How to Put a Stop to Sweatshop Abuse

Yves here. Notice how American retailers for the most part continue to put profit over lives.

By John Miller, a professor of economics at Wheaton College and a columnist for Dollars & Sense magazine. Cross posted from Triple Crisis

The April 24 collapse of the Rana Plaza building, just outside of Dhaka, Bangladesh’s capital city, killed over 1,100 garment workers toiling in the country’s growing export sector.

The horrors of the Rana Plaza disaster, the worst ever in the garment industry, sent shockwaves across the globe. In the United States, the largest single destination for clothes made in Bangladesh, newspaper editors called on retailers whose wares are made in the country’s export factories to sign the legally binding fire-and-safety accord already negotiated by mostly European major retailers. Even some of the business press chimed in. The editors of Bloomberg Businessweek admonished global brand-name retailers that safe factories are “not only right but also smart.”

The business press, however, also turned their pages over to sweatshop defenders, contrarians who refuse to let the catastrophic loss of life in Bangladesh’s export factories shake their faith in neoliberal globalization. Tim Worstall, a fellow at London’s free-market Adam Smith Institute, told Forbes readers that “Bangladesh simply cannot afford rich world safety and working standards.” Economist Benjamin Powell, meanwhile, took the argument that sweatshops “improve the lives of their workers and boost growth” out for a spin on the Forbes op-ed pages.

For sweatshop apologists like Worstall and Powell, yet more export-led growth is the key to improving working and safety conditions in Bangladesh. “Economic development, rather than legal mandates,” Powell argues, “drives safety improvements.” Along the same lines, Worstall claims that rapid economic growth and increasing wealth are what improved working conditions in the United States a century ago and that those same forces, if given a chance, will do the same in Bangladesh.

But their arguments distort the historical record and misrepresent the role of economic development in bringing about social improvement. Working conditions have not improved because of market-led forces alone, but due to economic growth combined with the very kind of social action that sweatshops defenders find objectionable.

U.S. economic history makes that much clear. It was the 1911 Triangle Shirtwaist fire, which cost 146 garment workers their lives, along with the hardships of the Great Depression, that inspired the unionization of garment workers and led to the imposition of government regulations to improve workplace safety. Those reforms, combined with the post-World War II economic boom, nearly eliminated U.S. sweatshops.

Since then, declining economic opportunity, severe cutbacks in inspectors, and declining union representation have paved the way for the return of sweatshops to the United States. This trend further confirms that economic development, by itself, will not eliminate inhuman working conditions.

In contrast, a combination of forces that could eliminate sweatshops is forming in Bangladesh today. Despite the government’s record of repressing labor protest and detaining labor leaders, the horror of the Rana Plaza collapse has sparked massive protests and calls for unionization in Bangladesh. In reaction, the government has amended its labor laws to remove some of the obstacles to workers forming unions, although formidable obstacles remain (including the requirement that at least 30% of the workers at an entire company—not at a single workplace as in the United States—be members of a union before the government will grant recognition).

Meanwhile, 80 mostly European retail chains that sell Bangladesh-made garments have signed the legally binding Accord on Fire and Building Safety in Bangladesh. For the first time, apparel manufacturers and retailers will be held accountable for the conditions in the factories that make their clothes. This “joint liability” aspect, a long-held goal of labor-rights advocates, is precisely what makes this international accord so important.

Negotiated with worker-safety groups and labor unions, the five-year accord sets up a governing board with equal numbers of labor and retail representatives, and a chair chosen by the International Labor Organization (ILO). An independent inspector will conduct audits of factory hazards and make the results public. Corrective actions recommended by the inspector will be mandatory and retailers will be forbidden from doing business with noncompliant facilities. Each retailer will contribute to the cost of implementing the accord based on how much they produce in Bangladesh, up to a maximum of $2.5 million over five years to pay for administering the safety plan and pick up the tab for factory repairs and renovations. The accord subjects disputes between retailers and union representatives to arbitration, with decisions enforceable by a court of law in the retailer’s home country.

