From Myanmar Sweatshops to Billionaires in Switzerland

By Max Lawson 8 March 2016

The young garment factory workers share a tiny room in a wooden shack, spotlessly clean, with pictures of Myanmar pop stars beside a photo of their parents back in the village. But there is no escaping the smell of the open drain outside. The three sisters and their cousin all work in factories making clothes for export to the UK, United States and other countries for household brands such as GAP, Primark, H&M and Tesco. They belong to a labor rights group working with Oxfam to fight for better conditions for workers, and we are there to hear about their experiences on the factory floor. Myanmar’s garment sector is expanding fast, now employing around 300,000 people–90 percent female and mostly under age 25.

Daily average wages of US$2.80 are not enough to survive on. Oxfam’s recent survey found that almost half of garment workers are trapped in debt and have to borrow money to meet basic needs like food, medicine and transport. They work up to 11 hours a day, six days a week, rarely receiving sick pay despite this being a legal requirement. Many reported working into the night to meet impossible production targets, on one occasion sewing until 6.30am before restarting at 7.30am every day for a week. Safety was a big concern, with one in three reporting a workplace injury and many afraid of factory fires because of blocked exits.

In the week we visited Myanmar, Oxfam’s report ‘An Economy for the 1%’ caused a stir at the World Economic Forum in Davos, Switzerland, revealing that 62 billionaires now own the same wealth as the poorest half of the world. The report shows that the global economic system is skewed in favor of the top one percent, who have seen half of the total increase in global wealth in the past 15 years, while the bottom 50 percent have had to make do with just one percent.

Interestingly four of the world’s 62 richest billionaires made their fortunes in high-street fashion. Amancio Ortega of Spain, worth $64 billion, heads garment giant Inditex, owner of Zara. Swede Stefan Persson, worth $24 billion, is chairman of H&M and a 28 percent stakeholder. Tadashi Yanai of Japan owns Uniqlo and is worth $20 billion. The fourth is Phil Knight, who until June 2015 had spent 51 years as chairman of Nike, and is worth $21 billion.

H&M buys from factories in Myanmar and Uniqlo is considering doing so. Inditex pioneered the model of shorter supply chains and reduced lead times, now the norm in fast fashion. But this business practice puts huge pressure on suppliers and their workers, leading to forced overtime and pressure to squeeze wages as low as possible.

H&M does at least publish which factories produce its clothes in Myanmar. Many big brands refuse to even do this. As one of my colleagues put it, ‘Can you think of one good reason why a high street brand would want to hide where its clothes are made?’ Both H&M and Inditex have taken steps to address poverty wages, for instance by signing an agreement with global union IndustriALL to promote sector bargaining. However, between 2001 and 2011 wages for garment workers in most of the top 15 apparel-exporting countries fell in real terms.

Some commentators have accused Oxfam of being anti capitalist for throwing rocks at an economic system than has helped to reduce global poverty. It is of course true that real progress has been made. The young women we met now earn more than the extreme poverty line of $1.90 a day, so are no longer officially counted as poor. But is that really good enough?

Oxfam recognizes the power of capitalism to transform people’s lives – but we believe the current warped ‘market fundamentalist’ model, as the Bank of England Governor calls it, is failing us all. Matthew Paris, a former Conservative MP writing about our Davos report in The Times newspaper, put it best when he said that listening to those trying to defend today’s capitalist system reminded him of Communists trying to defend the USSR: ‘How much longer, then, can we market liberals shrug off huge failures in the working examples we have of capitalism?…If the free market is to be defended in the new century, these inequities are no longer something from which the center-right can turn away.’

Throughout our history, the majority of those who fought to stop children having to go to work, or for a ten hour working day, or for a weekend, or paid holiday, sick pay and above all for wages which allow ordinary women and men to live a decent life were not anti-capitalists.  They just believed we could do better. Activists of the past were dismissed as naive or seditious or both, but what they fought for we now see as being a part of a civilized society.

Today we have to continue that fight. We need to make capitalism work for the majority rather than the top 1 percent. This can be done. For example, a critical mass of companies could commit to source from countries with good labor regulation, adapt their business practices so factories can afford to pay a living wage and ensure workers are free to negotiate with management.

We have the talent, technology and imagination to build a more human economy—one where we have not just minimum wages, but maximum ones too. Where we see an end to this extreme wealth that benefits no one but a tiny elite.

When I met those young women in Myanmar learning about their rights, and the successful struggles of other garment workers in Thailand and Cambodia, I was filled with hope for the future.  For a better, fairer, future they will fight for. I know I want to do all I can to help them.

Max Lawson is Oxfam’s Head of Global Campaigns. This article originally ran on Oxfam’s blog, From Poverty to Power.