The US exports $5.8B in apparel though it imports over $80B. To no surprise, the two main sources of imported apparel are China and Vietnam. But what of Bangladesh after the factory collapse and news of working conditions there? The country has risen to #3 on our list of importers.
Ready to wear garments dominate the Bangladeshi economy, representing 77% of their exports. The apparel industry is responsible for the soaring GDP of that country. The reason for their success in this market is clear when you see their labor rates are one third of what Chinese workers make. With the cost of materials and shipping being so low, labor represents the majority of a garment’s cost.
Should that lead us to put a halt to the purchase of goods from Bangladesh? In spite of my support of US apparel manufacturing I contend the answer should be a qualified ‘no’. Prior to its rise in the apparel trade, Bangladesh was mired in poverty. In 1992, 56% of Bangladeshis were below their national poverty line. By 2010 that number had fallen to 31%. Over the course of this century it has fallen 2% per year. Infrastructure has improved as evidenced by the increase in water supply to rural areas increasing at similar rates. The economic justification is made, but that doesn’t absolve the people on our side of the trade. Just because labor is cheaper in Bangladesh, it doesn’t mean life should be cheaper. Companies doing business there are smart to manufacture where costs are low, but they need to make sure that workers there are provided with safe working conditions. The tragedy of Rana Plaza gave rise to a strange competition. Firstly, a mostly European group created the Bangladesh Accord, which outlines safety requirements, requires inspections, and very importantly publishes the results and holds businesses accountable. The reaction from The Gap and Walmart was fear of liability – that if they didn’t follow the rules, they could be sued. Initially, they sought to go it alone and not join the Accord. Concern grew about how rigorous their inspections would be and whether or not there would be any transparency whatsoever. Over time, North American businesses realized that they could not sway the Accord to change, yet they needed something similar of their own. From this the Alliance for Bangladesh Worker Safety was created. A bit of a rivalry has occurred between the two, largely to the benefit of Bangladeshi workers. As the Accord and the Alliance bicker over which can inspect the most factories, which has the most stringent inspection criteria and which is most transparent, they have elevated each other’s game. One of the key complaints about the Alliance has been their lack of transparency – something the Accord has prided itself on – but look who just released their first inspection report.
We often wonder what awareness does for any cause, but we can see right here the results popular pressure has created for companies to take meaningful action. Compare the creation of these agencies in the wake of the 2013 Rana Plaza collapse to what little was done following the 2012 Dhaka fire that killed 117. So the next time you buy something made in Bangladesh feel good that you’re helping an impoverished nation pull itself out of poverty through capitalism, but continue to pressure brands to value life over labor everywhere.
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