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      Tuesday
      May142013

      Is Reform Possible in Bangladesh?

      This article appeared at USA Today on May 16, 2013.

      With the death of 1,127 innocent garment workers, mostly young women, in a Bangladesh factory collapse, there is hope that conditions will finally improve in the sweatshops where garments are manufactured for Western consumers.

      Count me as a skeptic. The capitalist dictum of comparative advantage, written long ago by Adam Smith and David Ricardo, encourages countries like Bangladesh to showcase themselves as low-wage havens with few if any regulations or unions. Recently, Western multinationals have been shifting to Bangladesh from China – China! Comparative advantage turns out to be a race to the bottom, and the bottom is hell.

      Corporations like the Gap and Wal-Mart benefit from the systemic corruption of places like Bangladesh and Pakistan. How is it possible to “reform” a country where low wages and no safety regulations are the main attraction to Western investors? The current effort by some Western companies to pay for factory safety and improve working conditions may be well intended. It is time for truly independent auditing as well, instead of the companies paying for internal monitors. But these are token remedies that run against the grain of the push toward the bottom. 

      Only the threat of corporations actually pulling out, as the Disney Corporation has done, will get the attention of decision makers. If and when Bangladesh implements reforms that actually improve worker safety and wages, then and only then should American corporations consider reinvesting.

      Sweatshop conditions were reformed in America after the Shirtwaist-Triangle fire of 1911, and became a bedrock of the New Deal. The garment industry then moved to the southern “right to work” states to escape labor laws. When the civil rights movement arose, the companies exported their manufacturing to South Asia and Central America. The lesson of this history is that the New Deal labor policies should be globalized in an enforceable code of conduct. Global trade agreements now protect corporations against piracy, but not teenage working girls against lethal factory settings. 

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