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The Implications of Boycotting Fashion Brands for Garment Workers in Developing Countries
The Implications of Boycotting Fashion Brands for Garment Workers in Developing Countries
Katharina Wilde
Word Count: 4357
Word Count: 4357
Abstract
The fashion industry has faced a change in consumer dynamics, prompting the rapid growth of the fast-fashion industry. To maintain low prices, fast-fashion relies on outsourcing its production to less developed countries at a high ethical price for the workers. In response, many consumers worldwide have started to demand for improved working conditions for the garment workers, often by calling for boycotts of fast-fashion retailers. Much attention has been paid to how consumer dynamics and boycotts interact, yet little has been said about the effects of boycotts on the workers in developing countries. Hence, this essay explores this issue by analysing the implications of a boycott scenario in Bangladesh, a prime example of a developing country that is heavily reliant on the fast-fashion sector. This paper argues that a boycott is not a feasible method due to its adverse effects. Instead, supporting on-site NGOs and similar campaigns may be a better option to achieve improved working conditions.
To sustain the low-cost production/high-profit strategy, fast-fashion retailers have increasingly outsourced their production, usually to less developed countries, due to the abundance of cheap labour (Ross, 2004). Unsurprisingly, this comes at a high ethical price. Frequently, the production factories are unsafe environments fuelled by abuse of the workers and hazardous working conditions of a general exploitative nature (Ross, 2004). Over the past two decades, scandals, such as GAP’s child labour case (see Teather, 2004), or incidents such as the fire of a garment factory in Karachi, Pakistan, which caused the deaths of over 300 workers (see ur-Rehman et al., 2012) have increasingly gained consumers’ attention and prompted a global demand for change (Gordon & Gordon, 2005). One recurring method to accomplish such change is to boycott fast-fashion retailers (Joy et al., 2012) in an attempt to punish unacceptable behaviour of the target and pressure for change (Braunsberger & Buckler, 2011). In the case of fast-fashion, the common motivation is to voice displeasure and force a company, amongst other things, to change its exploitative production practices (Hiquet et al., 2018). Regarding the notion of boycotts, the academic debate seems to primarily focus on explaining boycott behaviour of the actors (usually the consumers) (see, for instance, Hiquet et al., 2018; Klein et al., 2004; Shaw & Tomolillo, 2004) instead of the effects boycotts may have on the target, in this case, a company or its workers in less developed countries. Hence, this essay will question the effect of boycotts by shining a light on its potential impact on the developing countries which are home to the factories and workers catering to fast-fashion retailers.
This paper will assess the implications of a boycott scenario for the factory workers and developing countries in general. In order to do so, this essay will focus on a specific case, namely Bangladesh, as the country is a prime example of many developing countries whose industry heavily relies on the fast-fashion sector and garment production. Drawing upon this analysis, a claim may be made about the effect of fast-fashion boycotts and what other potential remedies could be sought out.
A Theoretical Analysis of Bangladesh’s Readymade Garment Industry
Bangladesh has long been considered one of the least developed countries in the world, as measured by gross national income (GNI) per capita. According to the latest available data, Bangladesh has a GNI per capita of $2,010 (The World Bank, 2021a). As such, it is a part of the “lower-middle income economies” that include all countries with a GNI per capita between $1,046 to $4,095 (The World Bank, 2021b). In the latest available global comparison, Bangladesh ranks 151 out of 194 in terms of its development (The World Bank, 2019). Notwithstandingly, Bangladesh is one of the developing countries that have managed to improve their economic stance over the years, as the country is recommended to graduate this year from the official “list of least developed countries” (United Nations Economic and Social Council, 2021) – in this case, primarily by catering to the fast-fashion phenomenon through the expansion into the so-called readymade garment industry, hereafter referred to as RMG industry (United Nations Department for Economic and Social Affairs, 2020).
