CGWR and WRC Collaborate on New Research Brief Focused on Garment Workers

Unpaid Billions: Trade Data Show Apparel Order Volume and Prices Plummeted through June, Driven by Brands’ Refusal to Pay for Goods They Asked Suppliers to Make

UNIVERSITY PARK, Pa. - The Center for Global Workers' Rights (CGWR) and the Worker Rights Consortium (WRC) collaborated on a new research brief last week delving further into the impact of the coronavirus pandemic on garment workers worldwide. CGWR director and professor Mark Anner coauthored the brief with Scott Nova and Liana Foxvog of the WRC.

From the executive summary: 

New Trade Data Prove Brands’ Retroactive Order Cancellations Drove a Massive Plunge in Apparel Imports

On March 27, 2020, the Center for Global Workers’ Rights (CGWR) and the Worker Rights Consortium (WRC) released "Abandoned? The Impact of Covid-19 on Workers and Businesses at the Bottom of Global Garment Supply Chain," a report focusing on the response of global brands and retailers to the sudden collapse of apparel demand resulting from the Covid-19 pandemic. This paper, analyses by other researchers, and news reports—all relying primarily on accounts from garment suppliers and their trade associations—painted a deeply disturbing picture of corporate irresponsibility at a moment of global crisis. Suppliers around the world told the same essential story: beginning in March, many leading apparel corporations began reneging on their financial obligations to the factories that make their clothes. According to supplier accounts, in some cases corroborated by leaked correspondence between buyers and suppliers, brands and retailers: 

  • retroactively canceled, in part or in whole, orders that suppliers had already produced or were in the process of producing; 
  • postponed delivery of, and payment for, orders on an indefinite basis; and/or 
  • demanded large retroactive price discounts in exchange for agreeing to take delivery and pay for goods. 

This behavior was enabled by the existing payments structure in the apparel industry, under which suppliers bear the up-front cost of production and buyers pay nothing until weeks or months after the factory ships the goods.

The CGWR and the WRC estimate that buyers, in the initial weeks of the crisis, reneged on their financial commitments on roughly USD 40 billion in orders— with devastating implications for suppliers and workers. In Bangladesh alone, more than one million workers were adversely affected, with many being sent home from work without severance or furlough pay.

You can view the full research brief here.  

News articles about the report were also published in The Guardian, Forbesthe New York Post, and CNBC 

October 14, 2020