We Need a Global Safety Net for Workers

Workers the world over have felt the terrible impact of COVID-19 — on their health, their lives, their livelihood. In the United States, we are rightly concerned about jobs, health insurance and cash payments to see us through to a better day. This includes government assistance — and legal obligations of employers to employees.

If the safety net in the U.S. — a modern, first world nation — is under stress, the social safety net in poor countries is in tatters.

Not our problem, you say? You’re wrong — it is our problem. Millions of workers outside the U.S. work for us — American and European owned and operated companies, largely in textile, apparel, light manufacturing and the hospitality industries. These industries employ either directly or indirectly a global work force to produce goods and provide services for U.S. and European markets at a considerably low wage.

We cannot turn away or walk away. Nor can we abandon our legal or moral obligation to low wage workers who are the backbone of today’s global economy, producing goods and providing services for American and European consumers.

In June the International Labor Organization estimated that the global loss in working hours due to COVID-19 could reach close to 12 percent, or roughly the equivalent of 340 million jobs.[1] Over the prior three months many corporations in the United States and Europe were signing the last paycheck for millions of hourly wage earners who were in turn submitting millions of applications for unemployment benefits — 30 million in the US alone. For most workers in the Global South, where American and European corporations source from, there is no public safety net to fall back on, and most workers will never get that final paycheck.

By the end of March, when the lockdowns in the U.S. and the E.U. were only beginning, in Bangladesh, 1 million garment workers had already lost their jobs as retailers across Europe and the United States canceled orders, triggering factory closures throughout the country.[2] Bangladesh has no statutory unemployment benefits so garment workers had no public safety net to soften the blow of their job loss. Bangladesh does require employers to provide severance and partial wages to furloughed workers, so what really happened to the workers who lost their jobs?

A study by the Center for Global Workers’ Rights in March found that 97% of buyers refused to contribute to the legally mandated worker severance and 75% of buyers refused to pay suppliers for production costs on standing orders, including for the raw materials purchased to fulfill the canceled orders. As a result, 72% of furloughed garment workers were sent home without pay and a full 80% did not receive severance.[3]

The economic and health impact of COVID-19 has been devastating to all low wage workers — those on the assembly line and those piece-rate workers in the fields. These workers are often already only a paycheck away from losing their housing, or a hospital stay away from losing everything. For workers in the informal sector, including caregivers, traders, drivers, domestic workers, and so many others, the situation is even more dire. Though they churn the global economy, these workers are unseen and unprotected. While economists agree that all these workers are key to helping economies sustain and recover, COVID-19 has demonstrated to each and every one of us that protecting their health and livelihoods is not only an economic issue, it is a moral one.

Unfortunately, many of those who produce and market the clothes and shoes we wear do not see this economic and moral obligation as their own.. In Myanmar, where garment workers’ fundamental rights are at best nascent, COVID-19 has rolled back even the little progress made. The slow-down in Myanmar has resulted in a grave loss of livelihoods, a loss that disproportionately affected migrant women. None of these women will receive severance.[4]

Workers in many other industries experienced the same treatment. Uber drivers in their fight to be considered employees had to sue to access unemployment benefits .The hard hit retail and hospitality industry typically do not offer severance to front line employees unless a collective bargaining agreement provides otherwise. With over 250 million workers in hospitality and less than 10 million unionized globally the vast majority of these workers will have no severance and no safety net to protect them and their families. While governments walk away from economic safety nets and the private sector walks away from paying or supporting severance plans, essential workers experience some of the highest COVID-19 infection rates and higher death rates.

Apparently, in the equivocal world of corporate social responsibility, social protections tend to be someone else’s responsibility. The shirking of responsibility is particularly true when it comes to money for severance payments, health insurance, social security contributions, etc. Corporate codes of conduct typically direct the supplier to comply with specific tennents and most, if not all, are written to insulate the corporation from liability.