The signatories include Swedish retailer Hennes and Mauritz, which has more of its clothes made in Bangladesh than any other company; Benetton Group S.p.A., the Italian retailer whose order forms were famously found in the rubble of the collapsed Rana Plaza factory; and Canada’s Loblow Companies, whose Joe Fresh clothing was also found at Rana Plaza. Together, their clothes are made in over 1,000 of Bangladesh’s 5,000 factories.

However, only two U.S. companies, Abercrombie & Fitch and PVH (parent of Tommy Hilfiger and Calvin Klein), have signed the accord. Walmart, The Gap, J.C. Penney, Sears, and the rest of the major U.S. retailers doing business in Bangladesh have refused. The industry trade group, the National Retail Federation, objected to the accord’s “one-size-fits-all approach” and its “legally questionable binding arbitration provision” that could bring disputes to court in the highly litigious United States. Several of those retailers cobbled together an alternative agreement signed so far by 17 mostly U.S. retailers.

But their “company-developed and company-controlled” plan, as a coalition of labor-rights groups described it, falls well short of the European-initiated plan. It is not legally binding and lacks labor organization representatives. Moreover, while retailers contribute to the implementation of their safety plan, they will face no binding commitment to pay for improving conditions. An AFL-CIO spokesperson put it most succinctly, “This is a matter of life or death. Quite simply, non-binding is just not good enough.”

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  1. as promised

    Each time you slip one of your cheap shirts over your head do you wonder if those who made it were killed? I do. We point fingers at the big box stores but look at the labels of almost all your clothes. Different countries, perhaps, but same conditions.
    Not long ago I bought a long-sleeve T at Costco. Not because I needed it, byt because it was “Made in Canada”. It was good quality and cost no more than than items around it. I was so proud I even posted a pic of the tag on Twitter and Facebook.
    It’s about CHOICE – of the consumer, retailer and manufacturer. We can end this.

    1. rusti

      I’ve been reading a bit lately about rubber tappers in the Amazon and the brutal colonizations of Africa seeking ivory and rubber and it’s made me think about this a bit more. The bubble most of us live in was unquestionably built on the ravaging of lesser developed areas for cheap labor and raw materials. It’s certainly not limited to clothes, virtually everything we use on a daily basis, the energy or labor used to create it was the result of someone getting the shaft.

      It’s all well and good to post a picture of the tag of your Canadian-made shirt on facebook, but there are about a thousand ways that other people were exploited to develop the technology to make your posting possible and the means for you to do it relatively cheap. Similarly exploited factory workers that made the electronics, all the subsistence farmers who will suffer from the carbon emissions that went into constructing / powering your device and the server hosting your message just to begin with.

      Some of us are willing to pay a premium for a shirt, but how far are we willing to dial back our lifestyles to ensure that workers everywhere have a safe workplace and a reasonable standard of living? Especially when improving their lifestyles puts them in direct competition with us for those limited natural resources. We have at the very least, a collective short-term material incentive to repress others. We just have trouble recognizing and admitting it, and “free market institute” windbags like the ones quoted in the article feed us a story that reassures us that not only are none of these things problems, but our actions are more benevolence than exploitation.

      Boycotting clothes manufacturers might affect incremenetal change, but it doesn’t address root issues. The top-down green revolution approaches the MMT / Green Party crowds (or however the factions identify themselves) call for is a much more appropriate response. It would take some monumental changes in the direction the world is headed to find the political willpower to make anything like that possible though.

      1. William

        So true. Only changing the way business is done, what is acceptable and lawful, will change conditions for workers. To boycott might feel good to be punishing one brand, but accomplishes almost nothing, and only helps their competitors, including those who quickly figure out ways to market their products as worker-friendly when in fact they are not, and there in no way to ensure they are accountable to their claims. I wonder how much the “Made-in-Canada” apparel is actually made there? Does putting a tag on a finished garment constitute “Made-in?” Putting on a design? Does the fabric have to be made in Canada?

    2. Otter

      Yeah! What rusti sez… No matter what you do, you are guilty, guilty, guilty. And also your clothes are too revealing.

      Don’t bother trying to do anything helpful. Big Brother will send little rusti around to make you feel bad. You made him do it.

    3. Otter

      I hope ‘as promised’ comes back.

      I hope she/he posts more pics of clothing tags.

