Pandemic, poverty, and power in global exploitation chains

As COVID-19 has spread along Global Value Chains (GVCs) it has not just exposed the fragility of our economic relationships but also the broader social relations of exploitation. The economy is balanced on a knife edge; a short step away from economic ruin and the potential for millions of workers to be thrown into poverty and destitution.

This has come as no surprise. GVCs are predicated on immiseration, the imperative to exploit labour and the creation of a reserve army in crises of overaccumulation. However, just as the horrors of Rana Plaza galvanised support for a rethinking of responsibility along these chains, COVID-19 has a similar potential to open a public conversation and policy agenda towards greater redistribution and a rebalancing of the asymmetry of power in favour of workers.

Business nothing like usual

The impact of COVID-19 on employment, work and ultimately whether food is on the table, has been uneven, unequal, and unremitting. In this pandemic, the idea that we are in the same boat has been proven to be patently false. The majority of us will come away with only a lingering memory of disruption to our normal lives. Others will have lost loved ones, and many, for the foreseeable future, will cling on helplessly with no safe ground in sight. Whilst a few boats may be lifted, others will sink.

Joanne Conaghan rightfully stated in our first special issue on COVID-19 that: “Inequality is neither random nor unfortunate; it is structurally engineered, legally enforced, and politically and ideologically driven”. It is workers in the lowest echelons of GVCs, where the pandemic is most unequally felt, who must endure dangers to their health, prosperity and livelihoods.

As the pandemic hit and the global economy spluttered, companies shirked their responsibilities and contractual duties running to their attorneys to ask: “What does my force majeure clause say and what does it permit?” In Bangladesh, 52 per cent of orders in the garment industry were cancelled immediately and more than a quarter of the 4 million workers who work in this sector were fired or furloughed. In a case of appalling deja vu companies such as Primark, who sourced garments from the Rana Plaza factory, closed their buildings en masse and terminated their workers.

As workers have become increasingly concerned about workplace safety, organising efforts have become imperative. At the same time employers have cracked down on unionisation efforts, often taking advantage of the chaos of the pandemic. Factory owners in Myanmar for example used COVID-19 as a perverse opportunity for anti-union discrimination and to fire unionised workers, destroying organising efforts. One dismissed worker, a local union organiser at the factory, did not regret joining the union, “but for now, I worry about providing for my family and getting food on the table”.

For those who have been kept in work during the crisis the picture is not much better. The surge in orders for PPE resulted in Malaysian medical glove manufacturers resorting to forced overtime to meet demand. The NHS for example recently purchased 88.5 million medical gloves from a factory known to confiscate passports where workers endure working 12 hours per day for up to 30 days without rest and receive wage deductions for speaking out against working conditions.

For those of a more optimistic disposition the decline in air pollution and other environmental benefits are undoubtedly a silver lining to the pandemic. In Indonesia, where palm oil expansion has grinded to a halt, huge swathes of the most diverse and carbon-rich forests on the planet have been saved but the slump has meant palm oil plantations are closing. This is good for orangutans but bad for the livelihoods of over 3 million workers who rely on the industry. Left without wages and often a place to live, the impact of COVID on those in the rural economy will be devastating and long-lasting.

All of these cases are exacerbated by the fact that six out of ten workers in the world make their living in the informal economy and this precarity has left them beyond the reach of labour legislation and beyond the coverage of social protection. In the absence of these protections many of us take for granted, millions of workers risk economic destitution. As the Workers’ Rights Consortium points out, informal, home-based, and migrant workers are especially vulnerable to the economic ravages of the pandemic. ‘Structurally engineered’ precariousness has enabled the (unsustainable) growth of value chains and it is of no coincidence that it is workers who must be the ‘shock-absorbers’ of unchecked global expansion.

Rotten to the core

If there is a bright side to COVID-19 it has hopefully well and truly jettisoned the aspirational, catch-up type, win-win underpinnings of contemporary debates on value chains espoused by international organisations and transnational corporations. Instead of conferring the materiality and usefulness of specific natural resources/industries towards employment creation and poverty reduction, we must look at how employment in value chains is predicated on poverty wages, egregious working conditions and exploitation driven by lead firm value capture strategies. As Jennifer Bair and Marion Werner stress, value chains are “effect and driver of uneven development”. It is hard to argue otherwise in light of COVID-19.

