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Big brands and cheap clothes in the West are bad news for Ukrainian workers

Western fashion brands are happy to outsource their production to Ukrainian textile shops, but labour conditions here aren’t so different from sweatshops in Asia.

Oksana Dutchak
7 July 2020
Flickr. Some rights reserved

There isn’t much information available about the factories in Ukraine that carry out orders for western fashion brands. What information there is praises their quality, stating that not every company is capable of producing work for well-known brands such as Hugo Boss, Esprit, Adidas, C&A, Asos and Marks & Spencer - according to open sources, these and other brands are produced in Ukraine.

This export-orientated economic model and attraction of western investment has been seen by Ukrainian governments as the only way to achieve “western” living standards. For the workers in the clothing factories, however, it has very different results.

This article is based on material collected with Anna Oksiutovych and Artem Chapeye between 2017 and 2019 as part of the Clean Clothes Campaign. Names and certain details of factory workers in this article have been changed.

“Staying afloat”

Lena and her ten-year old son live in a village in southern Ukraine, not far from the small town where she works in a clothing factory. Lena is 30 years old, and the factory where she has worked as a seamstress for just over a year has been in production for almost a century.

Built in the early Soviet era, the factory was privatised after the fall of the Soviet Union and re-orientated towards the export market to avoid bankruptcy. In the 1990s, with the collapse of the Soviet economy, impoverishment of the population and flood of cheap clothing from China, most Ukrainian factories had to choose between bankruptcy and joining a western brand’s production line.

Re-orientation towards the west may have allowed some factories to “stay afloat”, but it forced them to work by rules of the global brand names.

Illegal practices are no exception in Ukraine, where about half of the economy and a third of workers are part of a “grey economy”

Capital is very mobile in the textile sector: brands often don’t have their own factories in a country – they just put an order together, provide the raw materials and take delivery of the finished product at local factories as part of a short-term contract. The core profit and the levers of power are, moreover, concentrated in the upper echelons of production - the brands. The industry is marked by stiff competition between factories and countries with cheap labour which often ends up in a “race to the bottom”.

The factory where Lena currently works produces clothing for several western brand names whose goods sell at over £100 apiece – more than what Lena receives for a month’s work. Her take home pay is less than the official minimum wage of 3,800 hryvnya (approx. £100): the factory has a double book keeping system, and Lena is actually paid a few hundred hryvnya less than the official monthly minimum wage. She spends 500 hryvnya (approx. £12) a month and an hour of her time just travelling to and from work. She earns 50% more in the summer, she tells me, as if justifying the work. That said, in summer she works a 10-12-hour day, six days a week.

“I often stay longer, to make up my work quota,” Lena says. “In the summer season I’ve sometimes worked 10-12 hours a day, and once I worked through the night to dispatch an order. I rarely refuse overtime: the bosses don’t like that, and it’s the only way to earn more anyway.”

For Lena and her son, this is also practically the only way to “stay afloat”.

The myth of free choice

Illegal practices are no exception in Ukraine, where about half of the economy and a third of workers are part of a “grey economy”. Most of the factories that produce clothing for western brand names are, however, not part of this “shadow economy” as such, where wages are paid in envelopes, people work without employment contracts and without declaring their income. Lena has a full employment contract and social insurance, but the high level of infringements of labour legislation blurs the distinction between official and unofficial employment.

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Flickr. Some rights reserved

The Ukrainian clothing sector's formal adherence to legislation and presence of “yellow” trade unions makes it an excellent screen for western brands to demonstrate their “responsible” behaviour. This is a purely paper screen, similar to the use of the phrase “made in Europe” which, with the false comparison with Asian sweatshops, hides the numerous infringements of laws and human rights.

If you look closely at many Ukrainian clothing factories, there’s not much difference between them and “sweatshops” – many of them practice intensive overwork, and workers’ pay barely covers their very basic needs. Their average wages make up less than one fifth of the living wage (as calculated by researchers). But most local factories can’t pay any higher wages. Working for western brands, which dictate prices in a situation of cut-throat competition, factories have little choice – they either comply with these conditions or go under.

Despite her meagre wages, Lena and many other workers stay in their jobs and take management threats seriously - often repeated from factory to factory - that “if you don’t like it, you can go elsewhere”.

