Pakistan’s wage struggle shows the fragility of progress in the global garment industry
Major fashion brands stay silent as devastating wage theft continues in their supply chains
In July 2021, in a year which presented few reasons to be happy, the garment workers of Sindh province in Pakistan had cause to celebrate. The provincial government had just announced a 40% increase to the minimum wage, raising it from 17,000 to 25,000 rupees (from €84 to €124 at the current exchange rate) per month. Although still well below living wage levels, the hike was an urgently needed step up from the poverty pay that left workers struggling to survive during the pandemic.
A government-ordered increase should have been water-tight, immovable. It should have guaranteed workers enough money to feed their families and pay their rent. However, progress in the garment industry is fragile. Now, half a year later, the promised wage increase has still not materialised.
Factory owners, squeezed by brands’ desire for ever-cheaper production and fearing that they wouldn’t be able to meet the higher labour costs, banded together to appeal against the order. The Sindh Supreme Court is in the process of making a final judgement and a decision is expected later this month. In the meantime, workers continue to be paid barely enough to live and are owed six months of a 40% wage increase. This is wage theft on a huge scale, yet the garment brands sourcing wares from the province, including Gap, H&M, C&A, Aldi Nord, Bestseller, Levi’s and Fruit of the Loom, have stayed silent. The brands are knowingly allowing systematic theft to continue in their supply chains, going against their self-professed desire to see workers paid a decent wage.
Brands relabel clothing lines as ‘conscious’ and ‘ethical’, yet they avoid addressing one of the least ethical aspects of their business model: poverty pay.
Sindh is one of Pakistan’s two main garment-producing hubs, second only to the Punjab region. The textile and apparel industry is the second largest employer in Pakistan and comprises 60% of all exports. But despite its importance to the economy, wages in the province have historically been at poverty levels. This, combined with high inflation in recent years, rising to 12.3% in December 2021, and significant challenges arising from Covid-19, including unpaid wages, has left many workers unable to afford the basic necessities of life (including food and rent).
In an industry built on exploitation, the announcement of a significant wage increase in response to workers’ struggle represented hope, not just for the workers of Sindh, but for garment workers everywhere. It was recognition that the industry norm is unsustainable, a fact not altered by brands’ over-use of the word ‘sustainable’ in efforts to sell more clothes. And if the Sindh Supreme Court ultimately comes down on the side of the factory owners, it will remain so.
A pattern of wage theft
The situation in Sindh is part of a pattern of brand inaction, and there are clear parallels between this and the mass wage theft taking place in Karnataka, India. Following a state-ordered minimum wage increase in April 2020, more than 400,000 garment workers still haven’t been paid the legal minimum wage and are now owed more than €49 million. Multi-billion dollar brands sourcing from Karnataka like Nike, H&M, C&A, Zara and Tesco – many of which also source from Sindh – have done little to stop this monumental wage theft from happening in their supply chains. Despite a ruling from the Karnataka High Court in September 2020 that the minimum wage, including all arrears, should be paid to workers, most have still not received the money owed. Karnataka workers tell of deprivation and desperation, with one woman worker explaining: “if we had got the wage increase, we could have at least eaten vegetables a few times a month. Instead, I have only fed my family rice and chutney.” Such stories are easily found among the workers in Sindh as well.
Workers have limited recourse to justice in the face of mass wage theft. In the case of Sindh, the Supreme Court have issued an interim ruling in December stating that the workers should be paid the arrears owed to them. As the court deliberates on its final judgement, it has faced undue pressure from suppliers who have threatened to pull production from the province and relocate to areas where wages are lower should the ruling not land in their favour. This would leave potentially hundreds of thousands of workers unemployed, with little to no savings to fall back on and no reliable safety net in the form of adequate social protections. In Karnataka, meanwhile, the High Court ruling has thus far failed to change factory owners’ behaviour, who continue to appeal their decision. And, in both cases, those with the power to turn this around have stayed conspicuously silent.