Analytical Ambiguities
Before turning towards the analysis, it is necessary to address the two main obstacles that aggravate a precise analysis. First, while often used interchangeably, the Bangladeshi government differentiates between the textile and RMG industry (see the official Bangladesh Statistics report published by the Bangladesh Bureau of Statistics in 2019). Thus, for a clear-cut analysis, it is crucial to continue this separation to avoid further confusion. The principal disparity is that the RMG industry solely entails the mass-production and distribution of complete pieces of clothing (garments) (TIS, n.d.). In contrast, the textile industry refers to the production and distribution of pure fabrics (TIS, n.d.). For this paper, the industrial sector of relevance will be RMG, as it supplies to fast-fashion brands.
Secondly, it must be cautioned that numbers and statistics can potentially vary between sources. Reasons for this can be manifold and can include, amongst other factors, a low literacy rate or lack of awareness and education as well as insufficient institutional resources (Elahi, 2008). Additionally, statistical variation may also stem from the definitional confusion described above. Anyhow, this is a separate topic in itself and shall not be part of this analysis. Nevertheless, in order to maintain the validity of the claims made in this essay, it is necessary to bear this consideration in mind when researching official statistics related to Bangladesh’s industry. Yet, this fact shall not take away from the prime argument of this paper as the general findings remain largely verified.
The RMG Industry – Economic Impact
With its independence from Pakistan in 1971, Bangladesh’s economy had to be rebuilt as a new independent entity. In the late 1970s, the newly-formed country only counted a negligible nine RMG factories spread over the country, concentrating on the domestic market with little to no exports (Asif, 2017). Over the years, the industry has seen an immense growth as the number of officially registered factories has risen to over 4500 (Bangladesh Garment Manufacturers and Exporters Association [BGMEA], 2020). With these factories, the RMG sector is the largest industry in Bangladesh, accounting for 83% of its total export earnings (BGMEA, 2020) and 12.36% of the country’s total GDP in the fiscal year of 2016-2017 (Chowdhury et al., 2019). As published in the official statements by the BGMEA (2020), Bangladesh’s RMG exports “more than doubled, from $14.6 billion in 2011 to $33.1 billion in 2019”, with an annual growth rate of 7% (Berg et al., 2021, “From Tragedy to Transformation” section). In sum, this showcases the sector’s strong potential and overall significance for the country’s economy.
Furthermore, following Muhammad’s (2011) caculations, the RMG sector alone has created employment for over 3.5 million Bangladeshis, of which more than 80% are women with minimal to no education. Bangladesh’s RMG industry has always had the lowest wages and labour cost compared to all other RMG producing countries, which caused the attraction of the large share of foreign interest. Following several strikes and protests in 2018, the legal minimum wage of garment workers was increased to Tk 8000 (US$ 94.33) per month as reported by Human Rights Watch (2019), which equals more or less US$ 3.1 a day. For reference, the average monthly income of a working person in Bangladesh is, according to the World Bank (2019), estimated to be around Tk 13,120.14 or US$ 154.65. Considering this notable monetary gap, it could be argued that while the RMG industry created millions of jobs, these were below-average income jobs, showcasing the prevalence of cheap labour in the RMG sector.
As with any industry, the different sectors in one way or another intertwine and intersect. Focusing on the RMG sector, its growth also positively impacted other sectors through generating profits and increasing general employment throughout Bangladesh (Bhattacharya et al., 2002). Following the authors’ report, amongst the sectors that have been impacted the strongest are the financial and insurance sectors, whose robust growth is usually attributed to the RMG sector. Comparable effects apply to various other sectors, including the engineering sector, real estate and its development, the ICT sector, utility services, waste recycling and tourism. Furthermore, the intense growth prompted an extension of Bangladesh’s port facilities, which was necessary to serve the industry’s international significance, as 40% of the port’s total earnings can be attributed to the RMG sector. Similar effects were observed with increased inland transport services. By occupying such a significant position within Bangladesh’s economy, it may not be surprising that the RMG sector is also responsible for millions of US Dollars that have flowed into the Government Exchequer and into the hands of professional services, such as business consultants or legal agencies, further fuelling the country’s business sector (Bhattacharya et al., 2002).
