxury brands, whose sales are hurt most by the shock to demand, have made their own attempts to be responsive to the surge in urgent needs within communities around the globe. Those initiatives include:
- Tiffany & Co. donating $1 million to COVID-19 Solidarity Funds, while also matching employee donations to organizations providing COVID-19 relief.
- Lacoste employees volunteering to produce gowns and nearly 150,000 washable face masks for local hospitals.
- Dolce & Gabbana supporting research at Humanitas University, an Italian University, hoping to find treatments for COVID-19.
- Moncler donating nearly $12 million to support the construction of a hospital in Italy with 400 ICU beds.
- Prada’s CEOs and chairman contributing intensive care resources and ventilators to hospitals in Milan — an early hot spot for the virus.
- LVMH donating over $2 million to The Red Cross and adapting their manufacturing process to produce sanitizers and 40 million medical masks.
Change In Preferences
With countless people under lockdown around the world, comfort and casual wear sales have surged. Those working from home are prioritizing comfort and keeping other clothes in their closets. Surprisingly, this shift in preferences has had perhaps no more profound impact than on jeans. Countless jean companies, including True Religion, Lucky Brand and the parent company of Joe’s Jeans and Hudson Jeans have all declared bankruptcy. Levi’s has posted a 62 percent drop in second-quarter revenue and has already cut 15 percent of its workforce.
Further in western cultures, the face mask — once seen solely as a medical device — has emerged as something more. As public health recommendations changed, function came to meet form. Today countless individuals, from large corporations to independent artists, are producing their own face masks as a fashion accessory — including nearly 1.3 million results for facemasks produced by independent artists on Etsy.
Other Impacts
The effects the fashion industry has felt is not limited to changing preferences and renewed corporate social responsibility measures. Other impacts on the industry include:
- Online influencers, previously a tool of advertisers, have used their platforms to raise money for charitable organizations and raise awareness about the virus.
- Events, such as fashion shows and clothing line launches, have been canceled and become virtual.
- Brick and mortar stores around the globe have closed, adding more stress to the logistics of online stores. Reopen dates for stores vary and delays in deliveries have become commonplace.
- Financially, the fashion industry is expected to see losses as high as $50 billion as the virus continues to spread uncontained.
Editor’s note: If the revelations of this story were shocking to you, there are several ways you can get involved to protect workers hurt most by COVID-19.
#1 Contact brands by letter or social media demanding they honor orders already placed with their suppliers.
#2 Donate to non-profit organizations providing support to impacted workers including: AWAJ Foundation, The Garment Worker Center, and GoodWeave International
