“Clothing accounts for 80 percent of Bangladesh’s exports and the industry employs over 3 million workers. As bad as conditions in the factories are, workers choose to take these jobs because they are better than any alternative they have. For the young women that make up most of the workforce, it allows them to delay marriage and child-bearing, which has numerous benefits for them, their families, and the country’s development. So cutting off trade with Bangladesh is not a solution. The brand-name buyers should stay and be part of the solution.”
“1) A joint pool with contributions from the major buyers of goods made in Bangladesh could help to finance immediate and relatively inexpensive improvements in health and safety, like training of managers and inspectors, ensuring that there fire exits and fire extinguishers that work, and checking the structural integrity of buildings.””2) Over the medium run, Bangladesh could collaborate with the International Labor Organization and International Finance Corporation on a Better Work program to improve labor conditions and firm productivity.”
“Collective action problems—where no one will move unless everyone moves together—plague the garment industry. It is a highly competitive, low-skill, low-wage, labor-intensive industry that requires relatively little capital investment and is, therefore, highly mobile. Governments are afraid to raise or enforce labor standards because investors and buyers can easily move to another low-wage country. Individual factory owners are afraid to demand higher prices for their goods for fear they will lose business. Multinational buyers are reluctant to offer higher prices because it could erode their profits and disappoint shareholders. And, sadly, many consumers seem to care more about cheap prices than what’s behind the label.
One way forward is for Bangladesh is to work with the International Labor Organization and International Finance Corporation to develop a Better Work program. Better Work is a partnership between those institutions, to help national governments build their capacity to enforce labor laws and to help factories improve productivity. As Richard Freeman and I argued in our book on globalization and labor standards, better working conditions and improved competitiveness are not inconsistent goals. Indeed, there is evidence that a Better Work predecessor in Cambodia has helped open space for improved industrial relations and, through that, to improved conditions, especially around hours, overtime, and health and safety issues.”
Kimberly Elliott: Better Work for Bangladesh
““I think the worst thing consumers could do is overreact – that is, look for a Bangladesh label and say, ‘I’m not going to buy this at all.’” Kim says. A better approach, Kim says, would be for the United States and other countries that import Bangladeshi garments to encourage Bangladesh to join the Better Work program, a joint effort of the International Labor Organization (ILO) and the International Finance Corporation (IFC), the private sector arm of the World Bank.”
“Offering to eliminate the tariff is potentially “a big carrot,” Kim says. “My proposal is to offer Bangladesh and the other poor Asian countries duty-free, quota-free access to the US market contingent on taking some serious steps – like the Better Work program – to improve working conditions.” (African countries already have such access under the Africa Growth and Opportunity Act (AGOA). Individual firms might have a hard time exerting this kind of pressure on garment factories, because they’re all competing against each other. But an across the board offer from the United States would be extremely appealing. I suggest it seems like a no-brainer. “And this would create an immediate 15 percent reduction in the factory’s costs because they wouldn’t have to pay the tariff.” That cut in production costs could help to cover the costs of improving worker safety, she says. Other high-income countries – like Japan and members of the EU – have already instituted similar duty-free, quota-free preferences for developing countries, she says. he stumbling block in the United States so far has been opposition from the US textile industry, Kim says.”
“Elliott and Freeman move beyond the debate on the relative merits and risks of a social clause in trade agreements and focus on practical approaches for improving labor standards in a more integrated global economy. The authors examine both what is being done in these areas and what more needs to be done to ensure that steady and tangible progress toward universal respect for core labor standards is made. While concluding that the ILO should have primary responsibility for labor standards, the book also suggests that the WTO should consider how to address egregious and willful violations of core labor standards if they are trade related.”
Amazon: Can Labor Standards Improve Under Globalization?
the new book by Kimberly Ann Elliott and Richard B. Freeman