Q. The advent of e-commerce and digitalization has had profound impacts on the supply chains and production processes of sectors such as the ‘garment’ industry. Could you talk about these transformations? What have been the most significant aspects of this transformation?
Paul: Indeed, there has already been a huge change, and we expect change to accelerate in the coming years. What we are seeing is that not only are we in the age of fast fashion, but that of ultra-fast fashion. It can literally take only a few days for the cycle to go from a design sketch to a finished product that ends up in consumers’ hands.
This transformation has been brought on and accelerated by the rise of new e-commerce giants — most notably, Shein from China — as well as the practices of Amazon. But it’s worth tracking that even, let’s say traditional fast fashion brands themselves, have been working on their supply chains and attempting to recalibrate them in this manner. They are automating and trying to mine more data from their consumers. These organizations are evolving and so, we see an acceleration of these trends, and also of the offerings that they make using these modalities. We’ve seen this among other e-commerce sellers too — such as Boohoo, ASOS, and PLC. So, there is a lot more marketing online, and there’s much more selling online. This was also boosted during the pandemic when, in much of the world, traditional shops were closed or restricted. There has been an immense shift towards moving operations online.
Q. Could you speak about new business models being promoted by large platforms, and the way you see them changing market dynamics going forward?
Paul: Apart from many companies attempting to build shorter supply chains, we’ve seen a lot of production actually moving back to big consumer markets such as Europe and the United States, and this is an interesting trend. However, looking at the model of a platform like Shein is where we can really see these dynamics play out. They launch thousands of products every week but don’t actually produce them, they just make the design. In fact, production only starts once these designs are online and they see that consumers have begun to place orders on them.
So, in effect, they are relying on a model where they almost don’t have stock anymore, but invest in super-quick fulfillment. This is a very worrying development. It uses a lot more air transport, which is very bad for the planet. They are also changing the nature of production too. Shein’s model relies less on larger garment factories, and, instead, on a large network of small-scale suppliers in China, all of which usually have between five to 20 employees. Many are also family-based and they compete in a marketplace that Shein sets to fulfill orders in. Basically, in a production cycle, the company says, “We want 5,000 of these, because consumers really like this. Who can deliver this by tomorrow?”, and then the small-scale manufacturers start working. As one can imagine, there is often a great deal of toil and overtime involved because everything hinges on rapid order fulfillment. Moreover, the shift from larger factories to networks of smaller producers creates internally competitive dynamics among workers, and also makes it a lot more difficult to unionize or organize them.
Companies like Shein are relying on a model where they almost don’t have stock anymore, but invest in super-quick fulfillment…Shein’s model relies less on larger garment factories, and, instead, on a large network of small-scale suppliers in China, all of which usually have between five to 20 employees. Many are also family-based and they compete in a marketplace that Shein sets to fulfill orders in.
Q. It seems the value chains of ‘fast fashion’ are not only creating grim new realities for workers in the Global South, but also constituting pockets of destitution in the developed world. Could you elaborate on the overall impact these trends are generating for labor?
Paul: The trend towards reshoring production is worth tracking and we have seen a lot of scandals emerge lately, for instance, in Leicester in the United Kingdom. People have discovered dingy, surreptitious garment factories where workers are not being paid or being paid far below the legal minimum wage. We have seen this quite a bit in the United Kingdom and also in the United States, in Los Angeles, California, where most U.S.-based production is taking place.
What we see in both instances is that this is really concentrated among migrant populations. So, in the United Kingdom, it’s mostly Pakistani and Indian migrant communities that work in these factories, whereas in Los Angeles, it is mostly Central American migrants that are doing this work.
While these are prominent cases, they are not the only ones. We have also seen an increase in Southeast Europe, because it is also close to the European market. So, places like Ukraine (before the war), Croatia, Moldova, and to a certain extent Turkey also, where the workforce is not so much migrants, but largely middle-aged women. It is still the case that this work is very targeted towards women, and they are being paid extremely low wages. Moreover, we see that most workers are 40-50 or 30-50 years old, with a concurrent shift (in some countries) towards more home-based work.
