- Informal Economy
- News & Events
- Publications & Resources
- Contact Us
The garment industry is one of the oldest and largest export industries. The industry exemplifies the challenges associated with global manufacturing: low wages, "flexible" contracts and sweatshop conditions. Informal garment and textile workers often experience isolation, invisibility and lack of power, especially those who produce from their homes.
In the garment sector, production can be dispersed to many locations across and within countries. In developed countries, this is associated with outsourcing production to developing countries. In developing countries, production moves within and between countries in search of cheaper/faster labour.
One notable shift has been to China, now the “world’s factory” in many sectors, including garments. Another shift, especially for the high-end fashion industry, has been to the periphery of Europe (Albania, Morocco, Turkey) and the USA’s neighbours (Mexico and Central America).
Transnational companies can move their capital across borders in search of cheaper labour. Small enterprises and individual workers do not have this mobility, and must compete in an increasingly insecure and competitive environment.
Power Imbalances and Complex Value Chains
Modern production and distribution of garments has created a “the global assembly line” (Carr, Chen and Tate 2000). Power has shifted from producers to traders and retailers. Buyers set the terms for what is to be produced, by whom, where, when, and at what price (McCormick and Schmitz 2001).
Global production and trade are controlled by relatively few corporations. Large retailers, marketers, and manufacturers set up decentralized production networks through which they order the goods and supply the specifications—often with just a click. Tiered networks of contractors produce the finished products for foreign buyers.
Garment production in poorer countries offers needed investment and employment, but there is a competitive requirement “for poorer countries to offer the cheapest workers and the most flexible (unregulated) conditions” (Delahanty 1999: 4). In Thailand, for example, a rising global demand for cheap, labour-intensive goods spurred regional competition and put pressure on Thailand’s manufacturers to cut labour and production costs. Casualization of employment and subcontracting emerged as a strategy to circumvent labour laws while cutting labour costs (Doane 2007).
Fundamental changes such as the rise of giant discounters (low price, high volume – e.g. Walmart) have also fueled changes. The big retailers can place even greater demands on manufacturers to lower their costs and to produce and ship goods quickly (Bonacich 2000).
Types of Garment Workers
There are important differences between workers depending on whether they are hired by large factories as core or contract workers, hired by small units, or work under subcontracts from their homes. There are also self-employed garment makers who produce for local customers or markets. Learn more:
- Case Studies: Garment Workers Around the Globe
- Case studies - Chains of Production, Ladders of Protection on Garments Workers in Thailand and the Philippines
While some garment and textile workers are employed in factories or workshops, a large proportion are subcontracted homeworkers who carry out paid work for firms/businesses or their intermediaries, typically on a piece-rate basis, within their own homes (Carr, Chen and Tate 2000). Estimates suggest that as much as 60 per cent of garment production, especially of children and women’s clothing, is done at home in both Asia and Latin America (Chen, Sebstad, and O'Connell 1999).
Women represent a significant majority of the homeworkers who cut and stitch garments together for the global apparel trade.
See also the Occupational Group: Home-Based Workers.
Available evidence indicates that the use of contract labour, rather than employees, in the export garment sector is widespread in a number of countries, including Bangladesh, India, Pakistan and Turkey.
According to Chan (2013), it occurs in first tier as well as lower tier factories.
Purchasing practices of global garment brands – a demand for lower prices, shorter lead times, and seasonality – drive the high and increasing reliance on contract labour. Chan indicates suppliers also rely on labour contractors due to:
- poor regulation of labour contractors
- receipt of financial incentives from labour contractors
- increased access to suitable labour
- reduced transaction costs
- ability to restrict worker organization and collective bargaining
Chan, Man-Kwun. 2013. Contract Labour in Global Garment Supply Chains.
In many countries, the garment industry is the largest employer in manufacturing. However, garment workers are often informally employed and home-based─thus invisible and rarely represented in national statistics (Chen, Sebstad, and O'Connell 1999).
In Thailand, the garment industry is the largest export industry, accounting for 60 per cent of total exports (NSO 2012). A survey by the National Statistics Office found that, among subcontracted workers, about half of non-agricultural home-based employment was related to garments and textiles (NSO 2007). Thailand’s Office of Homeworker Protection (OHWP) estimated there were over 950,000 homeworkers in 2005, the majority women. HomeNet Thailand believes the number could be as high as 2 million.
