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26 Feb

Posted at 01:10h in

For Immediate Release

February 27, 2023

Contact: Rachel Cohen, GLJ-ILRF: racohen78@gmail.com

 

REPORT: Big Fashion Founding Families, Investors Cash In On Wage Theft 

Asian Unions and Allies Launch Campaign to Stop Nike, Levi’s and VF Corp. From Funneling Stolen Pandemic Wages toward Buybacks that Enriched Owners, Wall Street

Register for the press call on Tuesday, February 28 at 9:00 AM ET / 7:30 PM IST / 9:00 PM ICT: https://us02web.zoom.us/webinar/register/8916767074099/WN_I7-pu3rASn-Bvb1yHxAGVA

 

WASHINGTON – Labor Unions in six countries in South and Southeast Asia are joining forces to demand an end to stock buybacks by US-based Big Fashion companies after years of unpaid wage claims. These unions and their global allies, Asia Floor Wage Alliance (AFWA) and Global Labor Justice-International Labor Rights Forum (GLJ-ILRF), are launching their “Fight the Heist” campaign with a new report that reveals how Nike, VF Corp. and Levi’s and their wealthiest investors are profiting through wage theft from workers in their Asian supply chains.  

The report “Big Fashion Investors Cash In on Wage Theft,” released today, shows that after quickly bouncing back from a brief pandemic slowdown in 2020, Nike, VF Corp. and Levi’s executives and investors have seen their profits skyrocket through stock buybacks and dividends. Meanwhile, the vast majority of garment workers, who lost on average 22% of their normal wages in 2020, have received no payback and remain in permanent crisis, with many factories continuing to steal overtime pay or pay subminimum wages. 

 Share buybacks in other sectors, like the airline and semiconductor industry, have recently come under scrutiny. Senators and members of Congress are proposing legislation to rein in Wall Street’s expansive efforts to reward investors. However, there’s been little notice of Big Fashion’s lavish payments to investors as garment workers struggle to survive.

“At the same time that workers lost wages en masse, Big Fashion made record profits and brands paid themselves millions through stock buybacks. The Nike-owning Knight family, for example, paid themselves $74 million in dividends while garment workers literally could not survive,” said GLJ-ILRF Executive Director Jennifer (JJ) Rosenbaum. “The campaign is demanding that brands negotiate a forward-looking solution to transform their supply chains for workers, pay back the money garment workers lost and end stock buybacks until workers are made whole.”

Nike and Levi’s increased their share buyback programs in 2022. Nike authorized a new $18 billion dollar buyback program ($3 billion more than before), Levi’s approved a $750 million share repurchase program ($650 million more than before). VF Corporation paused and reinstated its existing share buyback program in 2021, and projects spending $7 billion on share repurchases in the next four years.

“At the start of the pandemic, I was furloughed for weeks at a time and lost all my savings,” said Netra, who makes Nike apparel at a factory in Indonesia. “My factory never paid my back wages and I’m struggling to send the money my parents and siblings rely on. Nike should ensure factory owners pay us fairly for the work we’ve done.”

The new report follows up on a 2021 AFWA report, “Money Heist,” that surveyed thousands of workers at the beginning of the pandemic in 189 factories that make clothes for some of the world’s largest brands. The report documented at least $164 million in lost wages as garment producers skirted national laws on worker pay. 

In late 2022, investigators returned to dozens of factories from the first report and found:

  • Nine in ten factories have not resolved workers’ COVID wage claims from 2020.
  • More than half of factories are not paying workers owed overtime, beginning in 2020 onward. 
  • One in five factories are not paying workers minimum wages or owed benefits.  

Taking data collected as representative of a likely overall trend, the total potential COVID wage claims for Nike, Levi’s and North Face parent company VF Corporation in just the six surveyed countries (Bangladesh, Cambodia, India, Indonesia, Pakistan and Sri Lanka) could be as much as $427 million.

“The pandemic was a global shock that has had a severe impact on the health and finances of garment workers,” said AFWA International Coordinator Anannya Bhattacharjee. “The industry looks for every possible opportunity to push its risk and losses onto workers with the fewest options and least bargaining power. But workers are fighting back and linking arms with workers in the US to demand that these companies pay them what they are owed before they make lavish payouts to investors.”

Asian garment unions, AFWA, GLJ-ILRF and other allies are calling on these Big Fashion companies to: 

  • Sit down with garment workers and their unions for a systematic investigation of COVID wage claims, including specific impacts on women workers. 
  • Stop billionaire payouts from dividends and stock buybacks until all garment workers are repaid their lost wages.
  • Transform their global supply chains to provide living wages for all workers.

Unions representing workers at Nike factories today filed an OECD complaint with the US National Contact Point. It alleges that Nike has contributed to “severe human rights impacts” for garment workers in its supply chain but has not addressed and remediated the impacts according to the OECD Guidelines on Responsible Business Conduct. Nike has not responded to unions’ requests for dialogue about these impacts, which the Guidelines call for. 

If the US NCP approves the complaint, the NCP will formally invite Nike to dialogue with the unions about their demands and facilitate a dialogue process.

You can read the full “Big Fashion Investors Cash In on Wage Theft” report here. 

You can read more about the OECD complaint here.

 

Get more info on the campaign on our press call on Tuesday, February 28 at 9:00 AM ET / 7:30 PM IST / 9:00 PM ICT

Zoom registration link: https://us02web.zoom.us/webinar/register/8916767074099/WN_I7-pu3rASn-Bvb1yHxAGVA

 

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Asia Floor Wage Alliance (AFWA) is an Asian labour-led global labour and social alliance across garment producing countries (such as India, Indonesia, Sri Lanka, Cambodia, Bangladesh) and consumer regions (USA and Europe) for addressing poverty level wages, gender-based violence, and freedom of association in global garment production networks. 

Global Labor Justice – International Labor Rights Forum (GLJ – ILRF) is a non-governmental organization that works transnationally to advance policies and laws that protect decent work; to strengthen freedom of association and workers’ ability to advocate for their rights; and to hold corporations accountable for labor rights violations in their supply chains.