Thursday, May 09, 2013

Proposed Solution for "Slave Labour" in Bangladesh Garments

The death toll has reached more than 1000 (last count is 1033 at the time of this writing) and still more decomposed bodies to come. It has already become one of the worst industrial disasters in the world. Unlike unsustainable and more devastating ideas like boycotting garments from Bangladesh, Nobel laureate Dr. Muhammad Yunus proposed seemingly sensible approaches to solve the dire garments labour crisis in Bangladesh. In his article, first published on The Daily Star last night and just now on The Huffington Pos, this Banker to the Poor rightfully stresses that boycotting Bangladeshi garments would hurt the very poor of this developing nation, causing sufferings to many more millions of Bangladeshi women and men. 

However, the international community cannot just stay mute in the face of the soaring body count from the collapsed building at Savar, Bangladesh. Right pressure points are already in action for which the response from the Bangladeshi government looks like to be going to the positive direction as it has started to shut down the unsafe garments factories. Talks of having better labour rights are in traction as well. These are all positive outcomes after more than a thousand people crushed to death under the shattered concrete and steel. 

Dr. Yunus' two proposals are the following: 

  1. "...foreign buyers will jointly fix a minimum international wage level. For example, if the minimum wage is now 25 cents per hour in Bangladesh, then they will standardize minimum wage for garment industry as 50 cents per hour. No buyer will give any salary below this rate, and no industry owners will fix salary below this limit. It would be an integral part of compliance.
  2. The second proposal is given in an example: "Bangladesh garment factory produces and sells a piece of garment for $5 which is attractively packed and shipped to New York port. This $5 not only includes the production, packaging, shipment, profit and management but also indirectly covers the share that went to the cotton producing farmers, yarn mills for producing the yarn, cost of dying, and weaving as input cost. When an American customer buys this item from a shop for U.S. $35, he feels happy that he got a good bargain. The point to notice is that everyone who was involved in production collectively received U.S. $5. Another U.S. $30 was added within the U.S. for reaching the product to the final consumer. I am asking the question whether a consumer in a shopping mall would feel upset if he is asked to pay U.S. $35.50 instead of U.S. $35 for the item of clothing. My answer is: no, he'll not even notice this little change. If we could create a "Grameen (or BRAC) Garment Workers Welfare Trust" in Bangladesh with that additional 50 cents, then we could resolve most of the problems faced by the workers -- their physical safety, social safety, individual safety, work environment, pensions, healthcare, housing, their children's health, education, childcare, retirement, old age, travel could all be taken care of through this Trust. Bangladesh annually now exports garments worth U.S. $18 billion. If all the garment buyers accept this proposal, then U.S. $1.8 billion would be received by the Trust each year. This would mean that an amount of $500 would be deposited in the Trust for each of the 3.6 million workers. If this amount of fund can be collected, the situation of the workers can be vastly improved. All we have to do is to sell the item of clothing for $35.50 instead of $35. Small unnoticeable addition to the price can do workers."
Yes, there will be challenges to accomplish these two proposals, but I believe it is plausible. Because of 50 cents price hike for a shirt that initially cost $35 (an example), perhaps there will be a few disgruntled discount loving buyers who may shy away from buying that shirt, but as Dr. Yunus proposed that adding a special tag in each shirt stating that it was created by the "happy workers of Bangladesh", may attract more buyers in the end. Consumers are becoming more sophisticated in this blooming light of the information age. If serious efforts are made where a trusted institution looks after the workers' well beings, and Bangladesh government continues to take the necessary actions ensuring the safe and reliable workplace, there is no reason why international buyers would look to other places instead. 

Savar disaster is indeed the result of the dysfunctional politics in Bangladesh. Perhaps the citizenry will indeed come to their senses, at last, as Dr. Yunus and many millions near and far plead, and take the united actions to resolve this atrocious dysfunctionality arising from the vengeful and corrupted politics.