Aside from this standard threat, factory managers have another very real, although hidden, weapon at their disposal. Since factory wages depend considerably on individual operations - turning a jacket inside out through a small gap in the lining costs less than adding a pocket – and management completely controls which workers do which jobs, dissenting workers are simply transferred to lower paid operations. This can seriously affect their pay. They have to either do what they’re told or leave.

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Flickr. Some rights reserved

“We’ve never protested, we’re all too afraid,” Lena says. “Nobody asks for anything. If someone stands out from the crowd, they’re told to shut up. No one says a word: they don’t want to lose their jobs.”

In practice, the threats to replace dissenting workers often turn out to be baseless - many factories have a chronic lack of employees. Factory managers are forced to organise transport for their workers from their villages, sometimes 150km away, recruit untrained staff and train them on the job, increase production pressure on other staff and cut back on production. The situation has become particularly strained since the new wave of labour migration from Ukraine to EU countries: anyone who has a choice leaves. But the threat of unemployment remains.

For many female factory workers, the “free choice” of alternative work is very limited – by age, health, children to raise, qualifications and the size of the town or village where they live. Lena, a single mother living in a village, has few options when it comes to employment. Having work that pays below the living wage means she has to use logs to heat her house and is happy that she has at least some kind of official work with a stable income, and can even get sick leave if her son is ill. And she knows she’s in a better situation than some:

“There’s another factory, close by in town, that produces clothes for the internal market,” she says. “Things are bad there; there are even backlogs with pay. At least things are stable here with us.”

A string of debts

In the 1990s and early 2000s, many textile factories in Ukraine had financial problems and had to backlog their workers’ pay. With time, the situation stabilised, but not for everyone.

Tatyana has spent all 38 years of her life in a small town in central Ukraine. She went to university in the regional centre, got married and had children. Tatyana’s been working at her clothing factory for about 10 years now, and, unlike Lena, she doesn’t get much overtime. Her monthly take-home pay is about 4,600 hryvnya (£144), and for more than a year she and her-co-workers have their pay delayed for a month or two.

"It takes a lot of time for the tiredness to pass. It’s like you’re going to work, and you’re exasperated, and you can’t see your family and you’ve no rest"

A year ago, there was a similar situation at a textile factory in Zolochevo, western Ukraine, where the workers even held a strike – a rare event in Ukraine’s clothing sector today.

According to workers, management explains delays in payment by citing their own financial problems: evidently one brand that the factory worked with went bankrupt in early 2019 owing almost £12,000 for an already executed order.

As a result, hundreds of staff at the factory have been receiving their pay for over a year in dribs and drabs and have no idea what will happen next. “We have a lot of single mothers working here, without support,” Tatyana says. “They’re not asking for anything special, just what they’ve earned.”

Many people are leaving, as at many other factories – searching for other jobs in their own towns or looking for work in Poland and other countries. But Tatyana hasn’t been able to find anything better yet – having children means that she can’t move to the nearest city or look for work abroad, but anything she can find locally is less suitable, either because of pay or hours.

Tatyana’s husband earns twice as much, but they still can’t ever make ends meet. In winter, they spend more than 65% of Tatyana’s earnings on utilities, and have to scrimp and save. Working at the clothing factory, Tatyana buy clothing and footwear “on credit” at the local market.

Allotments, odd jobs (as in the case of Tatyana), some small state support in the form of social benefits, pensions and subsidies – those are the main supplementary resources relied on by the clothing factory seamstresses. But not everyone can get help from their families, while state social benefits continually drop and are “optimised” (especially after the crisis of 2014). And overtime and allotments only aggravate a critical lack of time, and sometimes also health issues.

After two years of work with hardly any time off, Tatyana had to drop her side job because of an onset of chronic health problems and lack of time for her family:

“Last year I worked like a horse right up to New Year, and started having serious problems with my health – my legs, my back. I was chronically tired and it was getting worse, not going away. Sometimes if I go to bed when I come home, it still doesn’t help. It takes a lot of time for the tiredness to pass. It’s like you’re going to work, and you’re exasperated, and you can’t see your family and you’ve no rest.”

The key to development?

According to the UN Guiding Principles on Business and Human Rights, commercial brands have direct responsibility for human rights breaches in their production chains, including breaches in trade union rights, normal working conditions and just and adequate financial compensation that will provide a decent living.

