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They've Ordered but Aren't Paying: Who is Paying The Price?



The repercussions of the global shut down from Covid-19 are enormous. It has effected every single one of us. But, for some it is life threatening - not because of the virus, but because they can no longer support themselves or their family financially.

Large retail companies have decided they are longer going to pay their suppliers for their orders. In the retail and clothing industry (for the most part) companies and suppliers agree to issue payment once their garment order is completed and shipped in full. However, because of the economic impact of Covid-19 throughout the world, clothing sales have dropped drastically. And in response to this, large clothing companies have cancelled or delayed their orders from suppliers. The majority of these orders have been completed in full by the hands of thousands of Bangladeshis, Chinese, East Indians etc.


The clothing industry is one of the many industries that have been hit hard because of the pandemic. With retail deemed "non-essential", stores were urged to shut down and as a result, their sales plummeted. Between February and March, clothing sales alone dropped by 52% in Canada. (Find out more statistics on the effects of Covid-19 on different industries). Without a doubt, retailers were hit hard. Some have navigated through these difficult times by stepping up their e-commerce game and increasing their online sales. Consequently, those who couldn't manage to recover have decided to halt their incoming merchandise that they ordered pre Covid-19.

As previously mentioned, those affected by this decision were countries oceans away. In Bangladesh, garment manufacturing makes up around 80% of the country's exports. So you can imagine how many Bangladeshis are employed by factories to produce garments for companies like H&M, Top Shop, The Children's Place, TJ Max, etc. Around 2.7 million factory workers in Bangladesh alone have been affected by these order cancellations. These orders have totalled $3.7 billion, and 980 million clothing articles have been produced but unaccounted for.

Bangladesh is the second largest garment manufacturer in the world but is tailing right behind China. China is still the largest (because it has 1.232 billion more people) but with it's rise in minimum wage, more and more companies are working with factories in Bangladesh, as it makes more sense financially. (Because how else are we able to pay $6.99 for a Walmart t-shirt or $2.99 for a tank top at Joe Fresh.)


It really comes down to the easy way out. These large corporations have cancelled their orders because they have the right to do so without having to think of the impact. The cost of doing so, means that thousands of factory workers are out of jobs and suppliers are left with the cost of manufacturing these orders. This means that the factory workers are no longer receiving the $95/month wage they were promised. This money goes towards paying for their basic human necessities: feeding their families, clothing their children and keeping shelter over their heads. Because of the large scale order cancellations, factories have been forced to shut down and send their workers home. With no severance pay, no notice ahead of time, and no guarantee they'll get their job back.

Like I said, Covid-19 has had a huge impact on retail companies. I understand these are extremely trying times for clothing companies. However, to protect companies' monetary losses, the answer is not to back out of the million dollar orders already completed. This is cutting off the only source of income for millions of families.

There are ways around this: some companies have managed to form an agreement with factories overseas to establish a financing plan to pay in increments for their orders. Others have agreed to pay a percentage of the factory workers' wages. Some have paid for the orders that have been completed in full but are stopping future orders. There are ways to cushion the unavoidable economic blow on the retail industry and suppliers overseas. But somehow, still some of the biggest name brands are ignoring the livelihood of millions and choosing to do nothing. These companies include: Top Shop, Walmart, TJ Max, The Children's Place, Urban Outfitters/Anthropologie, Sears and Kohl's (visit this page to stay updated on this list).

The root cause of the current situation goes much further than Covid-19; these workers are continuously taken advantage of by the lack of the labour standard systems in place. As human beings, the systems and processes we have built have let these individuals down. We continue to turn a blind eye because it's easier to ignore than to take proper action. Situations like this will continue to come up until companies can look at factory workers not as machines but as humans with a life just as valuable as anyone else's.

How is it that the majority of these brands are vocal about supporting ethical labour standards and fair wages or even eco friendly material, but then getting caught time and time again in these human rights violations? Does their stance on fair wages end when China raises their minimum wage so they find the next cheapest factory? At the end of the day, yes, this current situation is heartbreaking and inhumane, but this is the reality of the garment industry, and there's been no substantial change since the start of the industrial revolution... 260 years ago. The countries who've dismantled unjust labour standards (such as Canada and U.S.) have instead allowed domestic companies to contract work in foreign companies where labour laws are arguably nonexistent is managed to go around the standards to take advantage of labour laws and minimum wage in China, Bangladesh, India, etc.

So I will say it again, the least you can do is stay informed on the companies you support. Especially the ones you support on a daily basis. Do they have a bigger goal than to supply you with the newest trends at the cheapest price? Are they selling you quality goods? Where do they manufacture their products? Simple questions but effective in keeping these companies accountable for their actions.


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