Q. And is there anything dramatic in the change of labor conditions in the Global South?
Paul: The pandemic has had a huge impact. As soon as Covid-19 broke out, brands started dropping orders, and payment arrangements towards suppliers deteriorated rapidly. A very conservative estimate is that wages worth USD 12 billion were simply stolen during this period from the Global South. This occurred because contracts were not upheld across the supply chain. Wages were not being paid, and if people were let go, they were not paid the severance fees that they had a legal right to.
A very conservative estimate is that wages worth USD 12 billion were simply stolen from the Global South during the pandemic. This occurred because contracts were not upheld across the supply chain. Wages were not being paid, and if people were let go, they were not paid the severance fees that they had a legal right to.
In fact, during this time, we have also seen what may be the biggest wage theft ever. It occurred in Karnataka province in India, where there was mandatory top-up of the minimum wage in 2020, but companies have simply refused to pay. This is a staggering sum of money, but companies have launched a lot of court cases and they continue to say, “Oh, now we’re not going to pay it because it’s still in court.” Of course, the law could eventually prevail — and there has been a recent breakthrough, when Shahi Exports, a very big Indian company, did concede and has now decided to pay those workers everything (including years of back pay). But a lot still needs to be done here.
We’ve seen the same tactic in Pakistan, in the Sindh province, where there was also a mandatory increase of the minimum wage, and suppliers simply refused to pay and launched court cases. That said, it’s important to see the systematic forces that create this behavior. You can blame the suppliers, but one has to also recognize the imbalance of power that was so clearly shown during the whole pandemic. The brands are ultimately responsible because they go for the lowest price possible and, therefore, force suppliers to resort to these tactics to remain competitive in our opinion, while we of course criticize the suppliers as well, they are not the powerful party here. It’s the brands that hold all the power and their purchasing practices force suppliers to cut corners, at every step along the way.
Q. How does the ‘digital’ dimension particularly affect labor here? Are there issues of algorithmic accountability? Are there new forms of surveillance in the work process? How are workers responding to these circumstances?
Paul: At the moment, we’ve seen the use of algorithms mostly restricted to analyzing consumer preferences. This includes things such as analyzing weather patterns so that people know when to have summer clothes, winter clothes, and rainy weather clothes in their listings. As far as in the factories themselves, there has been relatively little so far. We have seen an increase in surveillance in some areas, though that has mostly been in places where there is an authoritarian government, and where garment workers are part of the resistance. We’ve seen that in Myanmar, for instance, after the recent military coup, where garment workers were playing a leading role in the fight against the military. However, in the actual working process itself, we have not seen it much.
Similarly, automation also has not really been a major factor yet, because at the moment, it is still a lot cheaper to exploit humans. If you only pay them USD 1 or USD 2 per day, then it is more profitable than to actually automate the process. Moreover, it is remarkably difficult to automate garment production, because the material involved is so soft that it needs extremely delicate treatment. We have seen advances being made in automated or automated-assisted production in some areas, such as sneakers or training shoes, because they are basically high-tech products. But in producing something as simple as a t-shirt or a dress, it’s still quite hard for robots to actually work with the material. Technologically capable robots do exist, but they are very expensive and they cannot achieve the high volume the market requires. So, overall, as long as people are being paid poverty wages, that is simply cheaper. I hate to be as cynical as that but that’s the way it is at the moment.
Finally, we see a lot more algorithms in logistics, obviously, and in predicting consumer behavior. So, we see a lot more instances where new collections (of garments) are getting smaller, but there are more and more of these being put out, and we see a lot more targeted marketing. There’s a lot of marketing going on through mediums such as TikTok, and through newer channels to target younger consumers where you see trends nowadays pick up in a week, and it can last for two weeks, and then it’s gone again.
Q. As you mentioned, in many parts of the world, this is still an industry that predominantly employs female workers. So, can you comment on the gender-specific impact that these changes have had on women’s work and lives?