In Bangladesh the garment industry is the principal export earner for that country. In the late 1990s, it employed an estimated 350,000 workers in formal and semi-formal employment, making it the fourth largest employing sector (Bajaj 1999: 19). Although there are no estimates on the number of home-based garment workers, the Bangladesh Home Workers Association (BHWA) believes there are millions of home-based garment workers, as entire rural families are involved in traditional embroidery work (Bajaj 1999: 19).
Garment workers around the world, especially those who do the basic stitching of children’s and women’s garments, are predominantly women. Also, the vast majority of homeworkers are women.
According to statistics in Chen, Sebstad, and O'Connell 1999, women accounted for 87 per cent of homeworkers in Argentina, Germany and Hong Kong, and over 90 per cent in Japan and Mexico.
But often, some of the higher-skilled tasks such as cutting are often done by men. And where products require higher technical skills to produce, women have been squeezed out of garment manufacture by men, who have more opportunity to learn the new skills (Carr, Chen and Tate 2000).
Export factories tend to hire young women before they are married or become pregnant, and let them go once they are.
Many garment factory workers are immigrants or migrants; while once migration was commonly from rural to urban centres, these workers now cross borders in search of employment.
In developed countries, many garment workers – whether working in factories or from their homes – are immigrant women from Asia or Latin America. In Los Angeles, USA, most garment factory workers are from Latin America and (less so) Asia. In Toronto, Canada, most of the garment workers are Chinese immigrant women who worked in small factories before the North America Free Trade Agreement (NAFTA), but now work from their homes.
In developing countries, notably in China, many garment factory workers are migrant women from rural areas.
In 2012, the Informal Economy Monitoring Study, coordinated by WIEGO, examined the grounded realities of informal workers in several categories, including home-based workers. In Bangkok (Thailand), Ahmedabad (India), and Lahore (Pakistan), garment workers were among those who participated in surveys and focus group discussions. IEMS provides insight into the realities home-based garment workers face in those cities.
Reasons Women Choose This Work
Garment production at home is often one of the few options available to poor women. In the IEMS study, women in all three cities noted that it was important to be able to earn income but also be home to carry out other domestic duties.
Home-based workers in Bangkok who participated in the IEMS study were found to be among Bangkok’s least educated workers – substantially less educated than the formal workforce but also with less schooling than other informal workers.
In the IEMS sample in Ahmedabad, garment work was mainly done by Muslim women (95 per cent) who stated social constraint against going out for work was a main reason for working from home.
Contracting in the garment sector relies on “flexible” production, which results in uncertain and often rushed work. Manufacturers underbid each other for orders from the large retailers, who can demand low-cost production and just-in-time delivery and who, aided by bar-code technology, have adopted “lean retailing” to keep inventory as low as possible (McCormick & Schmitz 2001).
Manufacturers reduce risk by giving work orders to their suppliers or contractors only when they need them, and by moving work around in search of the best deal (Bonacich 2000). Suppliers and contractors underbid each other to get work orders, then contract out to their subcontractors when they need them – and so on down the global production chain.
The location of work, the volume and duration of work orders, and length and terms of employment contracts are all “flexible.” The workers who produce garments on this “global assembly line” tend to be recruited under “flexible” contracts: hired during peak seasons and laid off when demand slackens.
Very Low Wages
Most homeworkers in the garment and textile industry are paid by the piece (according to how many items they produce), earn very little, and do not receive overtime pay. Most receive no sick leave or paid vacations.
By hiring homeworkers to do the labour-intensive work of assembling garments and paying them by the piece, these subcontractors keep their wage costs and overhead low, and minimize the risk of loss associated with uncertain orders (Carr, Chen and Tate 2000).
Subcontracted homeworkers have little power over the terms and conditions of their work. In Bangkok, 60 per cent of subcontracted workers in the IEMS study reported that wages were set by the contractor; 51 per cent said they could not bargain.
A study conducted by the Worker Rights Consortium between 2001-2011 across 15 countries found garment workers' wages declined overall. Read more.
IEMS findings on earnings confirmed low incomes:
- In Ahmedabad, the average monthly turnover (gross earnings, before deducting any input costs) for the study’s garment workers was 2,337 rupees (about US$42). They reported working over 23 hours in the week preceding the survey.
