🧵 Fast fashion’s wage reckoning

1. Deadly garment-worker protests in Bangladesh highlight fast fashion’s labor issues

Fast reckoning… Thousands of garment workers in Bangladesh — the world’s largest clothing exporter after China — are protesting over low wages. At least three workers have died during the unrest. Mainstream retailers like H&M and Zara parent Inditex are the primary buyers of products made by the country’s 4M garment workers, who earn as little as $75/month.

• Bleak conditions: Protesters are seeking a minimum wage of about $210/month. That’s nearly 3X the current rate, but still less than what US workers would make in a week at $7.25/hour. FYI: a survey found that garment workers’ daily food intake is far below the recommended amount.

• Coming unstitched: It’s the largest-scale protest by Bangladeshi garment workers in a decade. 150 factories have been shuttered “indefinitely.” Last week, Bangladesh’s PM Sheikh Hasina rejected demands for a pay raise beyond 56%.

• Key industry: From 2011 to 2019, clothing exports from Bangladesh more than doubled to $33B. The garment industry makes up 16% of Bangladesh’s GDP, and 85% of its exports.

Beyond Bangladesh… Fast fashion’s reliance on cheap manufacturing is raising red flags. Brands like Shein have soared in popularity thanks at least in part to ultracheap prices made possible by low-cost labor overseas. In August, a bipartisan group of US lawmakers urged the SEC to pause Shein’s IPO until it can prove it doesn’t use forced labor in China to make its clothes. This year, a House committee alleged that Wish rival Temu regularly ships products made with forced labor to the US.

THE TAKEAWAY

No one wants to foot the labor bill… Studies show that 93% of brands currently don’t pay garment workers a living wage, and that just 27% have a public strategy for doing so. Major fashion brands including Adidas, Gap, and Abercrombie recently said they would pay more to help Bangladeshi manufacturers cover wage increases. But factory officials claim that getting brands to follow through on promises when placing orders is easier said than done.

2. Nvidia upgrades its popular AI chip as the US cracks down on tech exports to China

Chip off the new block… Meet the H200. Yesterday, Nvidia introduced the latest evolution of its best-selling AI chip. Nvidia said the H200 is designed to handle the “massive amounts of data” needed for genAI (picture: more memory and faster output than its OG A100 chips). Nvidia said tech titans like Amazon, Google, and Oracle plan to use the newer chip by next year. Excitement over Nvidia’s AI processors has supercharged the company’s valuation, pushing its market cap past the trillion-dollar mark.

Salty relations… The US gov’t has cracked down on semiconductor exports to China this year as concerns about the chips’ possible use in military tech pile up. Last month, President Biden reinforced AI export restrictions, mandating special licenses for shipping advanced chips to dozens of countries. The restrictions also blocked Nvidia from selling its less advanced H800 chips to China-based businesses. 

• Chinese tech giants Alibaba, Baidu, ByteDance, and Tencent are said to have ordered a combined $5B worth of A800s. Losing China would be a big blow: now, Nvidia’s reportedly working on (another) less advanced China-specific chip.

THE TAKEAWAY

Walking the line takes finesse… As of August, Nvidia accounted for a whopping 70% of the world’s AI chip sales. But as a US company, it has to comply with US regulations while it tries to meet soaring global demand. Restrictions on exports to China could hurt Nvidia’s biz (for example, if it needs to cancel billions worth of orders). But thanks to the cushion of US demand, Nvidia expects its fourth-quarter sales to more than double to $16B.

What else we’re Snackin’

• Disconnected: Omegle, the Chatroulette-esque site that connected strangers for video chats, shut down following increased scrutiny of its safety for minors. The 14-year-old platform had a resurgence on TikTok (#omegle has 11.5B views).

• #WhatAreThose: McDonald’s and Crocs are teaming up for a line of clogs and Jibbitz charms (picture: $75 purple McD’s Grimace Crocs). Both brands have found viral success with meme-able collabs.

• Aircrafted: Boeing stock popped after Emirates Airline said it planned to purchase 95 jets from the biz. Boeing has struggled overseas following trade tensions and the fallout from two deadly 737 Max crashes.

• Frozen: There’s trouble in chicken nugget land: Tyson’s quarterly sales fell and it expects flat revenue for the year, partly on slowing demand. It’s shuttering eight plants and cutting thousands of workers to slash costs.

• NotForYou: Nepal banned TikTok yesterday, three years after its neighbor India did the same. Nepal’s gov’t said TikTok disrupts “social harmony” as global scrutiny of the influential Chinese app continues.

Snack Fact of the Day

Tuesday

• October consumer-inflation report

• Earnings expected from Home Depot, Getty Images, and Sonder

Authors of this Snacks own shares of: Alphabet, Amazon, Nvidia, and Walmart

*Advertiser’s disclosure: This is a paid advertisement for Autonomix’s Reg A public offering. Additional information concerning risk factors related to the offering can be found in the Form 1-A offering circular.