All in all, the potential and significance of the RMG sector is not solely but certainly to a high degree responsible for the economic development of Bangladesh.
The RMG Industry – Societal Impact
Similar to the economic impacts, the growth of the RMG sector has also had tremendous social impacts in Bangladesh. Although many are to be positively interpreted, some issues have also arisen around the RMG sector. However, it may be debatable whether these issues are attributable to the RMG sector itself or rather to the official handling of the sector by governments and foreign retailers.
On the positive side, first and foremost, the RMG sector granted employment to millions of workers, giving them a chance to improve their social conditions and security. To be precise, having a stable income allows workers to have savings (Loayza et al., 2000), which are beneficial to the individuals and their families as they provide small-scale financial security, reducing not only economic but also societal vulnerability (Altmann, 2003).
Furthermore, as the employees in the RMG factories are predominantly women, the industry has generated access to a monetary income for many uneducated or lesser-educated women. Numerous studies, as assessed by Zohir (2001), have concluded that having a source of income is recognised as a means to gain more independence from the family, thus reducing female vulnerability. At the same time, according to Bhattacharya et al. (2002), increasing female labour that is not confined to household-related tasks draws attention to the needs and specificities of working women. Based on the aforementioned factors, one could argue that the industry is a tool of empowerment by providing employment to millions of Bangladeshi women. Despite that, the dominance of women can also be criticised as it (1) may perpetuate gender stereotypes in terms of work tasks and (2) leaves an abundance of women with a considerably lower-than-average income.
Another positive effect of the massive employment of women is the observation that working women are more aware of family planning due to newfound sources of financial security (Bhattacharya et al., 2002), which reduces the perceived need for a large family or early marriage as a source of financial insurance (Fischer, 2010). Lower fertility rates are by no means the solution to improve Bangladesh’s state of development. However, higher fertility rates do affect the pace of economic growth in developing countries due to the scantiness of many vital resources, such as water access or employment opportunities (Livi-Bacci, 2017).
Following the earlier mentioned public concern about the exploitative working conditions, the Bangladeshi government pledged on various occasions to improve these conditions by implementing policies and regulations in favour of the garment workers. Indeed, officially, Bangladesh has a broad legal framework set up to ensure the workers’ rights (Islam & Rakib, 2019). One policy the country particularly prides itself on is one of many child labour elimination programmes by the International Labour Organisation (ILO). Implemented in 1995, the programme aimed to gradually reduce child labour in the Bangladeshi garment factories by giving decruited former child workers monthly stipends and placements in local schools (Rahman et al., 2018). However, policies and laws of such nature are to be viewed critically, as, despite their existence and implementation, they do not automatically eliminate such issues. We see recurring incidents of violations of workers’ rights, specifically in the garment industry. One such incident occurred in 2019 after workers protested and demanded higher wages. Human Rights Watch (2019) reported that after the strikes, thousands of workers were dismissed without further notice and blacklisted at other factories. Dozens of people were arrested, and protestors were shot at (officially only with rubber bullets) by the police, which caused the death of one of the workers. Other personal accounts of ongoing exploitative conditions can, for instance, be found in an interview-based study by Akhter, Rutherford, and Chu (2019). In regards to the programme to reduce child labour, while it was introduced in 1995, an investigation by the Overseas Development Institute found that child workers as young as eleven years old are still a common occurrence and make up roughly 15% of the workforce in the RMG sector (Quattri & Watkins, 2019, p. 51). This shows again that we need to be aware that “official” numbers or statements may not be taken for granted without critical consideration, as reality may showcase a different picture.
In terms of the overall societal impact, it can be concluded that while the employment of workers by the RMG sector did have a considerably positive impact, especially on women, any official improvement has to be critically assessed. There are still wide-ranging issues within the industry, especially concerning workers’ rights and general working conditions. However, it is arguable whether these are issues caused by the RMG industry itself or those deciding over the industry.
