ISLAMABAD: An overwhelming majority of Pakistani garment workers have suffered wage losses that were actually wage theft by global brands during COVID-19 lockdowns, a recent study shows.
Wage theft — the denial of wages or employee benefits — is endemic in global garment supply chains due to power asymmetry between brands, suppliers, and workers, and was escalated by COVID-19 lockdowns, according to the report by Asia Floor Wage Alliance (AFWA), which interviewed workers from 189 factories in Sri Lanka, Pakistan, India, Indonesia, Cambodia and Bangladesh.
In Pakistan, the garment sector is the country’s second largest employer, accounting for around 8.5 percent of GDP and almost 70 percent of its exports. Despite the pandemic, it continued to grow with garment exports increasing to $15.5 billion in fiscal year 2020-21 from $12.6 billion in 2019-20.
AFWA interviewed 605 workers from 50 garment factories across three districts in Pakistan’s Punjab and Sindh provinces — Faisalabad, Lahore and Karachi — suppliers were left short of cash to pay workers as brands refused to pay for shipments that had already been delivered or canceled orders for which factories had already purchased supplies.
“Garment workers in Pakistan faced some of the highest levels of wage theft in the Asian garment industry during the COVID-19 crisis due to the imposition of provincial COVID-19 lockdowns,” AFWA said in its report, “Money Heist: COVID-19 Wage Theft in Global Garment Supply Chains.”
“All workers in our survey experienced employment shocks either in the form of layoffs (86 percent) or terminations (14 percent),” the report said.
The practice peaked in April during the total lockdown period in March-May 2020.
“Wage theft peaked in April 2020 but workers consistently experienced wage theft throughout the year, and well into 2021,” the report said. “Workers reported an overall wage theft of 29 percent in 2020, with a sharp decline in wages by 61-69 percent during the total lockdown period and 26 percent during the partial lockdown period (June-October 2020).”
It estimated that in the 50 factories surveyed, 244,510 workers were denied $85.08 million as wages due to order cancelations or non-payment for existing orders.
The situation started to improve near the year’s end as pandemic curbs relaxed, production increased, and government support started to reach garment workers.
Aliya Hamza Malik, parliamentary secretary for textile and industries, said the government had approved a Rs1.2 trillion package in March 2020, which had helped mitigate the economic fallout from the COVID-19 outbreak.
“We gave a relief package to the industry to help them pay salaries to their workers and ensure their social security,” Malik told Arab News.
“Workers and laborers are on the top priority of our government and we will keep looking after them,” she said. “The textile sector is one of the best performing industrial sectors in Pakistan as its exports have increased from $12.6 billion last year to $15.5 billion this year.”
According to AFWA, however, around 65 percent of the workers did not receive any social security benefits even during the pre-pandemic period, with the number increasing during April-May to 80 percent.
Ijaz Khokhar, chief coordinator at the Pakistan Readymade Garments Manufacturers and Exporters Association, rejected the AFWA findings, at least in Pakistan’s “formal industrial sector.”
“Our industry employs skilled workers and cannot afford to lay them off in any short-term crisis,” he told Arab News. “We have retained our workers, paid them full salaries and additional benefits and allowances during the COVID-19 lockdowns because they are backbone of the industry.”