Workers and fashion-loving consumers alike are fighting back against the world’s top fashion brands, which has left independent suppliers in the lurch for up to US$40 billion in unpaid bills.
When COVID struck and the malls shut down, more than 2,000 retail and fashion companies abruptly cancelled thousands of orders, many failing to pay even for those that had been completed. The small suppliers who produce some of the world’s best-known brands – The Gap, Nike, Primark, H&M and hundreds more – were forced to cut staff or even close their doors, leaving millions of workers struggling to feed their families.
At the best of times, garment workers, most of them based in Asia and primarily female, live precarious lives. They work up to 60 hours a week earning as little as $2 to $3 an hour while working at breakneck pace in often unsafe conditions.
In Bangladesh, India, Cambodia, Kenya and other centres of textile production, workers have protested to regain their lost wages. But social media, which often exposes power imbalances, may prove the most effective tool for recouping the money the workers are owed.
Enter Remake, a California-based group of millennial and Gen Z designers and activists dedicated to “making fashion a force for good.” Galvanized by research published by the Worker Rights Consortium (WRC) and Penn State’s Center for Global Workers’ Rights, Remake, along with a a global network of labour unions and labour rights advocates emerged to demand that brands pay factories the billions they owe. Under the hashtag #PayUp, Remake used Facebook, Instagram and Twitter to shame the big companies that have greatly profited from their poorly paid global supply chains.
Never underestimate the power of fashionistas: by the fall, 273,000 people had signed Remake’s petition, and Adidas, H&M, The Gap, Lululemon, Ralph Lauren and Primark were among the 21 brands removed from Remake’s hit list, by promising to pay for cancelled and in-production orders in full, and in a timely manner. Remake estimates this effort will recoup US$22-billion worth of payments for overseas suppliers – about half the total bill it believes the retailers incurred.
In October, Penn State and WRC released an updated research brief, Unpaid Billions, documenting US$16.2 billion in cancelled orders and retroactive price reductions by garment brands and retailers, noting, “The result has been a dramatic loss of income and jobs for millions of garment workers.”
Among the companies still holding out as of November: Arcadia (which owns Topshop), The Children’s Place, JCPenney, Oscar de la Renta, Urban Outfitters and TJX, which owns Marshalls, Winners and HomeSense in Canada. (See sidebar below.)
How do such inequities happen? Apparel buyers used to fund new inventory using letters of credit, which guaranteed payment – without delays or further haggling – once the products were shipped. But The Wall Street Journal reports that big brands abandoned that practice over the last decade, “opting instead for an open-account system – essentially an honor system –where factories trust retailers to pay after shipment.” Factory owners had little choice but to go along.
“In the Covid-19 crisis, this skewed payment system allowed western brands to shore up their financial position by essentially robbing their developing country suppliers,” director of the WRC and co-author of the study, Scott Nova, told The Guardian.
Remake founder and CEO Ayesha Barenblat recently issued a campaign update:
“Missing from all of these fashion conversations of building back better post COVID-19 are workers whose wages and safety continues to be in a free fall. But if we have something to do with it, CEOs of fashion brands and the billionaires behind them, cannot just slip back into polite society after the devastation they have caused.”
Barenblat announced that Remake is launching the next phase of PayUp Fashion, demanding that brands go beyond just paying up and also commit to keeping workers safe, boosting wages and supporting much-needed laws and regulations that put workers at the center of a stronger, more equitably fashion industry.
As Barenblat told Vogue in the summer, #PayUp’s success “illustrates the power of activists and citizens coming together to hold the fashion industry accountable.” However, she adds, “we will not rest until the industry commits to liveable wages and social protections for garment makers so that never again will women who make our clothes be pushed to the brink of starvation.”
Worker Rights Consortium COVID-19 Tracker keeps tabs on fashion brands have paid up as well as those that have made no commitment to pay in full for orders completed and in production.
Companies still on the delinquent list:
American Eagle Outfitters (American Eagle, Aerie)
Li & Fung/Global Brands Group
Oscar de la Renta
The Children’s Place
TJX (T.J. Maxx, Marshalls, HomeSense)
Urban Outfitters (Anthropologie)
A version of this story appeared in the Fall Issue of Corporate Knights.