Labour in the Clothing Industry in the Asia Pacific

Vicki Crinis, Adrian Vickers

• Publisher: Routledge
• Year: 2016
• Topic: Social Sciences
• eBook ISBN:
  9781317297666
• Subtopic: Ethnic Studies
• Index: Social Sciences

The clothing industry provides employment for 60 million workers worldwide. More than a quarter of these workers are employed in the Asia-Pacific region, where the industry is based on subcontracted production on behalf of international buyers. Rapid movements of manufacturing activity from country to country in search of cost advantages make clothing workers part of a globalizing labour market where they increasingly suffer from job insecurity.

This book presents carefully researched case studies which highlight the ways in which labour is informalized, fragmented and made disposable by the globalization of production. Chapters address issues pertaining to rights and citizenship, and new forms of activism and organization in conjunction and coordination with diverse support groups, consumers, and wider global campaigns. Contributors further examine the role of the nation state, government regulatory bodies, as well as independent monitoring systems such as the International Labour Organization. Although there has been considerable effort directed to understanding how firms operate across multiple countries – in studies of the organization of global production networks, and the implications for complexities of scale, (de)territorialization and state development projects – there has been far less focus on how these processes produce precarious labour and reshape worker consciousness.

Offering new insights into the understanding and support of workers in the global textile and garment industry, this book will be of interest to academics in a variety of disciplines including Asian Studies, sociology, political economy, development, human rights, labour and gender.

1 Introduction

Dis-organizing labour in the clothing industry in the Asia Pacific

Vicki Crinis and Adrian Vickers

The Rana Plaza disaster in Bangladesh in 2013 brought home to an international audience the implications of industrial mobility in the clothing industry. In this event, a substandard building that housed, among others, five clothing factories employing over 3000 workers collapsed, and the lives of hundreds of workers were lost. Estimates put the death toll at between 425 and 1200 (Yardley 2013). These workers died as the result of the operations of an industry that seeks to reduce the margins of labour costs. In addition to low wages and poor working conditions, nowadays contractors also use strategies of transnational mobility. While the reaction in some western countries has been to call for the withdrawal of subcontracted production from Bangladesh, analysts with a better knowledge of conditions in Bangladesh have pointed to the fact that textiles and clothing account for 80 per cent of the country’s exports and contribute significantly to the country’s Gross Domestic Product (GDP). This growth is underpinned by the pricing of local labour more cheaply than any other Asian country (Chakravarty and Luce 2013). More than 90 per cent of garment workers are women, and almost all of them are migrants who work to support families in perhaps distant rural provinces. The imperative to support families binds these workers to exploitative employment and substandard labour conditions that in turn reflect the subordinate position of Bangladeshi firms in the cost-based system of international competition for work contracts (see Ruwanpura and Wrigley 2011) When the core firms that commission production have the knowledge and the market power to extract favourable deals that minimize production costs (Gereffi et al. 2005), local manufacturers meet these demands by threatening workers and extracting concessions from them (Collins 2007: 145). The essays in this collection reveal logics intended to fragment labour, but show that in practice the consequences of the resulting change processes are complicated, uneven and often unpredictable.

The unexpected onset of both the 1997 Asian economic crisis and the 2007–8 trans-Atlantic economic crisis have shown how quickly patterns of world trade can change. This book demonstrates how such changes affect workers by showing how one of the most important industries in the Asia Pacific, the manufacture of clothing, is subject to massive fluctuations in production volume and employment numbers as the global demand for clothing waxes and wanes and the cost relativities of different production locations alter (see Stalker 2000: 35). Because clothing purchases can be deferred when times are hard, this sector is vulnerable to the economic cycle. Yet, the clothing industry provides employment for 60 million workers worldwide. More than a quarter of these workers are employed in the Asia-Pacific region, where the industry is based on subcontracted production on behalf of international buyers. In 2014 to 2015 there were 4.2 million mostly women employed in the clothing industry in Bangladesh; ten million in China; 600,000 in Cambodia; 12 million in India; 102,120 in Malaysia and two million in Vietnam. These figures listed in the formal production sector statistics, do not include the large numbers of informal workers in countries such as in India. It is estimated that in India at least 60 per cent of garment workers are employed in the informal sector. In Australia where the wages are high, large numbers of home-based workers more than double the 40,000 workers employed in the formal sector work as home-based workers.¹ Rapid movements of manufacturing activity from country to country in search of cost advantages make clothing workers part of a globalizing labour market where they increasingly share the experience of job insecurity.