However, the Ukrainian state also has a key role in promoting this kind of behaviour by companies. The government, as well as the governments of many other poor countries that have been pushed into choosing an export-orientated model of development, have placed their reliance on attracting investment on the back of cheap labour. For the sake of investments, workers’ rights can be reduced and eyes shut on general breaches of labour law. Social welfare guarantees should supposedly keep up with the passing of time, and investments should deliver adequate salaries and fill the state budget. But the reality of the clothing factories – and many other sectors– refutes this logic.

The Ukrainian government has been a poor regulator of the market and incomes: for several years it has held down the minimum wage at a level lower than the effective cost of living for one person. Moreover, austerity, which is the framework for Ukraine’s social policies, is leading to cuts in social support and the public sector of the economy - the latter is always dominated by women’s employment. Thanks to these measures, many working women have effectively no alternatives, and many have to resort to slaving in a “sweatshop”.

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Flickr. Some rights reserved

For 20 years, Valentina, now 50, had an administrative job in a fairly large industrial firm in a western Ukrainian regional centre. The firm had been located there for almost half a century, but closed in the early 2000s – a victim of the general de-industrialisation of the Ukrainian economy and its re-orientation towards the export of raw materials and semi-finished products. Valentina then moved from job to job - as a shop assistant, a nursery worker and a cleaner, trying to set her two children on their feet, until in 2015 she arrived at the clothing factory.

She worked with other women in a workshop where, due to problems with ventilation and heating, in summer the temperature rose to 40 degrees, and in winter she had to work in her outdoor clothes. The factory’s regime was also pretty severe.

“When management people called, everyone sat still – woe betide anyone who got distracted or looked around. It was like a prison. And you could only speak during your lunch break,” Valentina says. 

Valentina had to get up at six o’clock, make breakfast and be out to work by seven. There she cleaned and tidied, and after that she got busy with auxiliary work, turning underwear models that her factory had previously made for several years for an Italian brand into a “sellable state”. She worked 12 hours a day, often over the weekend and occasionally until late at night and from time to time bringing work home, where her teenage daughter helped her put bras together and sew ribbons.

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To the question of how she still had time for domestic work, Valentina answers calmly: “I did it at night. I went to bed at two or three o’clock, or sometimes in the early morning”. This regime allowed Valentina to earn around 10,000 hryvnya (£220) a month, one of the highest salaries ever seen in three years of research into the sector. On this, she could maintain herself and her youngest daughter: “My daughter got a paid place at college, and now I’m taking her out. That is why I needed to work. Everything I did was for her.”

But the factory management didn’t appreciate Valentina’s hard work. After several years, she began to have health problems - the result, she imagines, of working conditions at the factory, and eventually she took two months sick leave. When she returned to work, she was told that she could now only earn a minimum wage.

“‘We don’t need sick people,’ my manager said. “When I was on sick leave, no one phoned me or offered me any help. They only value people who work. If someone gets ill, they’re no longer a person for them. I was so stressed out, I thought I would die.”

Despite the stress, Valentina got through it and even managed to wangle her back pay from the factory owners – it turned out that her bosses hadn’t paid her properly for the previous six months and owed her more than a month’s wages, which allowed her to “stay afloat” for some time. But after leaving behind the reality of Ukrainian “sweatshops”, she encountered the reality of the Ukrainian labour market, where a 50-year-old woman in less than good health wouldn’t find it easy to find a choice of jobs, especially jobs with decent pay.

It is obvious that despite Ukraine’s export-orientated development and inclusion in the global production chain, its economic indicators are far from brilliant and it lingers in the penultimate position in European countries’ per capita GDP. The reality of this situation for the workers in Ukraine’s clothing factories is sadly reminiscent of the infamous Asian sweatshops. For these workers, this path is a constant search for resources, instability and psychological and physical exhaustion.

But there can hardly be another reality behind low wages - and ignoring this simple conclusion is striking every time cheap labour is presented as the key to Ukraine’s economic development.

All interviews were taken before the start of the global pandemic, and the situation facing garment workers in Ukraine has, expectedly deteriorated with COVID-19. Several women interviewed for the article have been forced to apply for unpaid leave. Others, by comparison, have been compelled to go to work, without being provided protective equipment or transport (public transport in small towns has all but stopped due to the pandemic). During quarantine several garment workers have had to leave their children of primary and middle school age at home alone. Meanwhile, the Ukrainian textile industry is expecting a sharp drop in orders from western brands as the global crisis sets in, and workers will have even fewer options in terms of employment due to local and global economic conditions, the closing of borders and austerity policies for the state budget.

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