A Practical Case in Bangladesh: The Boycott Scenario
Having assessed the RMG industry and its strong economic as well as societal significance in Bangladesh, the following will delve into a possible boycott scenario and its implications.
The success, or in other words, the achievement of change for the factory workers, of any type of boycott is, amongst other factors, primarily dependent on the commitment of a large enough group of persons (Delacote, 2009). Granted, one individual deciding to refuse to buy from one fast-fashion retailer will likely not drive the latter into bankruptcy. However, boycotts are not impossible and can, by all means, achieve at least some sort of outcome. One successful example was the shutdown of Ivanka Trump’s fashion line in 2018 after facing a broad boycott movement for over two years. As the customers refused to buy the clothes, big retailers decided to drop the brand, leaving Ivanka Trump no choice but to close her label (Hanbury, 2018). While seemingly successful, there are two main points to consider in this case. First, the boycott did not lead to any improvements for the garment workers in Bangladesh, Vietnam and Ethiopia. Instead, it led to Ivanka Trump simply closing her label and, herewith, reducing or even stopping the garment production. One could speculate that this, in turn, placed a potential risk on the garment workers' employment. Second, similar to many other successful boycotts, this one did not target large fast-fashion retailers. The fact that this successful boycott neither led to improved working conditions for the garment workers nor targeted a fast-fashion giant, but instead potentially risked the workers’ jobs, raises the question of whether a boycott could even have the potential to make a difference in terms of economic and societal issues related to the fast-fashion realm. After all, fast fashion’s primary strength is its immense size and importance in the global economy, as ranked by the McKinsey Global Fashion Index (2019).
In any case, the calls for boycotts of retailers such as Zara or H&M are not declining. Thus, taking a step further from Ivanka Trump’s fashion line and assuming a boycott against a fast-fashion giant was successful, what would happen to a country like Bangladesh?
First and foremost, if a large enough group of people stopped buying from a retailer, the overall demand for their garments would decline. A possible reaction to such dynamics could be observed during the ongoing Covid-19 crisis. Due to closed shops, declined consumer confidence and other factors, the demand, especially for fast-fashion, declined rapidly, which led to retailers cancelling their orders (Batha & Karim, 2020). Due to a lack of work and payment, many garment factories had to close, and thousands of workers went unpaid or at least underpaid (Batha & Karim, 2020). In Bangladesh alone, it was estimated that around US$ 500 million in wages were lost or withheld (Batha & Karim, 2020). As observed, facing a decline of the largest sector of the industry scarred Bangladesh’s entire economy, which was fuelled by the industry’s interconnectedness (Amit, 2020). This is especially detrimental given the country’s position as one of the least developed in the world, which depends even more than other countries on ongoing economic growth. For the concerned workers, the situation is equally harmful, given that the majority either lost their job entirely due to factory closings or continued working underpaid or even unpaid. One preeminent benefit of the mass employment of the RMG sector was that it guaranteed a usually steady flow of income which helped many, specifically women, gain more (financial) independence. Losing the only source of income revises this trend, which drives workers back or even deeper into poverty.
Certainly, boycotting one retailer may not result in the same crisis that Bangladesh’s economy is facing now. Notwithstandingly, the current effects of Covid-19 clearly illustrate that a subsiding decline of demand by customers of big fast-fashion retailers can – if large enough – have adverse effects on the workers in terms of loss of employment and the resulting lack of financial security, and on the economy at large due to (1) a decrease in purchasing power of the millions of factory workers and (2) the decrease of the RMG industry and the other connected sectors. Both lead to a decrease or at least a recession of economic growth. It is predominantly harmful to boycott a source of income many depend on, especially if those depending on it are already facing more severe circumstances due to their country’s state of development. Activist and former child worker in Bangladesh’s garment factories Kalpoona Akter (2013) summarised in her words: “a boycott is suicide for my country.”
Potential Alternatives for Boycott
Proponents of boycotting fast-fashion retailers see this strategy as a way to achieve safer working conditions and higher wages for the factory workers in the RMG industry. However, given that boycotts of fast-fashion retailers are primarily harmful for the workers, what might be some other solutions?
