Adidas & Co: Pandemic profits at the expense of workers

Adidas is linked to the largest wage theft in the factory sample: the losses inflicted on 30,190 workers across eight Adidas supplier factories since the beginning of the pandemic adds up to US$ 11.7 million, or US$ 387 per worker. While this presents a desperate crisis for the workers and their families, Adidas, on the other hand, generated US$ 650 million in profit in the first quarter of 2021 alone. The sportswear giant could easily afford to ensure that all workers in its supply chain receive their regular wages during the pandemic.

Other brands linked to the largest amounts of wage theft in the sample are VF Corporation (US$ 7.7 m), Target (US$ 7.6 m), Nike (US$ 7.5), and Gap (US$ 6.7 m). In comparison, the ten companies most frequently linked with suppliers in the wage-theft sample had a combined total of more than US$ 4.7 billion in net earnings from the first quarter of 2021 alone.

Excuses and empty promises

Cambodian trade unions are calling on manufacturers and brands to urgently address this wage theft. In February 2021 they wrote a letter to the international fashion brands describing their precarious situation and asking for support. In response, several brands have played down their individual responsibility to ensure proper payment to all workers in their supply chain, often hiding behind international multi-stakeholder initiatives such as the ILO ‘Call to Action’, which have thus far failed to ensure wage payments throughout the pandemic.

Trade union struggles for wage protection achieve first successes

The factory assessment shows notable factory-level differences in wage payments during the recent lockdown. The majority of manufacturers only paid workers their regular wage for the days when factories were in operation, providing only a small payment, or no payment at all, for the lockdown period. Only 12 manufacturers (11% of the sample) ensured that workers’ earnings did not fall below minimum wage when the factories were closed. This reveals the initial successes of trade union struggles to safeguard wages and demonstrates that individual companies can choose to take action to mitigate the financial impact of the crisis on workers.

Cambodian unions join with the Clean Clothes Campaign and more than 220 rights groups, Solidar Suisse one of them, in calling on fashion brands to pay the workers who make their clothes their full wages for the duration of the pandemic, and to make sure workers are never again left penniless if their factory goes bankrupt, by negotiating and signing an enforceable agreement on wages, severance and basic labour rights.

Solidar Suisse has been active in Cambodia for more than four years. In cooperation with the independent textile trade union C.CAWDU and the NGO Central, we train workers in legal issues and negotiation skills so that they can defend themselves.

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