Bangladesh is the world's second largest exporter of garments, after China and the industry is crucial to its economy.
Bloomberg News reporter Mehul Srivastava went to Dhaka to see what factory conditions are like and find out what it would cost to improve those conditions.
Factory owners told him they can produce a pair of jeans under safe and humane conditions if they are paid 90 cents per pair. But buyers consistently ask them to do it for as little as seventy five cents. At those numbers, the factories are forced to cut corners, and owners say they cannot recoup the cost of building improvements.
"What has to happen is there has to be a sea change in how people drive prices down to the bottom."Mehul Srivastava
“There’s a vast variety in the quality of factories over there,” Srivastava told Here & Now. “Some are obviously unsafe, but then there are really good ones also.”
Srivastava mentions a factory owner who spent half a million dollars to set up a sophisticated sprinkler system, in case there was a fire.
Ensuring that factories are up-to-standard is difficult because of the number of players involved in the supply chain, all of whom want to drive down costs in order to increase profits.
Another challenge is that the government of Bangladesh doesn’t have the resources to regulate the thousands of factories, which close and open and move without notice.
“It’s a very chaotic, Wild West industry,” Srivastava said.
There's been increasing pressure to improve conditions for garment workers in Bangladesh since the building collapse that killed over eleven hundred workers in April. It was the worst garment industry disaster in history.
A group of about 70 clothing retailers and brands announced this week they will inspect all the Bangladeshi factories which supply them with garments. Most of the companies are European. American companies including Walmart, Gap, and Target say they will announce their own plans soon.
“I really don’t think consumers have to pay more to get a safer pair of jeans. What has to happen is there has to be a sea change in how people drive prices down to the bottom,” Srivastava said. “They’re not going to get any cheaper by haggling over pennies, but they are going to get a lot more unsafe.”
Reporting by Mehul Srivastava:
- Mehul Srivastava, reporter for Bloomberg News.
This segment aired on July 10, 2013.
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