The Bangladesh clothing factory disaster and us. Not the US, but us

We consumers want to pay the lowest price possible for whatever we want to buy.  The market works, and works furiously, to get us products at those low prices.

This drive for low prices has led to China's rise as the world's factory.  In an earlier post, I wondered whether China's "cheap" manufacturing is worth all that.  I noted there:

We consumers all over the world are not willing to pay anything towards maintaining the environment, leave alone improving its quality.  Simultaneously, we seem to be addicted to inexpensive goods that come from China.  Even from a simple economic understanding, we can hypothesize that somebody is paying a price that we are not.

In China's case, there is one huge price that we already paying the piper: the effect on the natural environment.  Smoke and smog, and erosion, and more.

China's economic growth and development means that slowly wages have risen there, which then has spread the "cheap" manufacturing elsewhere, to poorer countries like Bangladesh.  Unlike China's environmental cost that we don't pay for because it is largely out of our sight, the drive towards lower and lower prices is a lot more visible in Bangladesh.  The latest was the collapse of the multi-level factory that has resulted in a body count that has already exceeded 550!

As consumers, we might be able to ignore the impacts on China's environment, but the loss of human lives in Bangladesh makes us pause, at least for a while, forcing us to re-evaluate our drive towards low prices.  What is the cost breakdown of the typical t-shirt manufactured in one of those factories?

Twelve cents!

To get prices that low, workers see just 12 cents a shirt, or two per cent of the wholesale cost. That’s one of the lowest rates in the world—about half of what a worker in a Chinese factory might make

But, those twelve cents are also why these jobs exist in Bangladesh.  This low wage is:

a major reason for the explosion of Bangladesh’s garment industry, worth $19 billion last year, up from $380 million in 1985. The country’s 5,400 factories employ four million people, mostly women, who cut and stitch shirts and pants that make up 80 per cent of the country’s total exports.

We forget that Bangladesh is one awfully poor country.  Matt Yglesias writes while situating "Bangladesh's GDP per capita in the context of American history":

It's common to compare Bangladesh to America's own sweatshop era in the late-19th century, but Krugman shows that Bangladesh is actually much poorer than that.

Yes, Bangladesh can do a lot more than it currently does to enforce labor regulations and occupational safety protocols.  But, ultimately,

Real reform will mean paying a lot more than $14 for a shirt.

We consumers have the power to influence favorable working conditions and lives for Bangladeshi workers, or workers anywhere, for that matter.  But, we have to be ready to put our money where our mouth is:

Babul Akhter, president of the Bangladesh Garment and Industrial Workers Federation, said buyers have a responsibility to check the safety and security of those making the clothes they order, but most overlook this.
Abdus Salam Murshedy, former president of Bangladesh Garment Manufacturers and Exporters Association, adds: "The buyers and brands look for the most competitive offer. We cannot pay appropriate wages [to workers] unless we get proper prices for the orders."

It is easy to criticize "those greedy corporations" when they are merely responding to us greedy consumers!

As I noted in another post, it is bizarre that human life in some parts of the planet is held more valuable than human life elsewhere:

I find it terrible that a human life is not the same anywhere on the planet.  There seems to be a collective ennui when it comes to the loss of the lives of humans who were doing nothing but tending to their daily lives in some parts of the world.  The innocent civilians who die by the hundreds and thousands in many, many countries of the world do not make it even to the back pages of the papers, leave alone the front pages.

This Bangladesh incident will slowly move away from the front pages to some obscure spots, and will eventually disappear.  Soon it will be the holiday shopping season and we consumers will line up outside the locked stores for the early bird prices.  We will trample fellow-humans as we rush to pick up that remarkably low-priced product from China or Bangladesh.

The customer is always right!


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