Are conditions in Bangladeshi garment factories bad? Yup, they sure are.
All the companies concerned publish official policy statements on these issues – Walmart, Gap, Sears, Disney, Target, Abercrombie & Fitch, H&M, JC Penney, and KiK (pdf) – but the problem is straightforward: it costs more to produce under good working conditions than bad. While brands and retailers claim to be concerned about protecting the rights and safety of the workers who make their clothes, they demand prices from their suppliers that virtually guarantee that those goals will be ignored. Josh Green, chief executive of Panjiva, a leading supplier of supply chain data to the apparel industry, recently described the \”relentless pressure\” that these companies \”put on their suppliers to deliver lower and lower prices\”, calling that pressure \”a key reason why you see factories cutting corners\”.
As long as that price pressure continues, more deadly fires are inevitable.
It would not cost brands and retailers much to make apparel factories safe and pay workers decently: labor costs are a small percentage of the final retail price of their garments. Any impact of safety reforms on prices paid by consumers would be modest.
Ah, no, that\’s not the solution though.
The actual solution is to send more such work to such places. Much more such work. As much as we possibly can in fact.
This is one of those areas where Marx was actually correct. As long a there is that reserve army of the unemployed (which in the Bangladeshi case means landless rural peasantry) then you\’re just not going to get anywhere by tinkering at the margins with the conditions of work, nor pay. What you actually need is for there to be enough work that that reserve army is exhausted. At which point the competition between the capitalists for access to the profits that can be made by employing that labour will increase wages.
And we\’ve a recent example too. Factory wages in China were around $1,000 a year as recently as the year 2000 AD. They\’re now, in 2012 AD, around $5,000. Why? There\’s been so much damn work sent their way that that reserve army of rural peasantry is exhausted. There just aren\’t any more workers to be tempted into the Big City and the factory floor. Thus wages are rising strongly.
We know this works: we\’ve both the theory and the empirical evidence in front of us.
The way to make poor people in poor countries rich is to buy things made by poor people in poor countries.
Get out there and get shopping!