      Even if she/he isn’t saintly enough for rusti, a scattering of tags on facebook and twitter will send more fear into corporate boardrooms than all the purists and sockpuppets in the world disparaging them on NC.

  2. Colinjames

    Capatalist swine! If a 1000+ deaths aren’t enough to make those companies see the light, as it were, I don’t know what will. Oh yeah people boycotting those companies. Only $$ will get their attention. Lost $$, specifically.

    1. psychohistorian

      So why is it that Yves is one of the only places to read and discuss this societal travesty?

      If there were religions that really walked their talk we would not have all the killing done in Amerika’s name all around the world let alone sweat shops like detailed here…..great myth but horribly compromised in our day….where are the religious leaders that have their congregations out in the streets protesting?….a pox on their houses!

      Inequality of attitudes towards life are an evil connected with the plutocratic led class system of “Western civilizations”….with an emphasis on the lack of civilization here.

      And continuing to beat my steady drum, the reason most plutocrats have any power is through INHERITANCE that none talk about, let alone clamor for changing the rules about.

      Uncontrolled inheritance is the Gordian knot that underlies the class system in our world and needs to be addressed if we stand any chance of making our world less unequal and more moral….its inherent immorality is never questioned, nor portrayed as the base evil it is and has been for centuries now.

      Why is that and what can we do about it?

      1. ambrit

        Dear psychohistorian;
        Well, if my memory serves me well, the last time America had an anywhere near equitable tax and inheritance system was when we had to pay for the Great Depression 1 and The Long War Part 2. Both those conditions are in effect now. We’re in the middle of Great Depression 2 and Long War 2. Someone propose returning to Eisenhower Era Tax and Inheritance standards on the floor of Congress, today! Let’s get this ‘debate’ started!

        1. psychohistorian

          The 95% tax rate you speak of was for income not wealth…can we have 95% for wealth also?

          I posit that a return to what you propose will then find your kid’s kids having to face down the inheritance plutocrats yet again.

  3. Ep3

    Yves, I fully support improvements in sweatshop conditions. But what I want to discuss here is where we have been and where we are going, from the perspective of the employers. In the 1900s it was cheap to make the garments here. But as the unions rose, those factories for a little while paid better wages but then closed up and moved to Asia in search of cheap labor.
    So what happens from here? If the trend continues, those workers will gain power, get union benefits, and strain the profits of the businesses (not really). This will then cause the shop owners to begin searching out their next source of cheap labor. My question, where will they go? Africa maybe? But from there, where? Will they do as the auto companies have done, and force local taxing authorities to subsidize new plants in the US? But eventually, will they run out of cheap labor to exploit? Or will we find life on mars, full of uneducated poor folk willing to work in terrible conditions?
    To me, this is just as important as protecting current workers; protecting future workers. We need to get ahead in the game. Make the businesspersons come to us for labor. Make them adhere to our requirements for clean air/water, safe working conditions, good pay and benefits.

    1. yata

      If you’re worried over which governmental authority will support the relocation of inustries, you could point to the UNHCR, and relaize they have essentially provide the housing for this new labor force and imagine how excited the refugees will become with the idea of working from home…

  4. seabos84

    we need to add to the price of the products the costs for providing affordable housing, secure health care access, retirement, non-junk-University-o-fPhoenix retraining & unemployment, 40 hour work weeks and safe working conditions


    we need to put in jail, for 10 years at a minimum, all managers who figure out ways to pay people and treat people like disposable crap.

    We need the BBQ economy – do the jobs support families so that people can spend time off with family and friends having BBQ’s? Oh yeah – to you pig headed greedy selfish slime – WHY are there more million and billionaires in the USA than in any similar sized population of poor people? Cuz we had a BBQ economy, for a while. The more people pulling family wage jobs = the more living well = the more ways to get rich. period. over.


  5. Ulysses

    Students at Cornell and UW Madison started an organization called “United Students against Sweatshops” which has been growing by leaps and bounds, and has done great work on this issue. They used boycott power to get some suppliers of college apparel to end industry abuses in Honduras and elsewhere. For more information on this:

    Thanks for bringing attention to this issue!!

  6. Walter Map

    Does anybody else get the feeling that the world is at the mercy of bloodthirsty pirates, or it that already a foregone conclusion?