- In Bangkok among self-employed garment workers, the average daily turnover was 845 baht (approx. US $28) for a seven-hour day. Subcontracted garment workers, however, worked nine hour days and received just 264 baht (US $9).
- In Lahore, home-based garment workers had an average monthly turnover of 10,525 rupees (about US$110) if they worked in the peripheral areas. However, in central parts of the city where competition is much higher for the work, turnover was much lower at an average of 3,315 rupees (less than US$35) per month. The mean daily working hours for the garment workers were 19 hours/week in the central parts and 16 hours/week in the peripheral areas.
In addition to low piece rates, homeworkers – who have to cover many of the costs of production, including workplace, equipment, and utilities – often are not paid on time, and sometimes must wait months.
Vulnerability to Economic Slowdowns
Home-based garment workers in the IEMS were directly affected by larger economic trends such as the global recession. In Ahmedabad, for example, global recession had a significant and lingering impact on the garment sector. Many garment workers had no work for months and work volumes remained low in 2012. Almost half said work orders had decreased over the last year.
Also, there is evidence to suggest that contract labour prevalence in garment manufacture increased following the global financial crisis in India (both north and south) and possibly in Bangladesh (Chan 2013).
A HomeNet Thailand study in 2002 found that during the economic crisis in the late 1990s, which exacerbated declines in the garment industry in many Asian countries, piece-rate wages and job orders dropped dramatically and payments were delayed while costs rose (HomeNet 2002).
Electricity shortages and load-shedding have had severe effects on the livelihoods of home-based garment workers, especially in Pakistan. A majority of IEMS respondents in Lahore reported that when shortages occur, they cannot work. Reduced production reduces the ability to meet daily food requirements, so they must work harder and longer hours when electricity is available to complete their orders. If they cannot get their orders completed, the intermediary gives work to others instead. Many workers have shifted to manual machines, so that they can work in daylight to complete their work.
In Ahmedabad, too, costly and unreliable electricity caused home-based garment workers to use manual sewing machines, which produce lower-quality products and are more costly to maintain. Users complained of resulting pain in their legs, a need for painkillers and rest, as well as increased noise that disturbs children’s sleep.
For home-based garment workers in the IEMS study, small and inadequate housing was a major problem. A small house hampers productivity as a worker cannot take bulk work orders as she cannot store raw materials. Work is also interrupted by the competing needs of other household activities.
Poor quality housing was also problematic. In all three IEMS cities, women reported that monsoon rains force them to suspend or reduce production. Equipment, raw materials or finished goods get damaged when roofs leak or houses flood.
Transport issues also emerged as significant for homeworkers in the IEMS study. Since the women must travel to obtain raw materials and supply produced goods, increased public transport costs and travel distances impact the viability of their enterprises. Across the IEMS survey sample, transport represents around 30 per cent of total expenditures for a home-based workers’ enterprise. About one quarter of the sample who spend money on transport actually operate at a loss.
The garment workers who rely on public transport in Ahmedabad spend an additional 379 rupees US$7) more per month—a significant sum, given their meagre turnover.
Occupational Health and Safety
Home-based garment works rarely have appropriate protective equipment and may be unaware of safety measures. Health risks in the garment industry include repetitive strain, dust from cloth pieces and, in the case of some dyes, exposure to poisonous chemicals (Laungaramsri 2005). Family members can be equally at risk of exposure due to shared living and working space. Garment workers who participated in the IEMS study in both India and Pakistan said they suffer from backache and eye strain.
Invisibility and Lack of Oversight
Global value-chain analyses often shed little light on the working conditions of garment and textile workers. The major chains and retailers can be unaware of how many homeworkers are actually involved in fulfilling their orders, or may turn a blind eye to the working conditions of this segment of their workforce (Carr et al. 2000).
Starting in 2008, with the Ethical Trade Initiative in the UK, WIEGO engaged in a pilot project with a High Street retailer of fast fashion to analyze the impact of purchasing practices on working conditions in one factory in Turkey. The project involved an analysis of purchasing practices along the supply chain. It found evidence that the fashion and garment industry’s structures drive poor working conditions and cause an increasing informalization of labour. See Global Trade Project: Analysis of Purchasing Practices in the Garment Industry.
For more information on WIEGO’s work in the garment sector, see the Global Trade section on Garment Workers.
