"Bangladesh Factory Upgrades Could Cost Consumers As Little As 10 Cents Per Garment"
Since the disaster, many have urged large retail corporations to upgrade the working conditions in the factories from which they source their products. Three hundred large companies had previously refused to sign a pledge to do so before the collapse, citing costs. The need for low prices and fast production is driven in large part by American demand for cheap clothing. So how much would clothing prices rise for the average consumer if all of the costs of upgrading Bangladesh factories were passed on to them?
According to an estimate provided by the Worker Rights Consortium, it could be as little as 10 cents per article of clothing. The group comes to this figure by estimating that building renovation, safety equipment installation, and other related costs would come to about $3 billion, which is says is a high estimate that assumes virtually all factory buildings need major renovations, as some may not. Spreading that cost over five years, it comes to $600 million each year, and tacking 10 cents on to each of the roughly 7 billion garments exported from the country each year would easily cover that cost. After the initial investment in renovations, the group says the costs of maintenance will drop significantly.
Even without these large-scale renovations, there are precautions that could be taken immediately that would cost little. As Kimberly Ann Elliott, a senior fellow at the Center for Global Development and an expert in international trade policy, told Dylan Matthews of Wonkblog, factories could install fire extinguishers, unlock doors, and take other measures that don’t add much to costs but improve workers’ safety.
But it may not be as simple as companies investing more in building renovations and fire extinguishers. As Pietra Rivoli, a professor of international business at Georgetown University’s McDonough School of Business, told ThinkProgress, one of the biggest barriers to safe working conditions is a political infrastructure in Bangladesh that can properly monitor workers and their employers. “In the U.S. we have things like building codes and occupancy permits,” she pointed out. “What’s missing in Bangladesh is that local political infrastructure.” There is also a problem with widespread political corruption. It may therefore be difficult for large corporations to substitute for regulatory bodies.
The response from many large retailers so far has been to pull production from the country altogether. The Walt Disney Company has already announced that it will end production in Bangladesh, and other retailers may follow suit. That could devastate the country’s economy and make life even more difficult for its garment workers. Other Western retailers have indicated that they will instead invest in operations in Bangladesh and look at new plans for factory safety, but so far most of the money pledged will be for relief efforts and few have committed to upgrading factories or tougher inspections.