    1. ambrit

      Mr. Map;
      Even back then, a lot of those “bloodthirsty pirates” were legally sanctioned bloodthirsty privateers. Only, as a rule, when these legal private employers of lethal coercion started preying on their previous sponsors was anything done. I’m afraid that it will probably end up being only when stark ruin stares the enablers of todays privateers in the face that anything gets done.

    2. Beppo

      If you read later feudal (or whatever you want to call it) European history, there are endless accounts of nobility rampaging in endless petty feuds, killing and raping peasants without repercussion.

      Our contemporary world of borderless oligarchs is the same, except on a larger, more impersonal, and much more brutal scale.

  7. petridish

    The search for cheap labor, free from minimum wage or safety or environmental regulation, has taken its toll on the poor, wandering, stateless multi-national manufacturers. Their endless hunt for ever more desperate populations to exploit must end.

    And so the TPP was invented.

    Make all the humanitarian rules you want, the TPP will override them, and allow those corporations to collect from you for having made them.

    Boycotts are the only way. Until, of course, a law is made that mandates specific purchases from specific industries in order to maintain their profitability and prevent their extinction.

    Obamacare is the first of such “laws.”

  8. allcoppedout

    It is still possible to buy clothes cut and sewn in the UK, usually in sweat shops employing illegal labour. I have given up on capitalism – I was never sure we had moved on from feudalism and Domesday Book economics. There is no reason at all to compete on wages and our notions of comparative advantage are tosh. I can’t see an answer other than torches and pitchforks followed by setting the cops on the rich.

  9. F. Beard

    By all means let’s eliminate sweatshops and firetraps (At least SOMEONE (maybe several, including a banker or two) rich should have swung for the Triangle Shirtwaist Fire, I’d bet).

    But let’s not forget the root cause, shall we – the government-backed banks that allow some, the so-called creditworthy, to steal the population’s purchasing power and then buy or build shoddy workplaces where they can be paid with their own stolen purchasing power?

    But why do I even try? It would easier for me to convince most of you to become Christians than that we should have ethical money creation.

    1. psychohistorian

      Your ongoing focus and claim that the bankers are the root cause is appalling.

      It also makes your ignorance and attachment to your book so blatant. Because your book only talks about money changers it does not reflect the reality that the plutocrats have outsourced that function.

      You are sounding more and more like TV addicts that learn everything they know and how to think “properly” from watching it.

      1. F. Beard

        You should ask yourself how labor and capital became distinct in the first place when all of humanity started out as labor?

        Why do we even need credit? Is it not because the equity we would have with a just money system has been stolen?

        Money-lenders? If only! Then the poor and other non credit worthies might actually be able to save instead of being relentlessly ground down.

        But thanks for verifying I’ve hit a nerve.

      2. Walter Map

        Agreed. Money, credit, and banking do not seem to be unethical and/or immoral by their very nature. Like many things which are inherently values-neutral the problem lies in whether and how they have been corrupted. And to be sure, these days money, credit, and banking have been horrifically corrupted.

        Mr. Beard will probably continue to promote his system until it becomes clear to him that it also can be corrupted. It seems the root problem in not in the choice of system but in preventing or minimizing corruption.

        Humanity has never come close to a really effective means of managing the malignant ethics of sociopaths. Unfortunately the power that humanity now has to destroy itself could very likely, if not certainly, make that failure suicidal.

        1. F. Beard

          Money, credit, and banking do not seem to be unethical and/or immoral by their very nature. WM

          Don’t put words in my mouth, please. It’s government-backed banking I object to. 100% private banks* would be ethical, assuming they could survive to any great extent.

          *After a universal bailout till all deposits are 100% backed by reserves.

          1. skippy

            “It’s government-backed banking I object to.”- beardo

            This leads back to the corruption issue, an institution corrupted by corporations and via its owners. If you don’t address the fundamental problem your just jerking off.

            skippy… Banks are just silos for public – private transactions, with out banks, it just goes totally black box. IMO they would actually love that opportunity to occur.

            1. F. Beard

              1) Government-backed banks are INHERENTLY corrupt REGARDLESS of who runs them since NO ONE is worthy of his neighbor’s stolen purchasing power.

