I’ve been thinking over the last several days about the tragic factory collapse in Bangladesh. One question that comes up is why global apparel firms would choose to source their products from Bangladesh. CNN has a spiffy graphic that clearly shows that cost is one reason (Bangladesh vs. the U.S.: How much does it cost to make a denim shirt?, May 3).
Of course, the US ain’t exactly the right benchmark here. The real alternative is China and the Wall Street Journal reports that wages there are four times higher than those in Bangladesh (The Global Garment Trail: From Bangladesh to a Mall Near You, May 3). That kind of cost advantage together with a tariff advantage with the EU gets you growth like this.
So what happens from here? One might expect that brands will bail out of Bangladesh but that is not really a guarantee of lowering the risk of a disastrous industrial accident or a scandal tied to the poor treatment of workers. As a different Wall Street Journal article tells it, there are plenty of developing nations in Asia whose track records on worker treatment range from spotty to godawful (Apparel Retailers Confront Tough Options, May 8).
While Bangladesh has become a poster child for what’s wrong with Asia’s factories, Myanmar, Pakistan, China, Indonesia and India are even riskier to brands for sourcing goods and investing, according to Maplecroft, a risk-analysis firm based in Bath, England.
In September, more than 300 workers died as a result of two factory fires in Pakistan, with workers trapped behind locked doors in both cases. One of the fires, at a Karachi textile plant, ranked among the deadliest industrial factory fires in history, surpassing Thailand’s Kader Toy fire, which killed nearly 200 more than 20 years ago. Factory fires also are a problem in China and India.
In Cambodia, mass-fainting incidents, in which large groups of workers faint within a short period, have raised concerns about worker malnutrition, excessive heat and poor ventilation of factories. As many as 2,000 factory workers passed out on the job in 2012, according to union and government statistics.
Of course, the $64,000 question is whether anyone cares. It is natural to feel outraged that workers have to risk their lives to make polo shirts. What’s less clear is whether enough people are willing to translate moral outrage into economic action. The reality is that we really REALLY like cheap clothes. Check out this graph of how American spending on apparel as a percentage of disposable income has changed over the years (Apparel Spending as a Share of Disposable Income: Lowest in U.S. History, Seeking Alpha, Mar 21, 2010).
Now Americans as a whole have become a lot richer over the last eighty years but a bigger denominator is not the only explanation here. A drop in the real price of shirts and shoes is also involved and we now own a lot more clothes. For those with a teenager in the house, think about how many pieces of clothing they have relative to what you had as a kid. Or think about how much closet space your parents had and whether you would consider a walk-in closet a necessity. (For more on this see Elizabeth Cline’s Overdressed: The Shockingly High Cost of Cheap Fashion.)
In a world where people are happy to snap up cheap clothes, it is hard for a large-scale brand to buck the trend and take on additional cost in order to ensure ethical treatment of workers in its supply chain without some evidence that consumers are willing to pony up. Some retailers, however, appear to be trying to get ahead of the curve (Some Retailers Say More About Their Clothing’s Origins, New York Times, May 9).
Nordstrom says it is considering adding information about clothes produced in humane working conditions. …
Nordstrom said it had provided factory information in response to shoppers’ calls, and was considering going a step further, said Tara Darrow, a spokeswoman. The Nordstrom Web site specifies eco-friendly products, “so how can we do the same with people-friendly?” Ms. Darrow asked. “Hearing from customers and knowing they care definitely compels us to want to do more.”
While one can applaud Nordstrom taking action, it is not clear that they and similar firms are in position to change the market. They play at a higher price point and at a minimum need to aim for higher quality. If quality correlates with well-run factories that employ workers sufficiently skilled that they can choose where to work, Nordstrom may be able to offer transparency pretty much for free since this ain’t really their problem. It’s going to take pressure on more down market retailers for there to be substantive improvement in global supply chains. There is likely an analogy here with the American food supply chain. An individual consumer may be appalled by the conditions on factory farms and that might create an opportunity for Whole Foods to sell grass-fed beef and cage-free eggs but as long as most of America eats on a tight budget, industrial-scale farming isn’t going away.