After 2008, as orders from Europe and the United States (US) declined in the wake of the financial crisis, thousands of workers in the Asia Pacific were retrenched as garment companies closed down or moved to locations with cheaper labour costs. It is estimated that 11 million of those jobs never returned.² In China, where city industrial workers do not have residents’ rights (hukou), migrant workers who lost their factory jobs left the cities and returned to their rural areas of origin. In 2008, the United Nations Development Fund for Women found that 700,000 clothing and textile workers in India and 30,000 – mostly female – garment industry workers in Sri Lanka and Cambodia lost their jobs at that time. In such countries, where clothing production is a major contributor to export earnings, these job losses adversely affected their entire national economies (United Nations Development Fund for Women 2010: 155). Sometimes these jobs were replaced by new ones in other locations, employing new groups of vulnerable workers. As Bangladesh has been one of the ‘beneficiaries’ of this movement in attracting garment factories, it suggests that cost minimization has been a major motivation for relocation.

Governments use taxation breaks and other incentives, including the establishment of ‘special economic zones’, to lure investment and entice global firms to establish production facilities. Governments justify the incentives they offer to attract foreign companies – such as tax concessions, infrastructure and discounted water and energy – in terms of the benefits of direct employment creation and the indirect employment created when local contractors take over parts of the production sequence. Global production processes are inherently unstable because each fashion trend requires different types of skills, different inputs and different machinery, which implies selecting the factory most appropriate to the particular production task (Weller 2007). In addition, labour productivity is changeable, with countries that invest in education and training (for example, China) increasing their capacity to absorb a more complex range of production tasks (see Gereffi and Sturgeon 2009). The lowest wage sites are also those where the least complex tasks are carried out (for example, sewing t-shirts). Global core companies are driven by profit-seeking, which is passed down through the production chain via subcontractors, with decisions about where to locate a particular production task based on a combination of labour productivity (that is, output relative to wage costs), quality and skill requirements, although the overall economic environment and infrastructure are also important. Over time, where trust has been established, relationships develop between preferred suppliers. The leading firms in global garment production are not interested in industrial upgrading or improving workers’ rights and conditions – their strategies are better described as being about the informalization and dis-organization of labour (Wills 1998). These terms refer to the ideas of removing labour from processes regulated and scrutinized by government and unions, and also to the idea of disempowering those organizations, largely unions, that have historically supported the collective interests of workers.

It is not surprising, therefore, that the globalization of capital and production systems has generated the parallel globalization of protest and industrial action, but in a new form (Waterman and Wills 2001). In places where union activity is weak or is suppressed by the state – as is the case in a number of Asian locations – voluntary organizations working outside the production system and workplace have become central sites of opposition and mobilization. In the Asia-Pacific region, consumer-based non-governmental organizations (NGOs) have emerged as advocates of workers’ rights. These NGOs have sought to expose the exploitative processes inherent in global commodity chains, showing the links between brand names and the factories that exploit workers, thus opening spaces where consumers become active participants in the chains. Larger coalitions of these organizations, such as the International Labor Rights Forum and the Worker Rights Consortium, have developed connections among labour activists, unions and academics. Although based in the US, the chief consumption end-point for many commodity chains, they build on the accountability-based models developed in human rights activism and use the internet to mobilize their followers in coordinated responses to crises (Collins 2007: 405). As the tactics of consumer-based NGOs infiltrate the logics of mobile capitalism and exploit fashion brands’ vulnerability to adverse publicity, they have created voluntary, firm-based international codes of conduct (Collins 2007: 407–8). We will return to this issue later.

This book documents and analyses these processes of dis-organization, by providing case studies of the different policies, processes and actions that keep labour divided, and hence controlled. Avoiding the strong US bias of other studies,³ this volume focuses on Australia, Bangladesh, Cambodia, China, India, Malaysia and Vietnam, all of which illustrate particular combinations of state management, liberalization and labour regulation and conditions. Each of the case study countries has features that make it distinctive, but also allow us to pursue connections between them, contributing to the larger picture of labour in the clothing industry in the Asia-Pacific region.⁴ The Asia-Pacific region produces over 60 per cent of the world’s garments, with China alone producing nearly one-third of the world’s clothing exports (see Table 1.1).

In 2004, the 30-year clothing regulatory system known as the Multi-Fibre Arrangement (MFA) under the auspices of the General Agreement of Tariffs and Trade (GATT) ended. During the MFA period that Australia was not a signatory, the MFA directed production to locations with quota, which meant that the US Department of Trade decided where production would be.

