Bangladeshi worker works at a garment factory in Gazipur outskirts of Dhaka, Bangladesh, on March 6, 2020.
Mehedi Hasan| NurPhoto | Getty Images
SINGAPORE — The coronavirus outbreak has left the garment sector in Bangladesh reeling — and thousands of factory workers bore the brunt of it as their livelihoods were abruptly taken from them.
The garment industry has long been the lifeline of the economy, but as the pandemic ravaged the world, billions of dollars worth of orders were canceled as global retailers shut their doors and brands held back orders.
Before the outbreak began, 22-year-old Mousumi, who declined to give her last name, started a new job at a garment factory in January after being unemployed since 2018. She made about 10,000 Bangladeshi taka ($118) each month until March, when factories around the country were ordered shut so as to slow the spread of the virus.
When factories reopened with limited capacity in April, Mousumi said she was put on standby for three months. Then, on Aug. 1, she said she was fired.
“They were only saying one thing: that they’re firing people because of coronavirus,” Mousumi said, according to CNBC’s translation of her remarks in Bengali.
Dulali, also 22, lost her job at ABA Fashions Limited in April where she used to make up to 11,000 taka a month with overtime pay. She has struggled to secure employment since then. Like Mousumi, she too was told the pandemic was to be blamed.
“They said because of coronavirus, there were no new orders coming and the factory owner was struggling to pay workers,” Dulali said, according to CNBC’s translation of her remarks in Bengali. She said her job search had been futile and that many others like her were also looking for work.
Dulali is living with her eight-year-old daughter. “We are living under a lot of hardship right now,” she told CNBC. She said they owe about 16,000 taka in rent. They are now scraping by with her earnings of around 500 taka each month as a cook at her landlord’s place — a fraction of the pay she used to earn.
CNBC spoke with six workers, including Mousumi and Dulali, by phone through the Bangladesh Independent Garment Workers Union Federation which works with various trade unions. Some of them are employed, while others say they have been looking for work since April or May.
All of them spoke about the financial hardship they face, including potential destitution, exacerbated by the pandemic’s crippling impact.
As the virus spread, many top retail brands canceled orders that were already in production. The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) estimated the pandemic had an immediate impact on 1,150 factories that reported $3.18 billion worth of order cancellations. Between March and June this year, Bangladesh lost $4.9 billion worth of apparel compared to the same period in 2019, according to BGMEA.
BGMEA told CNBC that in the last three to four months its member factories have reported 71,000 workers have been laid off. A spokesperson said that most factories have retrenched workers who were employed for less than a year.
‘Vulnerable’ and ‘precarious’
Bangladesh is the world’s second-largest clothing exporter — behind only China, according to ratings agency Moody’s.
The garment industry is a major source of export income for the country. Ready-made garments comprised 83% of Bangladesh’s total exports worth $33.67 billion in its 2019-2020 fiscal year, according to data posted by BGMEA.
More than 4,600 garment factories in Bangladesh make shirts, T-shirts, jackets, sweaters, and trousers. The apparel are mostly shipped to Europe, the United States and Canada, to be sold by local retailers in those countries.
Bangladeshi female workers work at a garments factory in Gazipur outskirts of Dhaka on February 17, 2018.
Mehedi Hasan | NurPhoto | Getty Images
Some 4.1 million workers — mostly women — work in the sector. But they often work long hours under punishing conditions, and earn very low wages.
“These are some of the most vulnerable workers in Bangladesh and in countries where there’s garment exports. Young workers, women workers, (are) often internal migrants. So they’re coming from the countryside to the city,” Mark Anner, a professor of labor and employment relations at Penn State University, told CNBC.
Bilkis Bigum, 30, lost her job as a garment factory worker on April 4 and has not found work since. To get by, she worked at a sick neighbor’s house as a domestic helper and initially relied on others for help with food.
She’s now taking up temporary, hourly work that nets her around 200 taka to 300 taka — but it’s not enough to pay rent at the moment. Her brothers, who are working, sometimes help her out but they have their own families to look after too, Bigum said.