Brands’ smoke and mirrors
Brands bear a substantial amount of responsibility for why supplier factories feel unable to shoulder higher labour costs, yet they have failed to step up to remediate the wrongs caused largely in response to their business practices. In Karnataka, brands issued toothless statements calling for their suppliers to adhere to the legal minimum wage. In Sindh, brands have hardly spoken out at all.
In a continuous display of smoke and mirrors, brands spend huge amounts on PR to protect their reputations and paint themselves in a positive light. They relabel clothing lines as ‘conscious’ and ‘ethical’, yet they avoid addressing one of the least ethical aspects of their business model: poverty pay. They don’t engage in meaningful negotiations directly with trade unions and workers about their demands, without which it becomes impossible to embed real and lasting change. And they fail to even acknowledge their own role in creating this situation, refusing to overhaul purchasing practices which pit suppliers against each other and push production costs ever lower.
Paying a living wage should not be optional nor seen as a CSR officer’s pet project. It should be a fundamental requirement for running a business.
Brands put their name to ‘humanitarian’ initiatives designed to empower garment workers, such as Gap’s [email protected] scheme. Launched in 2021, [email protected] aims to offer female garment workers “tools they can use to uplift themselves and their families for generations to come.” Powerful words, yet they bypass the most fundamental of steps for empowering women in the garment sector: a living wage. There can be no true empowerment without financial empowerment, and paying a woman a living wage gives her choices about her and her family’s future that remain beyond her grasp on the dominant wages in the industry. Gap and other brands have a perfect opportunity to help workers ‘uplift themselves’ by engaging with their suppliers and taking clear action to ensure the legal minimum wage is paid in both Sindh and Karnataka. Paying a living wage should not be optional nor seen as a CSR officer’s pet project. It should be a fundamental requirement for running a business.
Brands could take a key role in advancing workers’ rights by telling their suppliers to reflect the increase to wages in the product costs charged to them. This would have a negligible impact on their profits, but would give their suppliers the confidence to continue production in the province while paying the legally set minimum wage. Brands should also commit to working with suppliers and trade unions to develop a sustainable system for annual wage increases, thereby actively working towards a living wage. And they should be transparent in the steps they are taking to prioritise workers’ rights and ensure decent work.
This is an opportunity for brands to show that their codes of conduct and business-led initiatives have meaning. H&M’s code of conduct, for example, states that the brand’s “minimum requirement is that employers shall pay at least the statutory minimum wage, the prevailing industry wage or the wage negotiated in a collective agreement, whichever is higher.” Brands often hide behind legal minimum wages, arguing that it’s not up to them to set and increase wages. In 2018, H&M publicly said it did not want to create “an isolated bubble of fairness” by unilaterally paying higher wages. Now, when faced with the chance support government-sanctioned wage-raises, H&M and others have utterly failed to live up to their own promises.
These cases of wage theft exemplify the culture of impunity that runs through the global garment industry, where brands at the top skilfully distance themselves from abuses at the bottom. They have built an industry entirely receptive to their wants, one that allows them to maximise profits at the cost of workers’ rights, and gives them the freedom to cut and run when prices increase or abuses are uncovered.
The solution to mass wage theft in both Sindh and Karnataka should be simple. A minimum wage increase was ordered. Now it should be implemented and actively supported by brands. As we wait for the court’s final ruling in Pakistan, brands must understand that if the order is overturned it will take years before such an increase is attempted again in the region. These are years in which garment workers and their children will suffer, living in poverty and insecurity. The impact on the next generation is clear, and so is the action brands must take to avoid it.
H&M, C&A, Levi’s and others must communicate unequivocally with their suppliers, assuring them that they will cover any shortfall by paying more for products. They must commit decisively to supporting workers in their struggles for a living wage, as anything less is to knowingly undermine workers’ rights. As we enter a new year, there is fragile yet tangible hope that the 40% minimum wage increase will be upheld in the Sindh province. But the power to make it a reality lies in the hands of brands.
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