The examples detailed above are meant to be indicative but by no means exhaustive. They demonstrate how the existence and conditions of work are not only an outcome of decisions by international capital but also of the broader capital-labour relationships determining the circumstances of labour’s exploitation. However, away from the well-publicised example of the garment industry it is clear that exploitation is often concealed in these value chains. This is not the case of a few bad apples that can be goaded into a new corporate social responsibility mechanism through consumer pressure. This a rotten system characterised by extreme asymmetries in power, a lack of territorial embeddedness of transnational corporations and ineffective national/international law.

From the perspective of transnational capital what is happening is exactly ‘business as usual’. In outsourcing responsibility, suppliers take the slack, shut their doors, and terminate employment while companies wash their hands of any memory of their previous relationships. This is what value chains were created to do in offering transnational corporations’ access to a global reserve army of labour. The capitalist relations of production may have been thrown into sharp relief by the pandemic, but this relationship of exploitation is irreducible to times of crisis.

A collective response to a collective crisis?

Just as the World Health Organisation (WHO) is coordinating the health response to the crisis, many now look to the WHO’s sister agency, the International Labour Organization (ILO) for leadership on the labour response. The ILO’s political, policy and practical response to labour rights in GVCs has had a dogged history. It has not only been glacially slow to respond but often frozen in place by a dominant employer group, divided governmental factions and weakened worker representatives.

Just two weeks before the WHO declared COVID-19 a pandemic, the ILO failed to agree on any conclusions or any semblance of consensus on the way forward on the issue of decent work in global supply chains. This final meeting, the culmination of 7 years of research papers, policy briefs, technical cooperation projects and multiple discussions across the globe, was a clear disappointment for those involved but more so for those who now look for (and need) leadership in a time of crisis.

It is difficult to avoid platitudes during this period, but quick evidence-based and coordinated responses are the difference between life and death. Just as the ILO was established to deal with the ravages of the first world war and its economic and social impact, in this current crisis its normative mandate and tripartite structure are more relevant than ever. The success or otherwise of the ILO will speak volumes for the continuing relevance of the organisation but more importantly for those in desperate support of a coordinated international response.

A better world is possible?

In the UK, as we step into the streets on a Thursday to ‘clap for our carers’, we are spending more than ever at Amazon to the tune of £27 million an hour whilst the company has failed to provide adequate safety protection and refused paid sick leave. Fast-fashion companies such as Boohoo, ASOS and Pretty Little Things have done quite well out of the crisis as consumers flock to buy jogging pants and cheap ‘boob tubes’ as workers endure 12-hour shifts with no social distancing. These examples are depressing in the context of a discourse that a ‘better world is possible’.

When the Rana Plaza building collapsed just over 7 years ago the international attention and public outrage forced the fashion industry, for a brief moment, to have a period of reflection. Through the signing of the Bangladesh Accord factories are now safer for over 2 million workers. At the same time, in January 2019 in protest at poverty wages, a worker was shot dead, 65 arrested and thousands dismissed and blacklisted. The lessons of the Accord have clearly not been learned, not just in Bangladesh but in other countries. In India, states and companies are taking every opportunity available to drive down wages and erode working conditions, suspending labour laws, firing the starting gun to “a race to the bottom of labour standards”.

In Issue 7 of the Futures of Work I argued that only when we accept the reality and ‘purpose’ of value chains and ‘decommodify’ labour can we begin to identify prospects for rebalancing the asymmetry of power. We should not bundle up value chains with entrepreneurial expansion and the ability to foster international development but instead see value chains as what they are: chains of exploitation.

Now is not the time for political points trading or a retreat into nationalist responses. It is high time that transnational corporations start to fundamentally reform their value chains and prioritise workers’ rights. This will neither be automatic nor inevitable. A coordinated legally binding international response is needed that goes far beyond recent calls to action. Let us not be fooled; it might be unfathomable now that we should (or could) return to ‘business as usual’ upon recovery, but capitalism’s memory of a crisis is always short lived.


Huw Thomas is Lecturer in Work, Employment, Organization and Public Policy at the School of Management, University of Bristol.

Image credit: Danielle MacInnes on Unsplash