Who killed the Bangladeshi garment workers?
The news media in the West have been giving a lot of attention to the collapse of a building housing a garment factory in Bangladesh which killed over 400 workers, mostly young girls, on 24 April, 2013. This was not the first time. Bangladesh has had a series of disasters in their garment factories, lastly in November 2012 when 112 workers died in a fire in a factory where the doors were locked. Pope Francis condemned the living conditions of workers in Bangladesh and the European Union officials and trade unions expressed outrage at conditions in Bangladeshi factories. EU officials stated that they were considering punishing Bangladesh by altering the existing duty-free quota-free status given to Bangladesh garment exports. American experts said that there should be more training for Bangladeshi managers on industrial safety.
The moral outrage sounds very convincing, so let us look at the background. Bangladesh
is one of the poorest countries in the world and has a huge population of 164 million. Its per capita income level ranks 192 out of the 196 countries in the UN. It is now a part of the former Kingdom of Bengal, the richest state in Mughal India till it was conquered by the British East India Company after the Battle of Plassey in 1756. The country was looted and taxed heavily by the British and adventurers like Robert Clive became among the richest men in Britain. Since then, Bengal reverted to poverty and periodic famines killed millions. The last great famine was in 1943 during World War 2 when British Prime Minister Winston Churchill diverted food grains intended for famine-stricken Bengal, where droughts and a cyclone had destroyed farms, to overstocked food stockpiles in UK and Europe with some contemptuous references to Indians, killing 3 million Bengalis. The pleas of his own government in Delhi for famine relief for starving Indians were ignored and it was not permitted to use Indian money or ships for emergency food imports. ( http://www.time.com/time/magazine/article/0,9171,2031992,00.html)
Since 1996 Bangladesh has seen a commendable annual GDP growth rate of around 6% a year. It lacks the investment, the technology and the infrastructure for advanced industrial
production or industries. It depends heavily on the garment industry which is low investment and highly labour intensive. The garment industry accounts for 80% of its exports and brings in $30 billion in export revenues. The industry employs 3.6 million workers. Traditionally, the sweat-shop garment industries in Asia and South America employ unmarried girls who will work for very low salaries and work long hours with only one half hour break for lunch. It is reported that the average garment worker’s salary in Bangladesh is $38 per month. Bangladesh is a popular source for US and EU garment buyers, the second largest after China, as it is known as the world’s lowest cost producer. That is its recognised comparative advantage. This is how it gains custom among the giant corporations in the USA and the EU that buy cheap and sell at a huge profit. For example, a shirt bought from a Bangladesh factory for $1.75 will sell for $35 in the USA.
Nice profits!
I worked as a UNIDO consultant for the SME garment industry in Sri Lanka in 2002 and 2004 for a total of 19 months and got an insider’s view of the trade. Unlike Bangladesh, Sri Lanka has tight labour laws that are enforced. It is a richer country with a history of communist labour movements that succeeded in creating powerful trade unions. The Labour Ministry sets minimum wages for all recognised industries, together with working hours and minimum working conditions. Almost all Sri Lankan factories, even the small ones, are air-conditioned and well lighted. The minimum number of toilets and lunch room facilities are established by law. Computerised cutting is standard and all sewing machines are electric. But working hours are very hard and salaries are very small. Once the machines start, a worker cannot rise for water or the toilet till the half hour lunch break. After lunch, work will proceed for another uninterrupted fours hours and an additional fours hours of overtime is not uncommon when rush orders need completion. So workers endure this hardship for five or six years and leave to get married or do other
less demanding jobs.
The SME garment industry survives on the whims of the Western garment buyers for famous brand names advertised in the West. When the big retail chains make their plans for clothing styles for the next season, the buyers will show the manufacturers a sample and bid for a price. They will beat them down by threatening that they can always get better prices from competitors or in Bangladesh. This is the bargaining chip: there is always someone more desperate who will cut corners and try to get the business. The business itself is a matter of life and death for many poor countries. The manufacturers have no bargaining power.
How can an industrialist cut prices but by making cheaper factories, paying lower wages and greater exploitation of labour? The factory that collapsed in Dhaka on 24 April was making garments for Walmart, Sears, Gap, J.C. Penney, Cato Fashions, Benetton (all in USA), Primark (UK), Loblaw (Canada) and Mango (Spain). These billion dollar corporations were set on extracting the last possible penny from the suppliers so that they can make super-profits. In Sri Lanka I saw factories making Arrow brand shirts sold in the USA for $35-45 for a price of $2.0. Did these giant corporations and their millionaire owners not know where their profits were coming from?
In Bangladesh there has been widespread public agitation and anger against poor labour
standards after this disaster. It is not that the government and people of Bangladesh do
not care. They are helpless. If the garment industries do not employ their 3.6 million workers and bring $30 billion as exports, the Bangladesh economy would collapse. After the disaster, the government and the army made commendable efforts to save as many people as possible. We saw on TV soldiers in tears when they could not extract bodies. Public anger was turned on the building owner who is now being charged for murder and the High Court ordered the confiscation of his assets to pay the workers.
The EU can take the high moral ground, blame Bangladesh and cut even their economic
lifeline by imposing higher duties on their garment exports (a small bonus for the bankrupting EU). In the USA, the authorities talk of the need to fund training for Bangladeshi manufacturers, as though the Bangladeshis are an ignorant people. But no one in the West talks of increasing garment buying prices so that manufacturers can
improve working conditions and pay. After all, none of the Bangladeshi garment
manufacturers (whom I met with on an ITC/WTC project some years ago) are dollar
millionaires. The best that the EU and the USA could do is to establish a minimum import price for imported garments. But that is an unthinkable proposition. It would hurt corporate profits in the West.
Kenneth Abeywickrama
01 May 2013