The Effect of COVID on the Fashion Industry

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by Maria

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07.14.2021

These are tumultuous times. The coronavirus flattened the entire system in a short period of time, and the garment industry has also taken a big hit in just weeks. The effects of the virus can be felt all along the chain, from brands to factories. And the impact is not mild, especially for a group you don’t hear about in the media: the people who make our clothes. What exactly are the consequences and should we be concerned?

Fashion Weeks and fashion shows are being canceled, retailers are (temporarily) closing their doors and consumers are buying less; the coronavirus is giving brands a hard time.

For clothing brands, the impact of the coronavirus – in addition to concerns about health and contamination – is great. Complete Fashion Weeks and collection presentations were canceled. This is a shame about all the preparations, but at the same time, it is also interesting: designers now suddenly have to think creatively and showcase their products in a different way. For example, Giorgio Armani presented its AW 2020 show in a crowdless runway show via a live stream on its website. And fashion wouldn’t be fashion if the outbreak of the virus didn’t create new hypes. ‘Corona fashion’ is a fact: luxury mouthguards from Chanel and other designer brands that prove you can get through your corona time safely and super fashionably.

Economically, of course, this is the tip of the iceberg. Retailers and physical stores of brands are closing down in droves, in order to get contamination and because people don’t store physically anymore anyway. Webshops also took a big hit (except for some sectors and major players). It’s only logical: people are currently very uncertain about their future and you tend to spend your budget on food rather than luxury products that are not really that vital (and a nice lesson in satisfaction, dear consumers?). Fortunately, habituation is starting to set in and some online orders are being placed again.

As exciting as these times are, the Western world fortunately has large care and financial buffer. We will be fine for the time being. But not for the rest of the chain, you won’t hear of it.

The impact of the coronavirus on factories and garment workers is enormous. And the end is nowhere in sight.

All these developments here create a dangerous domino effect on the other side of the world, where our (fast fashion) clothing is made by people who are already in bad shape. If stores have to temporarily close their doors, retailers will no longer do backorders with brands. And since consumers are also keeping a tight hand on their purses, brands have little income. The brands then cancel their production orders with their suppliers.

In addition, there is a growing shortage of raw materials, because these industries are also becoming increasingly stagnant worldwide. Moreover, in the producing countries, there are also concerns about public health and the spread of the COVID-19 virus. The result: many factories are currently threatening to close (temporarily) or have already closed. And the end is nowhere in sight.

This is a hard blow for garment workers. Because of their low wages, poor conditions, and often no right to a union, a large proportion of them (we are talking about millions of people here) already live below the local poverty line and can barely provide for their basic needs. Moreover, they get paid for the work they have done in a day. No work? No pay. When a factory closes, even temporarily, garment workers often don’t get paid and according to the Clean Clothes Campaign, this is starting to become a bigger and more distressing problem. Especially in countries like Cambodia and Myanmar, where garment workers are currently not paid their salaries.

In Myanmar, workers are supposed to receive severance pay if the factory closure lasts longer than three months. This compensation is half a month’s salary per year of service – in itself a good arrangement. But since Myanmar’s garment industry has only taken off in the past few years, these people are often left with virtually nothing. In Cambodia, tens of thousands of garment workers are likely to lose their jobs if the commodity situation does not improve. Many of them already have financial debts and are now in a position where they cannot pay them off. According to Clean Clothes, many of them have put their family’s land into safekeeping and that is now at risk.

Clean Clothes Campaign: “Fashion brands must take responsibility and pay factory garment workers during forced leave.”

Clean Clothes, therefore, calls on brands to take responsibility. After all, with their rat race to the bottom, they have created an impossible system that exploits people to the point that they have never been able to build a financial cushion. Brands have always used the low wages to make more profit themselves and I agree: it is vital for these people, who are already hanging on the edge of the abyss, that we don’t let them fall into it.

The Clean Clothes website tells us how brands can do this. The overall thrust: workers should be able to stay home until the situation is under control, and brands should make sure they receive their full wages during this time. They are not officially required to do so, but it is – if you think logically – their moral responsibility. They need to make sure that the garment workers who made their profits possible do not have to bear the financial burden of the industry during this pandemic.

The question, of course, is whether that will happen. At a time when everyone is taking financial hits and focusing on their own survival strategies, brands that already have little heart for the chain will not suddenly show a big heart. But if there is one thing I have learned in these times, it is that necessity knows no law. That all kinds of wonderful initiatives arise where you least expect it. And that a radical change is suddenly possible because we suddenly understand what really matters. A great lesson for many. Hopefully also for fast fashion.

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