Kimberly Ann Elliott: Better work for Bangladesh

In the wake of Savar and Tazreen, debate rages in garments business about whether to deepen trade ties, or take punitive measures (“39 per cent said they would probably buy fewer products produced in Bangladesh, according to a survey by Harris Poll“).  Kimberly Ann Elliott (co-author of Can Labor Standards Improve Under Globalization?) argues for deeper ties, and better safety measures.
“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.”

Kimberly Elliott/ New York Times: Cutting Off Trade Would Hurt Workers

“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.”

How to Avoid Another Bangladesh Factory Disaster

“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

2 thoughts on “Kimberly Ann Elliott: Better work for Bangladesh

  1. Bangladesh’s lifeblood is textiles. We’ve all heard of ‘company towns’ (where citizens are so reliant upon one employer, if that employer were to leave, the town dies). Well, Bangladesh is a ‘company nation.’ Without jobs in apparel factories, people’s lives would not only be damaged, they would, without exaggeration, be ruined, writes David Macaray

    Boycotts are double-edged swords

    Bangladesh’s lifeblood is textiles. We’ve all heard of ‘company towns’ (where citizens are so reliant upon one employer, if that employer were to leave, the town dies). Well, Bangladesh is a ‘company nation.’ Without jobs in apparel factories, people’s lives would not only be damaged, they would, without exaggeration, be ruined, writes David Macaray

    FOLLOWING the April 24 collapse of the Rana Plaza garment factory on the outskirts of Dhaka, Bangladesh, which killed (at last count) 1,127 factory workers, a group of the world’s leading apparel and retail companies got together to adopt a new set of safety rules, in the hope that future disasters (this was the worst accident in apparel history) could be averted.

    While critics are already questioning whether this was more a public relations stunt—giving lip service to a life-and-death problem—than the real thing, it’s too early to say. In any event, several American companies, including Wal-Mart, Gap, Sears and JC Penney, have refused to sign on to the reforms, giving credence to the claim that this ambitious and binding safety agreement does, in fact, have teeth.

    Because the accident is believed to be the result of shoddy construction and management negligence, these highly profitable companies faced a dilemma. Fearing consumer and investor backlash, do they pull out of Bangladesh all together and set up shop in a more expensive venue, demonstrating to their customers that human life means more to them than making a quick buck?
    Or do they weather the storm and stay put, gambling that by signing on to a new ‘safety manifesto’ they can simultaneously demonstrate their humanitarian side while maintaining their lucrative manufacturing base? Although pulling up stakes would be a splashy public relations move, it would prove costly. Bangladesh (formerly East Pakistan) is nothing if not a source of cheap, reliable labour.

    Another fear was the threat of a consumer boycott, which has been discussed by various workers’ rights groups, including some labour unions. These groups believe that the only sure-fire way to get a company’s attention is by hitting them in the pocketbook. But the problem with boycotting a particular brand name or, as has been suggested, any item bearing a ‘Made in Bangladesh’ label, is that you hurt the wrong people.

    Bangladesh’s lifeblood is textiles. We’ve all heard of ‘company towns’ (where citizens are so reliant upon one employer, if that employer were to leave, the town dies). Well, Bangladesh is a ‘company nation.’ Without jobs in apparel factories, people’s lives would not only be damaged, they would, without exaggeration, be ruined. And if this proposed boycott were anywhere near successful, factories would be shut down and jobs lost.

    During its 1978-79 contract negotiations, the AWPPW (Association of Western Pulp & Paper Workers) launched a West Coast boycott of Scott paper products, hoping to pry the company off its increasingly hard-line position at the bargaining table. Back in those days, Scott was viewed as an inordinately stubborn negotiator [Note: in the mid-1990s, Scott Paper was absorbed by the Kimberly-Clark Corporation]

    Alas, the West Coast boycott worked too well. Scott’s sales soon declined to the point where they were forced to shut down two facilities, resulting in the lay-off of several hundred union members. Even though the plants were eventually reopened and manned-up to previous levels, the economic damage done to working people and their families couldn’t be undone.
    Also, let’s be clear. It’s very hard to pull off a successful boycott. Unless, you can present a genuinely compelling narrative, one that has enormous drawing power and resonates with consumers across the board, it ain’t going to work. People simply don’t like to be told what not to buy. They either resent it or remain indifferent to it.

    In the 1990s, we launched a boycott of Snapple beverages after learning that it was a major sponsor of Rush Limbaugh’s radio show. While the boycott was, admittedly, poorly conceived and hastily put together, we were nonetheless stunned when people defiantly announced they now intended to purchase Snapple products—even though they’d never bought them before. Why? Because we told them not to buy them. Go figure.

    If the question is: How do we insure that Bangladesh textile factories are safe? then the answer is: You get yourself an incorruptible, on-site champion of industrial safety. Someone whose sole concern is the welfare of working men and women. In short, you get yourself a union. Bangladesh desperately needs labor unions. Simple as that., May 20, David Macaray, an LA playwright and author, was a former union representative.

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