Paul: Yes, they have been very negative. First, to give a sense of the scale, even though the estimates vary a little bit, between 70–80% of workers in the industry are female. Since the pandemic, a lot of these workers had to also cope with schools being closed and with no functioning childcare (because in many countries it is still seen as the role of women to take care of the children), they have had it extremely difficult over the last two years.
As one would imagine, this has led to an increase in home-based workers because that was the only way that women could keep working while still also taking care of their children. That has, obviously, also led to many children being forced into child labor because they couldn’t go to school and they were in the same room as their mother, who was working. We’ve also seen a very big increase in sustained levels of gender-based violence in factories where anything from threats to sexual harassment, to all kinds of awful things, are used as ways to control the workforce. As conditions worsen with the pandemic and with the power of these large companies, things have become extremely dire for many female workers.
We’ve seen a very big increase in sustained levels of gender-based violence in factories where anything from threats to sexual harassment are used as ways to control the workforce. As conditions worsen with the pandemic and with the power of these large companies, things have become extremely dire for many female workers.
Q. What are the ways in which policymakers have tried to implement legislation to mitigate some of these problems? Are there any notable examples of this? What would be your assessment of these efforts?
Paul: Well, there have been multiple efforts to do something. In Europe, for instance, we have seen quite a number of mandatory human rights due diligence laws being introduced. There is now a law in place in Germany, there is one in the Netherlands and Norway, and in February, a proposed EU-wide legislation was announced. We are cautiously welcoming it. It’s a very long piece of legislation, we are still studying all the details, but it does contain extra provisions for high-risk sectors, such as textile and garments. Of course, there are already issues with it that are being pointed out. For example, it contains an exclusion provision for smaller and medium enterprises, which is a problem because, in the garment sector, you often only have a few people actually working within the EU at the headquarters level, but they can have a supply chain that involves thousands and thousands of workers. Currently, the European Commission proposes a limit on the number of employees to be exempt from this legislation, but they only count employees in the headquarters. This is potentially a serious loophole, and we’re saying that it is a flawed model when applied in the context of the textile industry. That said, this isn’t the law yet, and these things may change. It needs to be negotiated with the European Parliament, with the member states, and there is also quite a bit of positive news there.
There has also been a law passed in California (California SB 62) that directly targets and supports garment workers. This is quite a positive law and one that has been fought for by our U.S. allies for some time. One of its key upsides is that it has an element where workers can actually get access to remedy, so they can go to court in instances where they were not being paid. Similarly, it requires employers to actually give people full, honest, real contracts, and it forbids things like piece rate contracts, which are quite an evil mechanism to make people work inhumanly long hours. So, there is positive news there. There is also a movement for a law in New York State, which could be interesting, although it’s still a long way from being a law, but it seems to be moving in the right direction. It is particularly significant because most American brands have their headquarters there. So, most American companies would fall under that regime and that would make a difference.
On another level, on 24 February, when the proposal in Europe, for stopping forced labor was put out, it mainly targeted at cotton from the Xinjiang region in China, and also other forms of forced labor. And we have seen, also in the United States, that shipments of readymade garments for shops were actually stopped at the border because they were produced with forced labor. So, that is another avenue, where we are seeing movement.
There are also a number of ongoing court cases based on consumer protection laws. A lot of greenwashing goes on in the textile and garment industries where brands say things like, “We have a green collection, we are sustainable.” Now, in a number of countries — in France, Belgium, and the Netherlands — the fact that these claims are founded on absolutely nothing are starting to be taken very seriously in court. The brands cannot prove that they make sustainable products and so, consumers and civil society have been able to leverage powerful modalities in Europe to try and hold them to account.
So, yeah, there are movements on a number of levels. It will, unfortunately, take a few years before all these come into effect, and there will also probably be some big fights in the process, especially for agendas like getting access to remedy in place. This is one of the three pillars of the UN Guiding Principles, that workers should get access to remedy if they were mistreated. But the issue is that it still needs to be defined what that actually means. We think it should mean that workers should be able to go to court in the countries where the brands are headquartered, but that is a difficult legal process because you have to deal with multi-national legal issues. It’s also, often, quite expensive. So, it takes a lot of preparatory work to do that.
