When we from the global south meet workers and their representatives from the global north, the first thought that come to our mind: How will they support us in our work given their position of advantage? and to the minds of those from the global north: How do we help our colleagues in the global south? Their working and living conditions are abysmal and we can help them. This notion of inequality has troubled solidarity efforts for years even where there is political commitment. Thus, this has also been translated into the strategies adopted by organisations to extend solidarity. Further, in most cases, the solidarity efforts have been a one-way street with the global south being the receiver.
The global supply chain of the garment industry has been written about at length by many. The discussion has in most cases focused on the miserable conditions of the workers at the production centres which are in the global south, with Bangladesh being the focus, especially following the Rana Plaza incident. However, the condition of workers all along the supply chain is as miserable if we assess the conditions relative to other workers in their country and not in absolute terms. The workers, in the stores of brands such as H&M, Zara, Primark, GAP, etc, who sell the garments that are produced in the global south is as precarious as those who produce these. Most jobs are not permanent, with very little social security, no guaranteed hours of work, low wages, harassment at work and most importantly, with limited union rights and very little bargaining capacity. There is no reason or indication to believe that the condition of the workers in between the two ends of the chain would be any better.
Buyer-driven Global Value Chain
Garments is a “buyer-driven” global value chain unlike a producer-driven one, where profits come from scale, volume and technological advances. In the global garment value chain, profits come from combinations of research, design, marketing, and financial services that allow retailers, designers and marketers to act as a strategic link between factories in the global south with their main consumer markets in the global north (Gereffi & Memedovic, 2003). The corporates that develop and sell brands thus have considerable control over how, when, and where manufacturing will take place, and how much profit accrues at each stage (Fernandez-Stark, Frederick and Gereffi, 2011). The main aim of the supply chain is to maximize and concentrate profit.
As the above figure will show if we divide the value along the supply chain, 99% of it is appropriated as profit share, with the retailer taking 50% of the total value, the brand taking another 25%. In cases where the brands are retailers themselves as H&M, Zara, Primark, GAP, etc, 75% of the total value is appropriated by them as profit. 13% of the total value is appropriated by the manufacturers, usually in the global south and 11% by transporters etc. The remaining 1% of the total value is the wage share. The inequality in profit sharing between the global north and south is also evident in this figure. 75% of the total value goes to the global north and 13% remains with the global south. This value extraction by the brands/ retailers in the global north is made from every level of the supply chain, starting with the production to the process of selling it. Thus this appropriation affects workers both in the production process and those engaged in selling these. This thereby makes it essential for workers and their organisations along the supply chain to build united struggles in order to expand the wage share.
Can we increase the share of wages without increasing price?
Campaigns in the past and present have always focused on the misery of workers in the production of garments and hence have appealed to consumers, workers and non-workers, to not perpetuate this exploitation of garment workers in the supply chain and therefore to buy responsibly. Responsible buying has meant the expression of willingness of consumers to pay more for the same garment. This unfortunately, even if well-meant, cannot translate to changing the conditions at work either for those producing the garments or those selling these. This usually means an increase in the size of the cake, i.e. the value created, for the brands to make larger profits and at best may increase the wage share marginally. But, this never can alter the nature of the distribution of the profit as it does not even aim to change it. Thus, price increase cannot be a solution, given the extreme inequality of control over profit distribution along the supply chain. Neither wage nor conditions of work can change without changing this inequality.
Can Auditing and CSR change this?
Not possible. The reason is very simple. Audit is commissioned by the brands/ retailers, paid by them, and controlled by them. The audits are useful tools to fool consumers and make them feel less guilty about buying the products and often more willing to pay more. Thus audits legitimise the existing practices and help increase ‘brand value’ and hence higher profits. The same holds true for all CSR initiatives.
Further, audits inherently incorporate conflict of interest with the audit being paid for by the company commissioning it. There is no reason to believe that in a capitalist society, a company will invest its resources in an exercise that will not generate more profits. It would be eliminated as ‘waste’ if it did not generate higher profits.
Shopfloor Unions as Negotiating agents
To change this, new strategies must evolve that aim to change the inequity along the supply chain.
Wage share can change. Conditions of work can change. It can change by changing relations of control. And relations of control can change by building union power at every level along the supply chain. Unions can increase the wage share through struggle.
Will this increase cost of production and lead to production relocation?
Possible, but not necessarily true. Sourcing decisions of brands/ retailers are not merely decided by labour cost. It is more often decided through a detailed analysis of advantages, including of skills of workers, technological investment. This is clear from brand decisions to continue to produce in Bangalore with a higher minimum wage and not shift to Chennai with a lower minimum wage. Also internationally, this is evident from the decision of brands to continue to source from China and not shift to Bangladesh despite significant increase in the wage gap between China and Bangladesh.
How will shopfloor unions reach Retailers/ brands?
The understanding of solidarity that has existed within the trade union movement also needs to change.
Solidarity has to be a two-way street with garment workers in the global south standing up for the retail workers in the global north and the reverse.
As sourcing practice of brands determine the conditions of work and wages along the supply chain, it is critical to build negotiation strategies to change these practices. These negotiation strategies need to be coordinated along the supply chain. New links need to be built to connect workers. And these strategies need to be rooted in the workers where the change should happen.
The union and organisations/ platforms in the global north supporting unions in the global south have often replaced them as bargaining agents and negotiated for them. This has created a relation of unequal power between the unions in the north and in the south and in many cases even undermined the unions in the south. This too needs to change.
ExChains Network of Garment and Retail workers
The ExChains network is one initiative to bridge this gap and build solidarity both among garment workers and their unions in South Asia and with retail workers and their works councils and union in Germany.
In a series of meetings with Works Councils and with Ver.di, the union of the retail workers in Germany, the leadership of garment workers’ unions in India and Bangladesh developed a joint charter of demands for negotiation with the managements of H&M and Primark. This was the first concrete step towards building joint strategies of negotiation and organizing. The network aims to build a strategy of mutual support and solidarity along the supply chain based on shop floor actions and negotiations. This encompasses common demands, cross-border learning about organizing strategies as well as joint activities to support struggles of each other.