Research by Pines and Meyer (2005) found that the most effective way to achieve change is having governments take action, for example, by enforcing regulations through new legislation. Applied to this case, if governments created laws to protect the workers and their rights with strict regulations, companies would be legally bound to adapt, which would significantly improve the situation. However, as mentioned before in the case of Bangladesh, the country does have a legal framework set up to guarantee workers’ rights. Yet again, that does not mean that in reality, these laws are implemented and monitored everywhere. Turning towards governments alone to change the circumstances may not be most effective in developing countries for two reasons. First of all, Bangladesh, as well as many other developing countries, are highly dependent on the RMG sector and its foreign customers. If the government suddenly turned over the entire sector by forcing brands to improve the labour situation, labour cost would simultaneously increase, making the production in that country unattractive to fast-fashion retailers, who would then try to find alternative production locations. This would, in turn, negatively affect the country’s economic growth. Thus, one could question whether governments would even be willing to take such action. Secondly, close monitoring of the adherence to regulations initiated by the government is not always possible or can be subject to manipulation, as private monitoring of state-initiatives has turned into an entire competitive business in itself (European Center for Constitutional and Human Rights [ECCHR], 2016). Hence even if the government would formally impose changes, it is risky to believe that those changes will also be effectively implemented.
Considering this, the most effective way to achieve change for the garment workers seems to be holding each company responsible. One often successful way to do so is by supporting specialised workers’ rights organisations such as the Clean Clothes Campaign.
The Clean Clothes Campaign is an alliance of NGOs and labour unions which organises international campaigns pressuring retailers and manufacturers to take responsibility and improve their conditions in favour of the garment workers. This is done by offering guidance throughout this process, providing all actors choices and possible ways to change (Clean Clothes Campaign, n.d.). Past successes include the realisation of the Accord on Fire and Building Safety after the collapse of the Rana Plaza garment factory in Bangladesh. The legally binding agreement established the building of safer factories and working conditions through “strengthen[ing] occupational safety and health, labour inspection services, skills training and rehabilitation services in the long term” (ILO, 2017, “The Bridging Solution” section). Furthermore, the Clean Clothes Campaign ensured the accountability of involved retailers and achieved compensation for the workers and their families (Clean Clothes Campaign, n.d.; Lucchetti, 2015; Rahman & Yadlapalli, 2021).
The Clean Clothes Campaign is only one example of many NGOs that are on-site and actively involved. There are numerous factors at play that define the work of these organisations, and certainly, NGOs may also be prone to negative influences that affect their work. However, based on past successes like those of the Clean Clothes Campaign, NGOs prove to possess several characteristics that may be advantageous. First and foremost, it was mentioned before that governments often lack willingness and effort to take action. NGOs, on the other hand, are independent of governments and therefore do not rely on the governments’ willingness to act but instead can act more efficiently (Brinkerhoff et al., 2007). On the same note, they often have an incentive for result-oriented work and maintain a strong relationship with the people they work with, to maintain their own legitimacy (Wit & Berner, 2009). Further and perhaps unsurprisingly, the abundance of NGOs that have been founded over the years have led to a certain level of competition over funding, which one could argue also acts as a control mechanism as poor behaviour can easily be exposed by competitors (Aldashev & Verdier, 2009). Lastly, especially NGOs that are on-site may have an advantage over governments, as they are actually involved with the people they work with and can communicate with them (Brinkerhoff et al., 2007). Only through close consultations and communication can effective programs evolve and actions be taken (Brinkerhoff et al., 2007). There are undoubtedly other advantages and disadvantages to the work of NGOs, but it can perhaps be argued that their work is crucial and has led to much improvement over the past. They are an important addition to governments and may even prove to be a more reliable actor as they utilise the combined efforts of multiple actors dedicating their work to the industry, ideally acting as an ally to achieve change without risking garment workers to be held responsible and consequently suffer.