Pandemic crushes global supply chains, workers at both ends

In her last weeks working the freight shift at the local J.C. Penney store, Alexandra Orozco took out her phone and hit record. The 22-year-old shot videos as she and her co-workers slid down a metal shoot (technically meant for empty boxes) in the storeroom, their heads falling back laughing, and posted them on TikTok. Another, uploaded on 13th October, shows the giant black-and-red “Everything Must go!” posters hanging from ceiling to floor, and an eerily half-empty basement section.

“Slowing losing my job,” she wrote in the caption, days before the store in Delano, California shut for good, just one of 156 J.C. Penneys across the United States to close since June this year.

Orozco began working part-time at J.C. Penney when she was 18, and in nearly four years rose through the ranks from cashier to freight team associate, unloading trucks stuffed with new stock and doing inventory. Four days a week, she arrived at the store by four or five a.m. The early mornings suited her; she loved her job but crowds made her anxious. Now, since being laid off, she’s stressed. She’s applied for a couple of jobs — one counseling kids, the other delivering flowers — but has yet to hear back from either.

“It’s so sad,” she explains over the phone from her home, noise from a T.V. playing softly in the background. “I never thought this would happen. And Delano is a small place. There’s not that many stores. It’s hard to find jobs here.”

Halfway across the world, Matefo Litali experienced upheaval, too. A skilled sewer, the 53-year-old has worked in garment factories for the past 14 years across Lesotho, a small mountainous country entirely surrounded by South Africa. Tzicc Clothing, which makes apparel for U.S-based giants J.C. Penney and Walmart, employed the seamstress for two months before nationwide lockdown measures forced all factories to temporarily close in March. On May 6, she returned to work. The next day, at the end of her shift, she says management told her not to come back. Tzicc confirmed her last day was May 7.

“I felt powerless,” she says. “The first thing that went through my mind was, ‘Why me?’”

Neither woman has met, nor are they likely to meet. One woman lives in a remote agricultural town on the west coast of America, the other some 10,000 miles away in Southern Africa in one of the smallest countries on earth. Now, both of their lives — and livelihoods — are linked by a global pandemic that has crushed one of the world’s supply chains and with it, economies, too. COVID-19 lockdowns have obliterated a retail sector already struggling to survive before the coronavirus hit, which has in turn contributed to the collapse of the global garment trade and wreaked havoc for millions of workers, the vast majority of them women like Orozco and Litali.

In Lesotho, which has a population of 2.1 million, the pandemic’s effects were felt fast. Over the past two decades, the country’s garment industry has boomed to become its largest employer, accounting for more than 20% of Lesotho’s gross domestic product. Much of this success is down to a trade deal called the African Growth and Opportunity Act (AGOA), which was signed by then-President Bill Clinton in 2000, allowing duty-free exports to the U.S. Today, Lesotho’s garment workers, 90% of whom are women, craft clothes for some of America’s most iconic brands: Levis Strauss, Wrangler, Macy’s and Walmart.

While Lesotho’s garment industry might be lesser known compared to the powerhouses of China and Bangladesh, it’s another example of an economy heavily reliant on U.S. demand. Outside of the African continent, America is the largest recipient of Lesotho’s exports – accounting for almost half – according to the most recently available World Trade Organization data from 2017. And if the country has escaped relatively unscathed from the coronavirus, with just 2,065 cases recorded since the start, the impact of America’s stringent lockdown measures have trickled through the industry in Lesotho down with equally devastating effect.

In the U.S, meanwhile, clothing retailers have been hit particularly hard. While J.C. Penney hasn’t been profitable since 2010, the 118-year-old department store chain filed for bankruptcy in May. Six months later, it was bought out but has already reduced its workforce by over 10,000, approximately 11% of its U.S. staff, during the restructuring, a source familiar with the situation confirmed to The Fuller Project.” The bankruptcies of major American retailers have stacked up this year: J.Crew, Neiman Marcus and Brooks Brothers, to name three of the 46 in 2020, according to marketing data from S&P Global.

“And when a big U.S. retailer takes a tumble,” says Neil Saunders, managing director at research firm GlobalData Retail, “the effects are felt across the globe.”

The U.S. is one of the world’s top importers of clothing, accounting for nearly a quarter of the total global retail spend. At the beginning of the pandemic in March, as U.S. retailers canceled or failed to pay for existing orders worth billions of dollars, the effects quickly rippled down the supply chain globally. Thousands of garment factories around the world closed leading to widespread lay-offs and suspensions of employees like Litali in Lesotho. From January to June of this year, imports of garments in the U.S. dropped by 26%, a loss of $17 billion for factories around the world compared to the same period last year, according to the International Labour Organization (ILO).

“Even though J.C. Penney may not be profitable, it’s still a pretty big business,” says Saunders. “It’s still placing a lot of orders with suppliers and supports a lot of jobs globally, so the fallout is extensive.”

At Tzicc Clothing, which employed Litali, roughly one-fifth of employees have lost their jobs since May, says Tšepang Makakole of the National Clothing Textile and Allied Workers Union (NACTWU) in Lesotho. He knows of at least six factories that have closed across the country, seeing thousands of workers lose their jobs.

