Four Months On and Business as Usual During COVID-19

by Daniela Ortega
1 month ago

The COVID-19 pandemic has rippled across the patterned fabric of life in ways big and small. Global supply chains have been disrupted, and daily cycles of work and leisure have been challenged. At the onset of the crisis in March, MFO and SANEM, along with the rest of the world, wondered how the garment workers of Bangladesh would fare if their factories closed because ready-made apparel orders dried up. We wondered what crowded factories would lead to if orders kept coming. We were prepared for the worst kind of economic and health crises.

However, the data we are collecting from garment workers are telling a different story. For now at least, we are being told that garment workers are back in full force at their factories; that traditional Eid practices such as bonus payments are being honored; that workers are increasingly less likely to have been forced to forego a meal due to lack of money; and that illness levels are dropping. We aren’t sure what the implications are of this quick return to normalcy, or just how the about-face from March happened so quickly. It might mean that the health of garment workers has been put at risk in order to keep factories staffed and brands afloat. Only time will tell. For now, here is how garment workers in Bangladesh have lived, worked and transacted in the first four months of the 2020 global pandemic, from April through July.

Employment

  • In July 89% of garment workers reported they worked some time during that month. This is the same proportion as reported in June, and continues the increasing employment trend seen since May.

  • The proportion of workers who did not work in July and reported this as being due to a factory closure was just 5%, down from 24% in June

  • Median work hours per month increased slightly to 255 in July from 248 in June

  • The majority of respondents, 84%, lived exclusively in the city in July as opposed to living in the village or going back and forth between city and village. This is a slight decrease from June during which 93% of respondents lived exclusively in the city.

Getting Paid

  • In July, 89% of garment workers reported that they received a wage payment, a proportion which has held very steady since April

    • In addition to their regular payment for work performed the previous month, 62% of respondents received either a full or partial salary payment for their July work, in July in anticipation of the Eid al-Adha holiday. These wages received in advance in July led to less loans needing to be taken out. See the “Financial Transactions” section below for more detail.

  • In July 72% of workers received their pay digitally, a slight decrease from 77% in June. However, this decrease is due to some respondents receiving a mix of digital and cash payments.

  • The median pay for July of Tk. 14,000 is both higher than usual and higher than June’s median pay of Tk. 9,410. However, this higher median pay is due to most garment workers receiving either a full or partial salary payment in July for work performed in July.

    • Women continued to earn less money than men, as they have every month since April. In July the median pay for women was Tk. 13,500 compared to Tk. 15,400 for men.

Food Security

  • It became increasingly less likely in July for respondents to forego a meal due to lack of money, with 66% of respondents reporting they had to do so. While still an alarming majority, this proportion has dropped steadily since a high of 97% of respondent foregoing meals in April.

    • Women were still slightly more likely to report eating less than they feel they should have than men: 68% of women reported they did not eat enough in July compared to 61% of men

  • 66% of respondents reported that the head of the household did not eat enough in July, another steady improvement compared to a high of 85% in May and 75% in June

Illness and Injury

  • The rate of illness reported by garment workers fell only slightly in July, to 25%, compared to 29% of respondents who reported an illness in their household in June and 31% in May (but still higher than the low of 19% in April)

    • Among the women reporting an illness, the respondent herself was the one ill 65% of the time, the same as in June. However, the proportion of men saying they were the ones ill fell to 38% from 53% in June.

  • The rate of injuries reported fell slightly in July, to 6%: in April 5% reported an injury in the household; in May 7% did so; and in June 9% of respondents reported an injury in the household, with a majority of injury-reporting respondents seeking medical attention for either themselves or others

Financial Transactions

Loans

  • 29% of garment workers reported they received a loan in July, less than what we’ve been seeing (compared to 38% in April, 43% in May and 42% in June)

    • We think this drop in loan use is due to most garment workers having received two full or one full and one partial salary payment in July (along with their Eid bonus in most circumstances), leading to more liquidity

  • The rate of loans given out remains very low as it has for the past four months, at just 6% in July. But there are some interesting gender dynamics at work:

    • Women and men are equally as likely to give a loan to a member of the family who lives outside their household

    • Women are more likely than men to make a loan to a member of their household

    • Women are less likely than men to give a loan to a friend

  • The rate of loan repayment ticked up only slightly in July, to 35% from 32% in June

Intra-Household Transfers (IHTs) and Cash Transfers

  • IHTs initiated by the respondents remained very close to their June levels, as 50% of garment workers reported they gave an IHT in July

  • IHTs received, meanwhile, reached their lowest levels in July, at 46%. However, this is largely in line with the past three months, and the lower use of this financial tool might also be due to the increased liquidity the majority of workers experienced in July.

  • Just as we saw in the last monthly review, cash continued to dominate almost all financial transactions, with the exception of outgoing transfers: in July, garment workers made 51% of transfers to individuals outside their  household digitally, identical to June

Eid Bonuses

  • 73% of respondents received the traditional Eid bonus payment from their factory at the end of July. The median bonus amount of Tk. 4,400 is substantial, representing between 40% to 50% of a median monthly salary payment for a garment worker.

    • 70% of women received the Eid bonus payment compared to 81% of men, with women receiving a median payment of Tk. 4,350 compared to Tk. 4,500 for men

    • 58% of the Eid al-Adha bonuses paid in July were paid digitally, an increase from May when 46% of the Eid al-Fitr bonuses were paid digitally

    • Garment workers were able to put a little bit more into savings in July than in previous months: the median amount saved in July was Tk. 3,900 compared to Tk. 2,650 in June, with the likelihood that July’s Eid bonuses made these additional savings possible

    • Additionally, a smaller proportion of workers, 50%, withdrew less than the full amount of the salary received in July compared to June (64%) and May (67%). Again, this is likely attributable to Eid bonuses affording garment workers an extra cushion for the month.

All data presented here come from interviews conducted over the phone with a pool of 1,377 workers. In April 2020, a total of 800 garment workers were enrolled in the study, and by the end of May 2020 this amount had grown to 1,377. The data received in May from the 800 workers that have been part of the sample since April, was compared with the data received from the full 1,377 sample and no discernible differences were found. For the June data, 1,341 workers were interviewed, and for the July data 1,206 workers’ interviews were analyzed (we only use data for monthly reporting from workers who were available for interviews across all weeks in a month). These workers are employed in factories spread across the five main industrial areas of Bangladesh (Chittagong, Dhaka City, Gazipur, Narayanganj, and Savar). Just over three-quarters of the working respondents are women, roughly representative of workers in the sector as a whole.