The result: the responsibility for workers’ financial well being is thrust down the supply chain so that worker protections especially as it pertains to their wages are the factory owners’ — not the brands’ responsibility. For years shoving financial responsibility has been the modus operandi of apparel & footwear brands, electronics manufacturers and countless others who criss-cross the globe in search of the “lowest wage.”

But it does not have to be this way. The burden of doing what is best for workers does not have to be borne by the factory owner or supplier who is economically upended as a result of canceled orders and unreimbursed costs. It should be possible to insulate brands and buyers from liability while taking on some or all of the responsibility for the financial well-being of furloughed workers. Here is an example:

The brick-making sector in South Asia is one of the world’s most irresponsible industries, and many in the international development and human rights community consider brick work one of the ugliest working environments for workers. Across the region brick kilns employ tens of millions of workers, many of them children, for scant wages, with no employee protections, in hazardous conditions.

In Nepal, however, the Global Fairness Initiative(GFI) has partnered with 40 brick suppliers (i.e. kilns) to produce a “Better Brick”. “Better Brick” suppliers must comply with international standards and when they do, “Better Brick” certifies to buyers that the kiln complies with those standards.

When COVID-19 hit Nepal in March and the government shut down schools, shops, and brick kilns, “Better Brick” suppliers furloughed thousands of workers. With construction projects halted everywhere buyers for bricks disappeared, as did funds to pay kiln workers, many of whom were stranded at their job sites as transportation around the country was halted. GFI helped kiln owners with emergency needs such as PPEs and food, but the urgent issue was worker pay. GFI knew it had to do more — and it turned out that kiln owners agreed.

Together, GFI and kiln owners designed a severance plan, one that would cover a percentage of lost pay for all furloughed workers on “Better Brick” kilns. GFI also worked with its donor partner Humanity United to create a fund to which kilns could apply to cover a portion of the cost for 30 days of lost pay for their workers. Designing and funding the severance plan will take time and there will be challenges. But when the plan is implemented thousands of kiln workers will have an income and will be able to feed and care for their children and themselves.

Employer mandated severance and public safety nets are the last line of defense against workers falling deep into poverty in the current economic crises. Mandated severance cannot be ignored by employers, factory owners, multinational companies or governments — all of whom point fingers and blame each other for a failure to protect workers in crises. When these systems fail — or fail to exist — it is the most vulnerable workers who suffer first and greatest.

I’m not naive and understand that brands, producers, and manufacturers were all hit hard by COVID-19. A recent study by The Business of Fashion and McKinsey analyzed the impact COVID-19 is having on the 2.5 trillion dollar fashion (apparel and footwear) industry. The report predicts the apparel and footwear sectors of the global fashion industry could contract upwards of 30% in 2020 with over 1 million jobs loss.[5]

While these losses are real, access to capital markets, debt financing, restructuring, programs like the Paycheck Protection Plan and tax relief are available to most if not all businesses in the U.S. and Europe — businesses that frequently seek low wage workers to produce the products they sell. This economic relief is designed to help the apparel and footwear sector survive COVID-19’s worst impacts. But, none of this economic relief is available to the millions of factory or home workers that are one paycheck from poverty. If COVID-19 has taught us anything it is that we are all in this together and workers’ lives are protected not when we shift responsibility but when we take steps to be responsible.

[1]“ILO Monitor: Covid-19 and the world of work,” June 30, 2020.

[2]“1 Million Bangladeshi Garment Workers Lose Jobs Amid COVID-19 Economic Fallout” by Lauren Frayer. April 3, 2020, NPR.

[3]“Abandoned? The Impact of Covid-19 on Workers and Businesses at the Bottom of Global Garment Supply Chains” by Mark Anner. March 27, 2020, Center for Global Workers’ Rights.

[4]“Better Protection of Myanmar Workers’ Rights Needed Amid COVID-19” by Benjamin Harkins. September 5, 2020, The Irrawaddy.

[5]“The State of Fashion 2020: Coronavirus Update.” April 2020, Business of Fashion and McKinsey & Co.

Karen Tramontano is the Founder of the Global Fairness Initiative (GFI), a non-profit organization working to promote a more equitable, sustainable approach.