Most Lankan apparel workers, their families fell deep into poverty last year: AFWA

„Sri Lankan apparel workers record third highest income losses among the six nations surveyed „India’s apparel sector ranked second in income loss per factory valued at US$ 1.38 mn „96% Sri Lanka’s apparel workers experience employment shocks throughout t

Avast majority of Sri Lanka’s apparel workers and their families fell deep into poverty last year driven by unprecedented job losses, lay-offs and various forms of pay-cuts triggered by COVID19 pandemic, potentially increasing likelihood for inter-generational transmission of poverty, according to a latest survey.

“There was a sharp decline in wages and household income of Sri Lankan garment workers due to the Covid19 crisis, pushing them into severe poverty. Wages continued to remain far below the international poverty line for the rest of the year and did not recover to pre-pandemic levels,” an Asian labour-led global labour and social alliance, Asia Floor Wage Alliance (AFWA) said a latest report titled ‘MONEY HEI$T Covid-19: Wage Theft in Global Garment Supply Chains’ said.

The report aimed to expose key impacts on apparel workers in Sri Lanka, Pakistan, India, Indonesia,

Cambodia and Bangladesh due to the pandemic, with data collected though surveys conducted in each country in collaboration with 23 trade unions.

In 2020, 94 percent of the workers faced income losses through layoff and termination sans legal dues and benefits, underpaid or unpaid overtime; and bonus ‘theft’, with the overall income loss estimated at 23 percent in the year.

Sri Lankan apparel workers recorded the third highest income losses among the six nations along with India and the country’s apparel sector was ranked at second in income loss per factory at a value of US$ 1.38 million.

As a result of income losses, a record 78 percent of the workers were pushed into extreme poverty as their incomes fell below the international poverty line (US$ 3.2 PPP) between March and May of 2020.

“Even though wage theft peaked in April 2020, workers consistently experienced wage theft throughout the year and well into 2021, with no real sign of recovery…. “Brands remain insensitive to the crisis faced by the workers as they continue to pressure suppliers to cut down prices and delay payments to them.

The consequence of these practices again disproportionately falls on workers in the form of wage theft and unsafe working conditions,” the authors of the report outlined.

Although, household income of apparel workers saw a steady rise from May to December last year following the sharp dip in April, the report warned that this was due to younger generation of these households taking up careers abandoning their education and long term career prospects, which could increase inter-generational transmission of poverty.

“This is mainly due to distress-driven employment as young men, aged 17-22 years, in the families of garment workers turned to auto rickshaw driving or took up jobs in the construction or agriculture sector to mitigate the impact of the fall in wages of garment workers who were the main breadwinners.

Most of these young men dropped out of school or college to take up poorly paid insecure forms of employment and this is likely to increase inter-generational transmission of poverty,” it elaborated. Meanwhile, the household debt of apparel workers doubled in this year.

“The average monthly debt of workers increased from US$ 6 in the pre-pandemic period to US$ 17 by the end of 2020. Around 51 percent of the workers borrowed an average of US$ 10 on a monthly basis from April; out of which 60 percent reported that they incurred debt to meet food expenses, and around 25 percent borrowed to pay rent,” the report reads.

The total consumption of apparel workers reduced from US$ 170 during January-february to US$ 151 during May and returned to pre-pandemic levels between October-december last year. ere were, significant dips in consumption of food, healthcare and entertainment in 2020, with workers cutting expenses on these items by an average of 9 percent, 10 percent and 21 percent respectively. Meanwhile, 96 percent of Sri Lanka’s apparel workers experienced employment shocks either in the form of layoffs (76 percent) or termination (20 percent) throughout the year, while 85 percent of the terminated workers were yet to receive their full severance benefits in 2020.

In particular, it was highlighted that manpower workers and trainees who account for as much as 40 percent of workforce in some apparel factories were disproportionately impacted by lack of legal protection for their employments.

“While trainees did not receive any termination benefits, many manpower workers did not receive full legally mandated severance payments. Some factories also engaged in increasing production targets up to 50 percent after the first Covid-19 wave in order to force workers to voluntarily resign,” the report noted.

In 2020, 60 percent of the manpower workers were terminated compared and around 30 percent being laid off without access to compensation or severance benefits in comparison to around 83 percent lay off of the regular workers at some point in 2020 and only around 13 percent terminations who had more access to compensation or severance benefits granted by the law.