Impact of Coronavirus on Fashion

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More than 1 million garment workers in Bangladesh already have lost their jobs or have been furloughed because of order cancellations and the failure of buyers to pay for canceled shipments. Nearly 60% of the 316 factories that responded to the survey by the Center for Global Workers’ Rights and the Worker Rights Consortium, a Washington, D.C.-based labor rights organization, said they had already closed down most of their production.

About 6% of factories have had all orders canceled due to the outbreak, while nearly 46% said they have lost a big share of their orders.

The survey, conducted March 21-25, included nearly 200 large suppliers with more than 750 workers that mainly make garments for European markets.

It found nearly all buyers refused to contribute to wages for those workers, and more than 70% of those furloughed were sent home without pay. Of the workers who were fired, less than 20% were given severance pay, the survey found.

Anner and other labor experts say the big fashion retailers are resorting to “force majeure” clauses in their contracts — usually used in case of natural disasters or war — to justify not paying manufacturers that have already paid for fabric and other materials and labor to make the orders. Earlier, suppliers were being penalized for late deliveries resulting from difficulties obtaining fabric or other materials due to factory shutdowns and other disruptions caused by the virus outbreak that originated in the central Chinese city of Wuhan.

Factory owners are unlikely to fight back out of fear they might lose future business once the crisis passes.

The virus outbreak “is showing us just how extreme that power imbalance is,” Anner said. “It’s just an absolute disaster.”

The damage is not limited to the garments sector. The International Labor Organization has estimated that 25 million jobs may be lost due to the virus outbreak.

Bangladesh, a nation of 160 million, is deploying soldiers and police to enforce a nationwide 10-day shutdown to slow the spread of the coronavirus in the densely populated country. But in an indication of the importance of the garment sector, which provides 80% of the country’s export earnings, those factories have been deemed an essential industry.

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