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Products are cheap, lives are not

ConsumersPlant OpeningsConsumer Goods IndustriesExportsClothing, Accessories, and Shoes

Deadly industrial accidents in the developing world are tragically common, but the recent collapse of a garment factory in Bangladesh that took the lives of more than 500 workers has captured the American public's attention, and no wonder. Knowingly or unknowingly, most Americans at some point have purchased clothing or other items made in Bangladesh, where factory workers labor under sweatshop conditions and employers keep manufacturing costs down by ignoring safety and building code violations. Such skimping on safety is what allows Walmart and other giant retailers to offer the everyday low prices that attract U.S. consumers.

Most Americans aren't even aware of the fact that the bargain-basement prices on T-shirts, jeans and dresses they buy are only possible because somewhere on the other side of the globe, millions of desperately poor men, women and children are risking their lives every day just by going to work. With 3.6 million workers the garment industry is Bangladesh's largest exporter, but the average factory worker there only earns about $40 a month, and every year thousands of them are killed or injured in fires, building collapses and other workplace accidents.

The Rana Plaza garment factory complex outside Dhaka, the capital city of Bangladesh, was one of 4,000 in the country that supply major retailers in the U.S. and Europe, and it had a history of safety and building code violations. Yet the catastrophe there was only the most recent in a series of tragic industrial accidents that have focused attention of the plight of low-paid workers in the developing world who produce low-cost goods for consumers in far-away lands.

Last year, a fire in one Bangladeshi factory that killed 112 people prompted the Walt Disney Co., the world's largest licenser of branded merchandise manufactured abroad, to pull out of the country entirely in order to avoid negative publicity associated with its inhumane labor conditions. In March, Disney sent a letter to thousands of licensees in the low-wage countries where it does business, setting out new safety standards for overseas production.

Disney's withdrawal from Bangladesh has prompted other large retailers, including Benetton, Gap and The Children's Place, to rethink their role in the country and how they will address consumer concerns about working conditions there. The Rana Plaza disaster has forced them to seek a difficult balance between maintaining profitable operations in countries like Bangladesh while guarding their reputations for business integrity and concern for the welfare of workers.

Yet labor advocates in Bangladesh don't want to see the companies leave, nor do they wish Western consumers to boycott the country's products in protest. They fear that if more retailers followed the example of Disney, the country, already one of the poorest in the world, would lose its most valuable export market, estimated at more than $18 billion a year. Instead, workers groups want the Western firms to commit to enforcing safety and construction codes at the factories where their products are made and to bear some of the costs of improving conditions there, such as installing sprinkler systems and fire escapes on buildings.

Such common-sense precautions have long been taken for granted by manufacturers in the developed world. If Western apparel firms want to avoid the kind of consumer blow-back that inevitably accompanies every new report of industrial disaster in their overseas factories, they'll sign on now to measures aimed at making such incidents less likely to occur in the future.

That may cost them slightly more in terms of profitability over the short term. But over the long run, the effort will pay off in terms of protecting their corporate reputation with consumers. Few people want to buy merchandise they suspect may be stained with the blood of oppressed workers in some remote country, if they can help it — even if the price is a few cents lower. The giant retailers are reaping enormous profits from their operations in low-wage countries like Bangladesh; the least they can do is invest some of it into improving safety conditions for the workers who make that possible.

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