On the whole, however, important things seem to be happening. There is also a strengthening of reporting requirements on the Modern Slavery Act in the EU. There will be a charter directive, which will require companies to report on their entire value chain. And we also see increasing pressure from investors, who want these companies to stop producing glossy PDFs with happy children and lovely green fields, and actually, include real measurable data in their reports.
There is a strengthening of reporting requirements on the Modern Slavery Act in the EU. There will be a charter directive, which will require companies to report on their entire value chain. We also see increasing pressure from investors, who want these companies to stop producing glossy PDFs with happy children and lovely green fields, and actually, include real measurable data in their reports.
Q. Are there any signs that there may be legislative efforts underway in Global South countries, and is there a way that these legislations in the developed world can also have positive outcomes downstream, in the other parts of the supply chain?
Paul: To be honest, there aren’t many developments in the producing countries at the moment. What we are seeing is that there is more concentration of power on the supplier side, which can have positive and negative effects, because the suppliers have their own responsibility and their own role to play, but they are also quite often put under enormous pressure by the brands. Now, there has been more of an effort to organize the producers on a level that goes beyond a single country, to make sure that they can have a stronger voice in saying, “no, we want reasonable lead times, we want reasonable payment conditions”, and so forth. Till now, the brands had the power to stipulate these conditions, and they would not pay until 90 days after the goods were delivered. This meant that all the risk lay with the supplier for buying the raw material, for paying their workers, and they would never know if they would actually be paid until 90 days after the shipments had arrived in Europe or in the United States. Obviously, that is an unacceptable form of doing business in any normal setting; but alas, the garment sector is not a normal sector.
So, there is some effort to increase the power of the suppliers, which we’ll have to see how that works out. But certainly, it’s not a given that if suppliers get better conditions that will translate into better conditions for workers. But if the money isn’t there to be given to the workers in the first place — which is often the way things currently are — it’s hopeless. So, these changes can, in principle, be one part of the puzzle in getting higher wages to workers, and in seeing health and safety improvements in the factories.
Q. Are there legislative ideas or rules that you would recommend which you think could make a significant difference, going forward? What frames and outcomes should inform a new governance vision and action plan in the immediate future and in the next decade?
Paul: Well, there are many! We (at CCC) have published a whole report on what mandatory human rights due diligence and legislations should include. It’s very long and very tactical and can be found on our website. The main thing we advocate for is: Human rights due diligence should not rely on voluntary agreements. Over 30 years of voluntary agreements have shown us that they really do not work. We are also vehement that all workers should be included and that includes people in the informal sector, where we see the greatest amount of human rights violations going on. That is further along the supply chain — as soon as you get to ginners, textile mills, cotton production, but also, including home-based workers and migrant workers, of which there are millions and millions who are often without proper contracts, or no contract at all. So, any legislation should include all workers with special attention to the gendered aspects of labor.
As regards to what can be done right now: more transparency. We require open data on all production locations, imports, and exports. It will be a long step to ask for transparent data on wage levels, but it is being pushed. At the OECD virtual forum on the garment and textile industry that was held on 23 February, the call for more transparency on wage levels was very loud; because up until now, we have only heard commitments and promises by brands. None of them actually have a reporting mechanism in place to show whether and how they actually achieved progress towards a living wage. All brands have this goal in their code of conduct. But none of them have a timeline. None of them say — “yes, we’re going do it by 2025, or 2030, and in 2025 we want to achieve X percent of this” — none of them have a tangible plan. So, that’s not even worth the paper that it’s written on.
As regards to what can be done right now: more transparency. We require open data on all production locations, imports, and exports. It will be a long step to ask for transparent data on wage levels, but it is being pushed.