The MFA was replaced by the World Trade Organization (WTO) Agreement on Textiles and Clothing of 2004, which has permitted the gradual expansion of exports from Asia into the core US and European markets. The dismantling of the MFA’s quota restrictions after 2004 allowed buyer firms to source garments from any supplier, but the realities of production costs and productivity – as well as the proximity to textiles and accessories production sites – have resulted in increasing concentration of production in China (Appelbaum 2008). More recently, Chinese labour costs have increased relative to other Asian locations and the Chinese government has committed to repositioning the Chinese economy towards high value-added, more technologically sophisticated industries. Although this process was interrupted by the 2007 financial crisis, it is likely that China will increasingly become a purchaser of production capacity in other parts of Asia, rather than a direct producer. For core sourcing firms in the US and European Union (EU), the financial crisis altered cost relativities between imports from Asia and from adjacent production centres (in Mexico and East Europe). Agreements like the North Atlantic Free Trade Agreement (NAFTA) are designed to support capital-intensive textile production and have made these sites in the agreement cost-effective for the production of high-value garments made using local cloth. In addition, as Smith et al. (2002) have demonstrated in their work on the Slovakian clothing industry, by sourcing closer to the market, buyers save time and transport costs, and control the quality production of the garments.

Modes of analysis: networks and chains

The cases presented in this book highlight the ways labour is informalized, fragmented and made disposable by the globalization of production. Although there has been a considerable effort directed to understanding how firms operate across multiple countries – in studies of the organization of global production networks, and the implications for complexities of scale, (de)territorialization and state development projects – there has been far less interest in how these processes produce precarious labour and reshape worker consciousness (Cumbers et al. 2008).

Labour relations must be located in production systems. Three related analytical approaches have been used to study the clothing industry’s form of internationalized organization: these approaches focus on global commodity chains (GCCs), global production networks (GPNs) and global value chains (GVCs). Scholar-activists have mobilized these related frameworks to reveal links between producers and consumers in consumer campaigns opposing labour exploitation (O’Rourke 2003; Bair 2005; Rainnie et al. 2011). As their titles suggest, each has a different emphasis.

Table 1.1 Clothing export value of major Asian producers (US$ million)

Source: WTO 2013–15.

The first, GCCs, focuses on the flows of commodities from production sites to end consumers. It developed from world systems theory (Wallerstein 1989), linking the different elements in a dynamic but structured global system through the threads of commodity flows. Research from this perspective has tended to characterize the garment industry as a buyer-driven commodity chain (Gereffi and Korzeniewicz 1995) which relies on multiple tiers of subcontractors but is controlled by a central buyer firm (Gereffi et al. 2005; Donaghu and Barf 1990; Tsing 2009). Accounts from peripheral sites recognize the complexity of the power relationships, the importance of intermediaries and the effects of regulatory and political contexts and territorial divisions.

The second variant, GPNs, more than the commodities, focuses on the forms of industrial organization through which commodities are produced. It therefore focuses on relationships among firms, but it encompasses the state interventions, regulations and labour market conditions which influence firms’ locational and strategic decision-making. GPN analyses have contributed to understanding the erratic changes in production locations as contexts and trading rules change. GPN stretches the commodity chain into a network form by including firms that contribute to the production system but do not handle the commodity (for example, designers and accountants), and contextual factors that reside outside the production system, such as state regulation and labour market issues (Dicken et al. 2001; Henderson et al. 2002; Coe et al. 2008; Smith and Pun 2006; Weller 2006). Henderson et al. (2002) argue for a return to seeing these ‘niches’ as operating in networks that are much more fluid than allowed by the mechanical models of Gereffi and his associates. Such networks create a form of reterritorialization, as they ‘constitute and are reconstituted by the economic, social and political arrangements of the places they inhabit’ (Henderson et al. 2002: 446).

The third variant, GVCs, includes all the sites or ‘nodes’ along a chain of actors that add value to a commodity (Bair 2009). This orientation is better able to focus on the contribution of labour to the final product and assess the relative contribution of different contributors, including (often) women’s low-paid labour (Kelly 2009). The GVC approach gives more emphasis to agency along the chain, rather than at its end-point. Researchers are now using GVCs to question the benefits at each link in the chain, including for labour (Barrientos 2002; Jenkins et al. 2002; Barrientos and Kabeer 2004).

One issue on which these analyses agree is that the ‘vertically disintegrated’ subcontracting arrangements used by global firms deliver ‘value’ and profits to those who orchestrate the chains and networks by producing commodities more cheaply than would be possible in a regulated and unionized workplace ...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Dedication
• Table of Contents
• List of figures
• List of tables
• Notes on contributors
• Acknowledgements
• List of abbreviations
• 1 Introduction: dis-organizing labour in the clothing industry in the Asia Pacific
• 2 The fragmentation of the clothing and textile trade union movement in Malaysia
• 3 Scrutinizing the effectiveness of trade unions in post-socialist Vietnam
• 4 Before Rana Plaza: towards a history of labour organizing in Bangladesh’s garment industry
• 5 Migrant workers in the clothing industry: networking in Christian spaces
• 6 China’s migrant workers and the global financial crisis
• 7 Workers in the Indian export garment industry: surviving neoliberal reforms
• 8 Child labour and gender discrimination in the garment industry of Kong Pisei, Cambodia
• 9 Asian women doing home-based garment manufacturing in Sydney, Australia
• Appendix
• Index