              2) You appear to subscribe to the “loanable funds theory” which has been discredited.

              3) The place for most financial transactions would be a Postal Savings Service since the monetary sovereign is the ONLY proper provider of a RISK-FREE storage and transaction service for its fiat so government deposit insurance and the Fed should be abolished some time after that Service is set up.

              1. skippy

                1. “stolen purchasing power” = gibberish.

                2. “loanable funds theory” = more gibberish

                3. “RISK-FREE” = gibberish Sq’ed

                skippy…. what part of – Fob Off – till you clean up your messes… do you not understand… seriously.

                1. psychohistorian


                  Look at this last forth and back with the faith breather. He/she/it never responds to the particulars around the fact that the bankers are employees of the plutocrats. What sort of specious “communication” can you have with somebody/thing that does not operate by rules of discourse you and I take for granted.

                  F. Beard is no longer worthy of my bandwidth and any attempts to save its humanity are wasted, IMO. I admit to getting hooked by his inane bible BS but I am going to try and not feed the faith troll.

                  I hope to have other areas where we may consort in comments…….namaste

                  1. skippy

                    It feels like conversing with a FuaxNewbs talking head… with round the clock infomercials peddling the “Power to Prosper” meme.

                    I mean did they just miss the last 40 years[?], GWB??, endemic fraud through out the entire corporate sector???, captured government????, and its all the Banks fault?????

                    skippy… Rush* (*snicker) Limbaugh spaced out on gear and giving non free market breathers gawds wrath is a personal fav if mine. Always fobing off their failures on everyone else.

  10. yata

    Use it up, wear it out, make it do, or do without.

    If you can remember to bring your purse or wallet, you can also remember to shop for items produced in the US. It’s as simple as remembering.

  11. Thomas McGovern

    Aren’t these efforts by Americans to control working conditions in other countries imperialistic? Isn’t it just another example of Americans trying to impose their values on what are, or are supposed to be, sovereign nations? Are the people of Bangaladesh so indifferent to human suffering that they will not make changes to correct the problem of unsafe buildings? How would Americans feel if other nations tried to impose their standards and values on us? I would characterize these efforts as an example of do-gooder liberal fascism.

  12. kemo sabe

    Stop buying new clothes. If possible, buy used. If not, buy only made in USA. Same applies to other products. Stop excessive consumption.

  13. TomDority

    Follow the freakin money – the guy who built the place – a local – the landlord – is skimming the most money out of the equation – pay for substandard building – cut corners and all, then get a desperate population some dollars for slave labor rates and loot from your employees the wealth they created – your competitive advantage comes from lowering your costs of land and building on the land (a bribe of government officials to overlook life safety violations in the construction of the building is cheaper than worrying about the fucking slaves) – cause, your not just looking to profit off the wealth creation your workers produce but, looking to drive a higher profit margin by hoping to extract land value appreciation into your own pockets.

    any wealth production requires – Land, Labor and capital (machines, buildings, machines etc.) –
    It just shows how destructive the neo-economic fantasy has been by; devaluing and blaming labor for our ills – how taxing labor into poverty and all the while, has de-taxed economic rent taking and confused money/financialization as wealth – and rewarded money/financialization over human life.
    Same old game, the elites/plutocrats/psychopaths prey upon the wealth creators and the real employers to extract money from those who created wealth. We saw their commercials – you know the ones where they deemed themselves as hard assed, movers and shakers – the financial services commercials designed to lend cred to their blood sucking/ rent extracting/ vulgar / cowardly / chicken shit ways.

    You tax and restrict the practises that are destroying life on this planet – return to a more just revenue system and penalize the predators – – you just might find that we would be back on track to survive as a species.

  14. bob

    Sweatshops do help the countries that otherwise would have nothing. However, that does not mean that unsafe work conditions are a good idea. One doesn’t have to bring OSHA in to make sure the buildings your company uses won’t collapse, or are filled with noxious fumes.

    Even a staunch free marketer can’t defend this. A worker can, on their own free will, decide if 20 cents an hour is a wage they want to take. That’s fine and dandy. However, said worker is probably not aware of the hazards in their workplace. Thus the responsibility falls squarely on the employer.

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