We want concrete timescales, and this is not very difficult to do. We have done calculations. We have started an initiative with hundreds of NGOs to make sure that millions of garment workers can actually get through this pandemic. It would require 10 cents on a t-shirt more. That is perfectly doable. For us to achieve living wages, it would be a bit more, but it would not mean that clothes would become ridiculously expensive. It would probably be a price increase, let’s say, between 2-5% on expensive items, and maybe up to 5-7% for really cheap bulk items. But that is within the realm of the possible. We are not asking for something completely crazy. The cost of production is actually 1-2% for expensive items and only up to 5% for cheap bulk items. The cost of garments and textiles is mostly used for marketing and also logistics. The workers only get 1-2% of that. Increasing that to 3% would allow these people to live a dignified life, and the brands could either say, “maybe we shouldn’t buy our third superyacht”, or they increase their prices a little bit, and consumers in the West — and not only in the West, consumers in India, in China, — could say our forefathers lived for millennia without buying a new outfit every week.
We have a planet that is ending. Maybe we should also live more sustainably and buy higher quality goods that will last a little bit longer. We see now that the average time that a garment is worn, at least in the West, in Europe, is about three times and then it’s thrown away. That is an idiotic model and is not sustainable at all. Clothes are not single use. You can keep clothes for years and years. We need to get back to a more sustainable model of clothes production that includes a fair wage for the people that make them.
Q. Are there any examples of decentralized resistance movements to these realities? What are the ways in which unions, civil society actors, and other associated organizations have been able to mount a challenge to them? Have wider mobilizations against Big Tech (in the context of e-commerce, for example) had any effect on the garments sector?
Paul: We have seen some new forms of organizing mainly among home-based workers. There are some very active groups now, for instance in Pakistan, who try to organize home-based workers. Traditionally, they were not allowed within the union because the union didn’t see them as real workers — the perception was that these were only women that worked from home as a hobby. That has really started to change with the way these women have organized and really made a voice for themselves and say — “no, we are workers, and we deserve all the protections that all workers have”.
Similarly, we have seen an amazing amount of solidarity between Amazon logistics workers in the West who have been going on strike, with the garment workers, and we have seen garment workers coming out in solidarity with the Amazon logistics workers. This has been heartening to see, and really, if there is one thing that this pandemic has shown a lot of people in the so-called West, it is that a lot of the lower-paid logistics workers were also seen as expendable. They were not given PPE protection or any protection against Covid-19. They were supposed to continue working and work even harder and longer hours because everybody shifted to online ordering. We have a realization among informal and gig economy workers in the West, that their position is marginally better than the ones in the Global South, but by not all that much, and that they suffer from the same dynamics. So, we have seen a lot more solidarity there.
I cannot honestly say that this has led to a breakthrough, but it is a really promising start to grow global solidarity among workers who have been really hard to organize because of the gig economy model, where workers are not in a factory anymore.
Q. What do you see as the most urgent agenda for action today? Where is current action from civil society/workers, etc., lacking?
Paul: I think at the most basic level, we need to increase solidarity. That means bringing more stories to light, so that people actually know that the workers exist. As civil society, we should make sure that workers, all across the world can tell their stories and can make their voices heard. That is becoming easier with social media and mobile phones. Also, we need to learn how to use new legal frameworks that are coming up, because they will most likely be passed but the real test will be their enforcement. So, we will need to pay attention to getting pilot cases out there, to get some important decisions on the book, ones that really mean that these new laws get some teeth, that there is an actual remedy and an actual punishment for misdeeds.
We need to increase solidarity. That means bringing more stories to light, so that people actually know that the workers exist. As civil society, we should make sure that workers, all across the world can tell their stories and can make their voices heard.
We need to keep emphasizing the importance of a living wage because, let’s be frank, there is a really fluid boundary between poverty wages and forced labor. There are quite strict forced labor laws taking effect now, but their definition of forced labor is quite often old-fashioned — oh yeah, you are locked up in prison and you have somebody whipping you and you have to work. Well, if you’re paid USD 1 per day and you have to work 18 hours just to pay the rent, that is not because you love your job so much. That is also a form of forced labor. So, the boundaries between the two are quite fluid. And we push for it to be recognized as what it is — a legal right noted in the UN Guiding Principles, to work, to a living wage. It is a human right. It is not something that a bunch of radical people is asking for. This is a baseline that we need to set in laws.
