Bangladesh: Garment sector collapse could devastate millions of workers

Seven years after the devastating Rana Plaza garment factory collapse shook Bangladesh, the economy and workers are shaken again. On Wednesday, 25 March, Bangladesh announced an unprecedented 50 billion taka (around €500 million) stimulus package to support the country’s ready-made garment industry and other export-oriented sectors to cope with the economic fallout of COVID-19. With global consumption plummeting, the demand for mass consumer products is falling. And while the stimulus package is intended to stabilize workers’ wages, the economic disruption has already outgrown the rescue package. “Earmarking the amount to pay to the workers was a nice thing, but at best, one month’s minimum salary for some 4 million garment workers can be paid with this amount,” says Mustafizur Rahman, a fellow at the Center for Policy Dialogue in Dhaka.

Bangladesh’s garment sector in crisis

More than 1 million Bangladeshi garment workers have already lost their source of income. Garment manufacturers had lost $1.5 billion in orders before the stimulus was even announced. Most workers in Bangladesh’s garment sector are typically unable to save any portion of their earnings. With their sole source of income barred, the consequences will be dire.

The FES Core Labour Standards Plus project analysed the role of Bangladesh’s garment sector in the past and proposed policies that would have allowed workers social protection and decent wages (see <link news linking-trade-and-decent-work-in-global-supply-chains-in-bangladesh _blank>Linking Trade and Decent Work in Global Supply Chains in Bangladesh). Safety nets are critical to mitigate the worst consequences for workers in the coming recession.

Unions safeguard labour rights

Trade unions and worker organizations are uniquely positioned to effectively reach workers with timely guidance and help to negotiate mutually beneficial agreements with employers regarding safety. The IndustriALL Bangladesh Council, for instance, has recommended the following urgent measures:

-  Until the situation is under control, employers should give workers paid leave.

-  Health care and treatment should be ensured.

-  The government should provide cash support to workers.

-  Under the leadership of the Ministry of Labour, a tripartite monitoring task force, including government, employers and unions, should be established. 

Now more than ever, the government of Bangladesh, factory owners and brands should work together with independent workers’ rights organizations and trade unions to get through the crisis and ensure workers some protection.

Women are vulnerable amid this recession

Depending on estimates, between 61 per cent and 80 per cent of the workforce in the garment sector in Bangladesh are women. The sector has been the most important source of formal—even though often precarious—employment, particularly for semi- and low-skilled women. At the same time, the lack of protection for women with long working hours and poor working conditions has impacted women’s health (see <link news feminist-perspectives-on-the-future-of-work-in-bangladesh _blank>Feminist Perspectives on the Future of Work in Bangladesh).

Without any form of social protection, a wave of factory closures leaves women with only few options. They could become domestic helpers with less pay and increased vulnerabilities or be unemployed in a country with virtually no social security net. For women whose workplace was an escape from abusive households, the situation can only worsen as domestic abuse rises.

The region is particularly exposed to the global recession

Bangladesh exemplifies the struggles many export-orientated countries in the region are already experiencing or will experience soon. The short-term consequences will be severe. Asia’s economies will have to deal with broken supply chains and their restructuring. As multinational corporations put reshoring, diversification and renegotiations on their agenda, the workers in the region face an uncertain future. Trade unions and workers’ organizations must use this disruption to demand better working conditions along rebuilt supply chains.