“For women, it’s a disaster,” he adds. “Most of them working in the factories are single parents supporting their families and right now, the industry is facing a total collapse.”

Litali, the seamstress, says she felt weak in the knees when she heard the news that she was suddenly unemployed. In the nineties, a flurry of Taiwanese and Chinese clothing companies moved to Lesotho, and Litali was one of the first women to be taught how to sew, she says. At Tzicc, she would sit at her table five days a week and stitch together T-shirts and gym leggings using an old, worn sewing machine. The factory is set on one level, with exposed brick walls, and packed tight with over 1,000 women.

A widow for the last eight years, Litali single-handedly supports her youngest daughter, who is 20, and her 4-year-old grandchild. During the lockdown, her employer delayed her final $94 paycheck for three months until May. Tzicc Clothing also claimed she didn’t qualify for monthly government subsidy payments totalling $160 because she was on a probationary contract.

Malekena Ntsiki, an organizer at the Independent Democratic Union of Lesotho (IDUL), disputed both issues with Tzicc on behalf of Litali, and she says the government subsidy was intended for all workers regardless of their contract type.

The Human Resources manager at Tzicc Clothing, Masefatsa Mofolo, confirmed the company laid off staff due to limited orders and that Litali lost her job. All employees on probationary contracts were terminated during the pandemic, she said.

While she waited for her final paycheck, Litali received no income or support for three months. The family survived off food parcels donated by the local church until her salary arrived. “I got so stressed I thought I was going mad,” she explains. “I would spend the whole day in my house sleeping, not doing anything. It got to a stage where I wouldn’t even try to talk with my daughter. She would ask me: ‘Are you sick? What is the problem?’ and I wouldn’t say anything to her. I didn’t want to speak to anyone or ask for help.”

At one point, she considered tying the knot with her partner. An electrician, he was paid daily for odd jobs on construction sites but this work dried up during the pandemic, too. “I thought: okay, I’m old, but I’m struggling and this person is here…maybe marriage can help somehow,” she half-jokes. Together for a couple of months, the pair have since parted ways.

Back in California, Orozco occasionally walks past the J.C. Penney store in town on her way to the bank. The windows are free from sale signs, the gates locked. “It’s upsetting,” she says. “I was really close to the cleaning lady who worked there. She gave me remedies for my insomnia. It broke my heart to know I probably won’t ever see her again.”

A spokesperson for J.C. Penney declined to comment on the impact of countrywide store closures.

Although Orozco lives with her parents, she still needs to cover her car and phone bills. When her J.C. Penney store closed temporarily in mid-March in adherence with COVID-19 measures, she was out of work for three months and applied for unemployment.

She used the time to finesse her side-hustle: a make-up business. In June, Orozco launched Glossy Baby Cosmetics, selling lashes, lipglosses and clothes via Instagram. She spends hours researching the products online and then buys in bulk when she finds something she likes.

“My room is currently like a tornado,” she adds of the boxes piling up.

It’s still early days, and money is tighter than before. She’s currently making an estimated $200-300 per month in sales from her new online business, nearly five times less than her salary at J.C. Penney.

The layoff has taken its toll on her mental health, too. Orozco suffers from bouts of depression and often feels like giving up on her newfound entrepreneurism, though she’s quickly talked out of it by her family, she says. Her 42-year-old mother, Luz, who immigrated to American from Mexico at 13-years-old and set up her own party-planning business is particularly persuasive.

Even if she did give up, Orozco’s choices are limited. Just over a two-hour drive from Los Angeles, the population of Delano is roughly 50,000, and jobs are scarce, she says. The J.C. Penney was one of the few remaining department chains in town and many of her co-workers, much like Orozco, hadn’t found another job by the time the store shuttered.

“Not a lot of people worked there but the store really meant something to Delano,” she explains. “People are really sad. It’s the only place that sold nice, branded clothes, like Levi’s. And it’s been here for a very long time. My mom used to go shopping with her mom there but she can’t relive that memory because the store is gone.”

While a rebound isn’t impossible, the drop in demand for apparel shows no signs of abating, says Saunders from GlobalData. Clothing sales fell by 4.2% in October compared to the previous month, according to advance monthly sales data released by the U.S. Census Bureau.

“If this continues into 2021 and beyond, then it could have a severe impact on the apparel supply chains (long-term),” he adds. “In a low-demand environment, pricing becomes more of an issue. Players compete with each other and the fallout is (often) felt in labor in terms of working conditions, benefits, pay rates and working hours.”

Today, both Litali and Orozco’s lives look uncertain. In Lesotho, Litali waited patiently outside the gates of various garment factories for months in search of work. In August, she landed a job sewing jeans at Presitex, a factory close to her previous employer. But her contract is temporary, and with each passing month, she fears it won’t be renewed.

After learning a kiosk in her local mall costs $5,000 to rent for two months, Orozco is looking into more cost-effective ways of bringing her Instagram business to life. By next year, she hopes to have saved enough for a brick-and-mortar store.

“Right now I’m not sure whether to risk investing a little more into the business or pay my bills,” she says. “It’s stressful but it’s worth it, you know? I know one day it will be worth it.”