Some apparel retailers have voluntarily adopted ethical practices that improve conditions for their workers. This can have a positive effect on the business as well as workers. Read How Voluntary Codes of Conduct can Improve the Situation of Informal Workers.
ILO Home Work Convention (C177)
An international Home Work Convention (C177) was approved by the International Labour Conference in 1996. C177 calls for national policies to promote equality of treatment between homeworkers and other wage earners. It also specifies areas where such equality of treatment should be promoted, including inclusion in labour force statistics. See the full text of C177.
Around the globe, home-based worker organizations have advocated for their national governments to ratify and implement C177. By 2014, only 10 countries had ratified it. Most are European. In 1998, the European Commission adopted a recommendation calling on all European Union governments to ratify the convention in 1998 (McCormick & Schmitz 2001).
Legal Protection in Thailand
Thailand, with support from WIEGO and other partners, campaigned for more than a decade to win legislative protection for homeworkers. Both the Homeworkers Protection Act B.E.2553 and a social protection policy came into force in May 2011. The law mandates fair wages –including equal pay for men and women doing the same job – be paid to workers who complete work at home for an industrial enterprise. Read Winning Legal Rights for Thailand's Homeworkers (WIEGO 2013).
The Kathmandu Declaration
The Kathmandu Declaration addresses the rights of South Asian home-based workers. It was adopted in 2000 by representatives of South Asian Governments, UN agencies, NGOs and trade unions from five countries at a regional conference organized by the Self-Employed Women's Association (SEWA), UNIFEM and WIEGO and supported by the Aga Kahn Foundation Canada.
WIEGO commissioned the research findings on which the Kathmandu Declaration was based.
Limitations of Policies
Having policies in place, however, is only a first step. In the Philippines, for example, the specific rights of homeworkers have been recognized since 1992. However, the existence of progressive labour laws does not guarantee their enforcement, as the passage below shows:
An interview with a manager in a relatively low profile firm in the Philippines that makes both garments and textiles … offered an interesting perspective on law enforcement.
To cut costs, workers are often required to put in extremely long work hours at low pay (for example, five drivers must do the job that normally would take 10 drivers, and they have to work 12, 18 or, on occasion, up to 20 hours straight if necessary to get the job done). This also applies to the young, female garment workers (as well as the male managers and others). It is possible to demand this amount of overtime because, in a situation of widespread poverty and a very thin job market, there are always others who are willing to do this type of work if someone refuses to do so.
Garment workers and other employees in these factories are not unionized, and they do not receive minimum pay. They have no benefits (the manager says that they have too little income to want to contribute to social security).
Garment workers, especially those home-based workers who engage in the lower skilled work of ready-made garment production, have little if any bargaining power. They may deal only through an intermediary and have no contact with the main contractor, and the intermediary may also have little power. Where homework is illegal, its participants are even more vulnerable (McCormick & Schmitz 2001).
Most garment workers are not organized. Given the competitive pressures throughout the chain, manufacturers prefer their suppliers to be anti-union. In export processing zones, garment factories typically do not allow unionization. And evidence suggests union leaders were among the first to be let go in East Asia’s garment industry when the financial crisis hit in the 1990s (Delahanty 1999).
Garment makers need to organize to increase their bargaining power and with it, their security in this globalized trade (Carr, Chen and Tate 2000). Worldwide, there are examples of how organizing is improving the situation for these workers. Despite the challenges in organizing home-based workers, there are a growing number of organizations as well as national and regional networks of such organizations (called HomeNets).
In India, the Self-Employed Women’s Association (SEWA) is the oldest and largest trade union of women in the informal sector, and garment workers have always been a significant part of it. SEWA has worked to organize garment workers, concentrating on higher piece rates and fairer working conditions. In 1986 SEWA negotiated a minimum wage for garment stitching. Through meetings with the Labour Commissioner and staged rallies, they have helped garment workers demand better wages, working conditions, the provision of identity cards and social protection such as child care and health benefits (Chen 2006).
SEWA’s efforts have targeted industrial outworkers, many of whom are Muslim. In addition, SEWA has helped own account workers compete through training and loans for improved equipment that can help them try to compete in the fast-changing local garment market (Chen 2006). This has included loans for improving sewing machines, training at the National Institute of Fashion Technology (NIFT), and installing electricity in the homes of SEWA members (Inclusive Cities n.d.).
Meet a home-based garment worker in Delhi who is a member of SEWA.