“Now I work here and there, at least that way I can earn some money,” she told CNBC in Bengali.
Many of them don’t have savings and live from paycheck to paycheck, Anner explained. So, when they lose their jobs, the impact is immediate.
“Sometimes their families back home depend on them, on internal remittances — sending money from the city back home to their families. These are the most vulnerable workers, precarious in so many different ways and they’re paying the harshest price for this crisis,” he added.
Anner published a report in March about the pandemic’s immediate impact on Bangladesh’s garments sector. He said the report found many brands were initially unwilling to pay suppliers for the production costs and raw materials that were already purchased. That forced many factories to shut down operations and furlough or fire workers.
Reuters reported that while exports have staged a recovery in recent months, factory owners expect orders to be slashed by two-thirds, and say retail buyers were demanding up to 15% price cuts.
Poor working conditions
Mousumi said she joined a new factory just over a month ago that makes T-shirts and face masks.
The work hours often extend beyond the usual 8 a.m. to 5 p.m., she said, adding that she sometimes worked shifts that stretched beyond midnight. “There are no fixed duty times,” she said in Bengali. “There is a lot of pressure at work, so we are forced to work. They give overtime for any work we do after 5 p.m.”
The salary she draws is less than what she earned at her previous factory, she said. She makes about 8,500 taka per month, about $100, and receives overtime compensation on days she works beyond 5 p.m.
“It’s less but I am not finding work anywhere else,” Mousumi said. “I have a lot of problems in my family so I am forced to do this job.”
Workers in the sector are not paid a living wage and often work in poor conditions, according to Thulsi Narayanasamy, senior labor rights lead at the Business & Human Rights Resource Centre in the U.K.
“The minimum wage that exists in many of the Asian countries, including places like Bangladesh and Cambodia, don’t cover the basic costs of living – what we call a living wage – for these workers,” she told CNBC by phone.
“So a lot of them are in debt, they don’t have enough to cover three meals a day or to cover the basic costs for them and their family. That’s the cornerstone of the industry’s exploitation,” Narayanasamy said, adding that they work “incredibly long” hours to fulfil orders with very short turnaround times. That leads to a whole range of safety issues in the factory including fire hazards, she said, pointing to the 2013 garment factory collapse in Dhaka that killed more than 1,000 people.
Brands hold power
Narayanasamy said the root cause for the numerous issues facing workers in the global apparel industry is the “deep power imbalance between the fashion brands and the factory suppliers and workers.”
As there are more suppliers than buyers, fashion brands, through their purchasing practices, determine how much they pay for orders and what kind of turnaround time they give to factories.
“Factories are not in a position to negotiate strongly because of the huge number of factories around the globe and the small number of fashion brands that monopolize the sector,” she said. “So what we end up seeing then across the board, there is nonpayment of a living wage — and that’s been well documented for a long time.”
Penn State’s Anner said he is now researching what current and future orders from brands to the factories would look like at a time when global demand for apparel is low as countries remain in partial lockdowns and many people are being asked to work from home.
Ready made garments workers works in a garments factory in Dhaka on July 25, 2020.
Ahmed Salahuddin | NurPhoto | Getty Images
“The big companies don’t know how much they’re going to sell in the coming months, they are not sure how to forecast going forward, so they’re often placing orders — but at much smaller volume than they would have this time a year ago,” he said. Data indicated buyers were pushing down on price much more now than they did years ago, he added.
“That to me is a considerable concern because that’s a double squeeze on the suppliers and the squeezes on suppliers always translate into a squeeze on workers,” he said.
For many of the workers, the pandemic has exacerbated their poverty and driven them deeper into debt.
Mousumi said she looks after her mother and has to send a monthly allowance to her in-laws. She said she accumulated debt while she was unemployed between 2018 and 2020. After losing her last job in August, she also accrued rental dues.
“Financially, I was facing a lot of difficulties … so I had to take that job,” she said.