Brown light filtered through dust fills a nearly empty railway station in the state of Karnataka in south India. A vendor pours milky, brown tea back and forth between a glass cup and a metal beaker to cool it. He hands it to the stationmaster, who sips and waits. The station, in the town of Gauribidanur, about 45 miles from the technology hub of Bangalore, starts to fill up as men and women arrive by the hundreds. They are on their way to jobs in textile factories in Doddaballapur, about 30 miles away, and in Bangalore.
Two whistles set the tone of the daily commute. The first is the 4:24 a.m. Bangalore Express, which chugs its way through a landscape that becomes progressively drier as it winds toward Gauribidanur from Kacheguda, in the neighboring state of Hyderabad. The second is the 6:20 a.m. Udyan Express, which carries passengers from Mumbai. The trains stop for precisely one minute to load their coaches with more than 1,500 laborers going to work in garment factories. Many more travel by bus, run by both government and the private sector.
In recent years, India has sewn its way toward a more reliable income for nearly 35 million garment industry workers. Agricultural laborers left the fields to work in factories that sprouted up as the economy gained steam. But as demand for exports has dropped amid the global financial crisis, hundreds of thousands of Indian garment workers have found their new line of work less than reliable.
Job losses can be sudden. They highlight an industry where workers have few rights and where the support systems that help laborers in developed markets are lacking, experts say.
One Rider Fewer
Nagaraj Kondavi of Gauribidanur took the train until he lost his job earlier this year. He worked at a ready-made garment factory in the Peenya Industrial Estate in Bangalore, an immense area with some 2,000 factories that supply, among others, JC Penney, Sears and Kmart. Then, as textile companies consolidated amid a drop in global demand, three units of a single factory, Sonal Garments, shut down. About 1,500 workers were laid off, Kondavi notes. He was one of them. Kondavi is now trying to get a job in the textile factories of Doddaballapur. More than 500 people, or 25% of Gauribidanur’s workforce, have lost jobs since 2008, according to Pappana Narayanappa, a local journalist and language professor at National College in Gauribidanur.
Still, the job losses in the state of Karnataka have not been as dire as in other parts of the country. Job losses have totaled about 500,000 across the sector in the last year, as thousands of factories have shut down, notes Rakesh Vaid, chairman of the Apparel Export Promotion Council, an organization of garment exporters that is affiliated with the Ministry of Textiles. The number could reach 1 million, the council says.
Palagummi Sainath, a veteran rural journalist, reported in June that 50,000 workers had been laid off in a single district in the northeastern state of Orissa. Layoffs have been reported in Tamil Nadu and other states since the middle of 2008. A recent survey by the apparel council estimated that nearly 94% of garment manufacturers had been “moderately or severely” hit by the economic slowdown. “The entire textile supply chain is going through this crisis, and exporters in Pakistan, China and other countries are under pressure,” Vaid notes.
Despite the uncertain times, garment-sector work is still the most profitable livelihood in Gauribidanur. “There is a handsome salary at Doddaballapur factories,” says Jayalakshmi Ravikumar in her native language of Kannada. For under-educated workers, the factories provide an opportunity to earn a consistent wage. Ravikumar earns Rs. 3,000 a month (US$64) at Denim Works Garments. In contrast, a life in the agricultural sector would be as undependable as the rains.
Hard Times for Farmers
The farmers from around Gauribidanur congregate outside the government building that anchors the town. They squat and wait to meet low-level officials to discuss soil programs, negotiate produce prices and seed subsidies, and catch the local news. They come from the 219 villages for which the town is the administrative headquarters. They wait in the unforgiving sun, chewing betel and spitting out the juice, serving as customers for one of the few businesses that thrive: the selling of coconut water. “They come here because they have no other work,” says Madanahalli Shantakumar, the office manager and record-keeper at the government building.
Agriculture has fallen on hard times in the region. It seldom rains, and when it does, it pours, as over the last month. The water level has plunged to lower than 800 feet below ground level, according to M. Anuroopa, assistant director of the Department of Agriculture in Gauribidanur. This forces farmers to use pumps to irrigate their fields — if they have the money. If the rains are not consistent, as in 2009, the region’s economy, which depends on agriculture, sericulture (the raising of silkworms) and animal husbandry, stagnates.
In 2008, a domestic clothing brand named Raymond’s opened Gauribidanur’s first garment factory. It now employs 800 workers, but pays them just a third of what factories in Doddaballapur or Bangalore pay, notes Narayanappa, the local journalist. Many of those who still have jobs have to travel to them. In effect, they’ve become intrastate migrants. The pattern is consistent across much of India as once-rural workers find jobs in urban areas. Such laborers make up 36% of the Indian workforce, according to the National Commission for Enterprises in the Unorganized Sector. They do not receive job perks such as leave or social security.
In Karnataka, which is among the states least affected by the global recession, about half a million workers are employed in the garment sector, according to a budget speech in May by the Chief Minister, B.S. Yeddyurappa. Across India, 35 million workers stitch collars, sew sleeves, dye cloth and perform all tasks that lead to the tiny “Made in India” tags being affixed to apparel sold in stores such as H&M and The Gap. Since the expiration in 2004 of the global Agreement on Textiles and Clothing, which imposed quotas on developing countries’ garment exports, India’s textile industry has become extremely profitable, contributing as much as 4% to gross domestic product.
Hurt by Currency’s Strength
But in 2007, a strong currency gave the industry pause. The rupee rose sharply and buyers shifted their attention to Bangladesh and other countries with lower costs, according to the Apparel Export Promotion Council. The economic downturn of 2008 reached further into the textile sector. Exports fell 4% from April through December, compared with growth of 21% in the same period of 2007, according to the Confederation of Indian Textile Industry.
Hundreds of thousands were left unemployed. Karnataka’s textile industry has weathered the storm a little better than those of other states. Still, some factories consolidated, notes Gopinath Parakuni, general secretary of Cividep, a non-governmental organization based in Bangalore that helps garment workers unionize.
As in many mergers, job losses followed. While the cutbacks barely registered on the state unemployment rate, they left nearly a quarter of Gauribidanur’s labor force unemployed, or back in the fields. “The industry has exaggerated the extent of the crisis as a pretext to lay off middle-level factory staff and force workers to take wage cuts,” K.R. Jayaram, the Garment and Textile Workers Union leader in Bangalore, told Business Line, a local business daily.
Workers in the unorganized sector have little representation with their employers and typically are hired through informal referrals. “Laborers are hired through contractors and not employers, so they can’t negotiate wages,” says Dibyendu Maiti, an assistant professor at the New Delhi-based Institute of Economic Growth. “There is no clear instruction in the Contract Labor Act of 1970 that there should be accountability between the contractors and laborers.” This makes laborers easier to dismiss, according to Maiti. And rules that state that employers should lay aside money to compensate for sudden termination are rarely followed. Loopholes allow laborers to be exploited, and existing laws often aren’t upheld.
The Apparel Export Promotion Council wants a loosening of the Contract Labor Act to allow companies to adjust quickly to global demand. Laws should promote economies of scale and competitiveness in a battle for global markets that India is already losing, the group says. But greater competitiveness comes often at the expense of workers’ rights, notes Parakuni of Cividep. Unionization may be the best way to protect them. “The managers in factories have no inkling about how to manage, and have a ‘rule-the-cattle’ mentality,” he says. “The workers are helpless.”
Meanwhile, the important Christmas shopping season arrives soon around the world. Its success could well determine how crowded the morning trains carrying garment factory workers from Gauribidanur to Doddaballapur and Bangalore will be next year.