Cheap is too expensive

The first reports from Bangladesh about the April 24 collapse of an eight story building housing numerous garment factories listed the dead in the hundreds. Every day the number of dead in the Rana Plaza factories has risen. As of this writing, more than 1,125 people are known to be dead. No one seems to know exactly how many people were working in the building at the time of the collapse. Workers were threatened with firing and cuts in pay if they did not return to work after officials recommended that the building be closed because of structural cracks earlier in the day.

This disaster followed a fire in another garment factory in November which killed more than 100 workers. The fire escapes were blocked or locked. Another factory fire killed a more workers the week after the Rana Plaza disaster. Since 2005, at least 1,800 Bangladeshi garment workers have been killed in factory fires and building collapses, according to the advocacy group International Labor Rights Forum.

Since the latest disasters, the government of Bangladesh has promised to raise the minimum wage for garment workers and to change the laws which require workers seeking to form a union to notify factory owners of the intent. Workers attempting to form unions in the past have been fired, beaten and arrested. The garment industry accounts for 80 percent of Bangladesh’s exports and a large number of factory owners have been elected to Parliament. Existing labor and safety laws are often ignored and not enforced. Because of the economic importance and political influence of the garment and textile industry, reformers remain doubtful of meaningful changes.

There is no doubt about the economic importance of making clothing in a country as poor as Bangladesh. The industry employs more than four million workers, most of them women and girls. Their work supports their families and gives them some power in their lives, even at a minimum wage of $38 a month, the lowest in the world according the the World Bank.

Workers are caught between living in desperate poverty and risking their lives to go to work.

Motivated by past disasters, a number of European retailers, labor groups and non governmental agencies have signed an agreement to implement changes in the garment industry in Bangladesh. The contract, the “Accord on Fire and Building Safety in Bangladesh,” with a signing deadline of May 15, sets standards for safety in factories producing clothing for the companies signing. The retailers are committed to paying for part of the cost of improving the factories where the products they sell are made. Retailers are also agreeing to accepting liability for ensuring changes are made.

The agreement has been signed by major European clothing retailers and the parent company of Calvin Klein, the only American company to sign on. The world’s largest retailer, WalMart, has refused to sign the accord. Their reasoning, according to company press releases, is that their own independent system of auditing and monitoring of suppliers will work more quickly and effectively. They have also cited the liability issue as a deal breaker. Their plan also places the financial responsibility for making necessary changes to ensure factory safety solely on the suppliers. “We expect the cost of safety improvements to be reflected in the cost of goods we buy,” said Rajan Kamalanathan, WalMart’s head of ethical sourcing. WalMart will not provide assistance to suppliers trying to improve working conditions, nor will they assume any responsibility if their standards are ignored.

WalMart’s promises would be more convincing if they had not been making similar pledges for the last ten years. The company’s supply chain is so large and complex, they did not seem to know that one of the companies in the collapsed building was still producing products for them even though the company had been removed from the WalMart list of approved suppliers. Expecting contractors and sub-contractors to cover the costs of safety improvements without incentives from the retailers they supply is unrealistic. Pushing “always lower prices” does not leave these suppliers with the margins necessary to implement higher wages and better working conditions and still remain the cheapest supplier. While boycotting WalMart and other brands which use factories in Bangladesh may result in loss of jobs for the country’s workers, always buying the cheapest product guarantees that those jobs will someday be lost to workers in another part of the world who will work more cheaply. Alternatively these jobs will become even more intolerable as owners seek to find ways to cut corners and stay competitive, unless consumers say, “Enough!”

What is the answer? Should shoppers avoid all clothing made in Bangladesh? If a few ethically minded consumers boycott WalMart, the Gap and JC Penney because they have not signed the “Accord on Fire and Building Safety in Bangladesh,” will they really notice? If sales of clothing made in Bangladesh are reduced, won’t that just put poor women out of work?

It is hard to know how to spend our money. It is hard to know which companies check to see that fire escapes are unlocked and buildings are not ready to fall down. It is hard to know which workers are paid a reasonable wages for a day’s work. Feeling guilty is not the answer. We can, however, start by being aware of the how our buying habits effect others. We can let companies know that we care and we will shop in stores that make an effort to ensure the workers who sew their products are treated fairly and have a safe place to work.

Always lower prices come at a cost, somewhere, paid by someone else. Maybe with their life.

The only US company to sign the “Accord on Fire and Building Safety in Bangladesh” as of May 15 is the parent company of Calvin Klein. Other companies maintain they are developing their own monitoring and safety standards.
Copyright © 2013 Janet Jacobson and Sustaining the Northern Plains

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