Unequal Burdens
It is a truism that the Covid pandemic has been hard on everyone. But recently a story by Anuradha Naguraj for Thomson Reuters crossed the transom that underlines how much harder it is for migrant workers cut off from the usual support networks. The garment industry in India relies heavily on migrant labor for its workforce. When the pandemic hit in March, scores of buyers cancelled contracts for apparel that was already in production. Factories were abruptly closed; suppliers were out the costs of the raw materials; workers were sent home. But for many migrant workers, getting home was just not in the cards. Too far away, no means of travel, no money to get there.
Prime Minister Narendra Modi issued an advisory asking employers to pay workers their full salary during the lockdown. “Be kind” to the workers, he advised. Kindness is lovely, of course, but it is also discretionary.
A disturbing number of employers are now docking workers pay for the salary, shelter and food provided during lockdown, blackmailing them to work unpaid overtime or the factory will fail and the workers will be out of a job.
A worker in Tamil Nadu state, who requested anonymity, said the salary cuts swallowed nearly 20% of her take home pay.
"It has become almost impossible to pay school fees or the installments for the loans we took during lockdown," she said. Naguraj, A. (2020, November). “Indian garment workers cover bosses’ lockdown losses” Thomson Reuters Foundation.
Kindness has its limits, it seems.
The effect on the children of these workers is devastating. The UNHCR estimates that we are likely to have thirteen million more child marriages in the next ten years as a direct result of the immiseration due to Covid.
There’s plenty of shame to go around, to be sure. The Worker Rights Consortium at the University of Pennsylvania has an excellent tracker tool for identifying companies that elected to skip out on their obligations. By the way, though ordering apparel and deciding not to pay feels highly illegal, in fact, it isn’t. Cancellation clauses in the supplier’s contracts reflect the brutal imbalance of power between the brands and the suppliers. They do it because they can.
Well-known brands like TJX (parent company of TJMaxx), Kohl’s, Urban Outfitters (Anthropologie), American Eagle, The Children’s Place, etc. etc. etc. have been shoveling money at their shareholders, while stiffing their suppliers or exacting huge retroactive discounts. God forbid the wealthiest links in the chain should suffer.
TJX (parent company of TJ Maxx) falls in the lower half of companies, according to As You Sow.
But the Worker Rights Consortium also identifies brands that are doing the right thing, either paying in full for orders that were in production when the pandemic hit, or providing low-cost bridge loans to keep suppliers afloat for the duration. Levi Strauss, adidas, The Gap, H&M, Target, Lululemon and many other companies have decided that bare-knuckle capitalism may not be the best strategy for their brands after all.
“Better to build a fence at the top of the cliff than to run an ambulance service at the bottom.” Fuzz Kitto (Be Slavery Free)
As You Sow, a non-profit focused on shareholder advocacy, agrees with that notion. Their thinking is that investors who do not pay attention to social justice in their investing strategy are running the risk of brand destruction when slavery or forced labor is found in the supply chain, or sexual harassment or racism cases expose an engrained workplace culture of inequality. As Patience Marime-Ball of Women of the World Endowment pointed out in a recent As You Sow webinar, DEI (diversity, equity and inclusion) is measurably good for business. For example, companies that give generous family leave, retain many more of their workers and thereby save money.
As You Sow is developing a risk assessment tool with Whistle Stop Capital that scores the companies of the S&P 250 (the largest ones) on metrics like workplace diversity, equity and inclusion. Using data from Know The Chain, they evaluate companies on commitment and governance, traceability and risk assessment, purchasing practices, recruitment, worker voice, monitoring and remedy.
Why remedy?
According to Robyn Ormerod of the International Organization of Migration (IOM), there are 25 million people worldwide in forced labor. Recruitment fees paid by migrants to labor brokers can equal a person’s annual salary. No worker should pay for a chance at employment ever. But many have, and if companies are to clean up their supply chains, then repaying the workers for fees expended to migrate and fill those positions is an essential first step. It’s also the law – at least in Australia. The recent passage of the Modern Slavery Act requires companies to remediate if they have caused or contributed to slavery and forced labor. (Be Slavery Free webinar on Addressing Modern Slavery in Business Operations and Supply Chains)
“Have you ever paid a recruiter for the chance to apply for a job? Have you ever been asked to hand in your passport?” Robyn Ormerod (International Organization for Migration)
Aditi Wanchoo, Senior Manager, Social and Environmental Affairs for adidas Group, has twenty years of experience working on corporate social responsibility and worker issues. Companies are generally good at identifying Tier 1 labor conditions (their own manufacturing plants), but extending that knowledge and training to Tier 2 suppliers (fabric, leather) is the current effort. For Tier 3 (raw materials), adidas performs risk assessments by region, so as to better focus their effort. Know the Chain tells the company where the pressure points are, and they use the benchmarks to drive improvements. Wanchoo stresses the critical importance of collaboration between brands or with the Better Cotton Initiative. Such work is far more effective when a coalition of brands imposes standards.
Snack Company Mondelez is relatively strong on commitment and governance, but falls short on recruitment and worker voice (Know The Chain)
She stresses the importance of a robust grievance mechanism to identify risks and abuses early and resolve issues before they can fester. New technologies are making this easier. Starting with SMS messages, workers now use WhatsApp to anonymously send grievances to the factory. A grievance dashboard is monitored by companies to ensure that grievances are responded to and resolved in a timely manner. 90% of workers have access to a grievance mechanism, and the suppliers are seeing the benefits. Complaints can range in severity from sexual abuse, to illegal termination to dormitory conditions to not liking the music piped in to the factory floor. It all matters.
Having suppliers pay broker’s fees actually ends up saving money because the supplier has a lot more leverage than the individual worker when negotiating recruitment fees. Remediation is relatively expensive. It is infinitely preferable to avoid the injustice in the first place.
Monitoring supply chains is labor-intensive and exacting and very much requires local staff on the ground. Aditi Wanchoo was on a visit to a factory with only about 20 minutes warning to the factory owners. When she asked the workers whether they had access to their passports, every single one showed her the passport in their pocket. Wanchoo questioned them why they had the passport with them, and was told, oh, it’s safer than leaving it in the dorm. Only when chatting with the workers off the factory floor in the dormitory in the evening, did they let on that the owners had given them their passports back just before the visit.
Max Pottler, IOM Regional Project Manager based in Vietnam, also stressed the importance of the United States’ List of Goods Produced by Child Labor or Forced Labor. Nothing brings companies to heel quite as effectively as being unable to reach the world’s largest market.
Know the Chain still gives fairly dismal scores to most companies when it comes to freedom of association (in other words, unions). We still have much to do in the field of worker’s rights. But it is heartening to see people coming at it from so many different directions, from companies, to shareholders, to NGOs and the workers themselves. It is difficult to correct a grotesque imbalance of power. But it is not impossible. Keep at it!