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Mon May 13, 2013
Bangladesh Reveals Uphill Battle For Fair Trade Clothes
Originally published on Mon May 13, 2013 2:24 pm
NEAL CONAN, HOST:
This is TALK OF THE NATION. I'm Neal Conan, in Washington. More than two weeks after a building collapse in Bangladesh, the number of bodies recovered stands at over 1,100. The building housed four factories that manufactured clothing. Bangladesh is the world's second-largest clothing exporter, in part because of a minimum wage of $37 a month, and in part because already lax fire and safety regulations were rarely enforced.
Since the disaster, the government's vowed to implement changes, and retailers have faced considerable pressure. Some, like Sweden's H&M, signed onto a new safety plan for workers in Bangladesh. Others, like Disney, announced plans to relocate.
Advocates press for better conditions, better pay and better labeling so consumers can choose clothes made to higher standards. It's not clear that consumers will pay more for those clothes.
Given what's happened in Bangladesh, we want to hear from those of you who work in the fashion industry, in manufacturing, imports, retail. Tell us what we don't know about this business. 800-989-8255. Email us: email@example.com. You can also join the conversation on our website. That's at npr.org. Click on TALK OF THE NATION.
Later in the program, what we know and what we don't about the scandal at the IRS. But first, safety and transparency in the garment industry. Steven Greenhouse is labor and workplace reporter for the New York Times. He's been covering the developments in the wake of the building collapse last month in Bangladesh, and joins us today from a studio at the newspaper. Good to have you back on TALK OF THE NATION.
STEVEN GREENHOUSE: Always nice to be here, Neal.
CONAN: And this safety agreement in Bangladesh, it seems to be gaining some momentum.
GREENHOUSE: Yes. Today, for the first time in years, there really was a huge amount - the Western companies really stepped up and agreed to take meaningful action to improve factory safety in Bangladesh. And five very prominent European retailers, you know, five of the biggest in the world, H&M and Primark, a U.K. company; C&A, a Dutch company; Indotex of Spain - which owns the Zara brand, the world's largest apparel company - and I'm not coming up with the fifth right now, Neal. I'm embarrassed.
GREENHOUSE: They all signed onto this plan where they - legally binding, enforceable plan where they agree to rigorous independent inspections that will be made public. They agreed to quit - to terminate business with any factory that doesn't correct the violations fairly quickly. And perhaps most important of all, the Western companies are going to help provide the financial wherewithal, the money for the Bangladesh factories to make the fire and building safety improvements that they need.
And until now, many people were wondering: When are the Western companies going to step up? You know, this tragedy was far, far worse than the horrific Triangle fire in 1911 in New York City, in which 146 people died. Seven times as many people died in this horrific factory collapse. And for three weeks, not much is being done. Everyone was wondering: When are the companies really going to do something different to ensure safety? And today is the first day that we see some companies really stepping up and agreeing to take meaningful action.
CONAN: We've also seen the government of Bangladesh take some action, too. They say they're going to raise the minimum wage, and I guess put some teeth into those inspections, which were famously soft before.
GREENHOUSE: Yes, there was also some, you know, from the workers' view, some very good news coming out of Bangladesh today, Neal. The Cabinet agreed to a plan that would make it easier for workers to unionize. One often hears from folks in Bangladesh that one of the reasons factory conditions are so bad, one of the reasons they're so unsafe is that workers are scared to speak up, that efforts to form unions are totally suppressed. You know, a prominent union organizer was murdered last year.
And they say with unions, workers will be more willing to bring complaints to management about unsafe factory conditions. Remember, you know, the day before the Rana Plaza building collapsed - the collapse that led to more than 1,000 dead three weeks ago - the day before, people saw cracks in the building, but the next day, the owners of the factories in the building ordered the workers to go back to work.
Many people say that if the workers were unionized there, if they had a collective voice, if they weren't so scared to speak out, they would not have gone back to work, and hundreds and hundreds and hundreds of lives would have been saved. And also, I should add, on the minimum wage, so yesterday, Bangladesh's textile minister said we, the government, are going to undertake an effort to raise wages because, you know, everyone agrees that, you know, the wages for garment workers in Bangladesh are extremely low, just $37 a month. And you have all these people working, you know, 200 hours a month and making basically, you know, less than 25 cents an hour.
CONAN: But already, there are concerns that this will increase costs, and Bangladesh's competitive advantage, that low labor, is going to convince retailers or, you know, factories to open up somewhere else, where it's cheaper.
GREENHOUSE: That's possible. There aren't many places where it's cheaper, but there are places like - you know, Vietnam is more expensive. Indonesia's more expensive, but they're kind of easier places to operate in. Bangladesh, you know, it's, you know, hard to operate in. You know, there are problems with electricity and things like that. So there are other countries with higher labor costs that are, in many ways, are easier for the Americans to operate in.
And I think with all this so-called reputational risk, with all these disasters, these fires - you know, there was a fire in Bangladesh factory back in November; 112 people died, and I think a lot of companies thought, you know, despite the low labor costs, it just isn't worth the hassle, the embarrassment, the risk to their reputation. So some have been moving out to other countries.
As we've seen, Disney, Disney announced last week, disclosed last week, that it was telling all its licensees to terminate operations in Bangladesh. And I think a major reason Disney did that was it was just too much of an embarrassment, too much of a risk to its, you know, wonderful reputation of trying to be a glowing company that kids and their parents love, and it was kind of caught looking bad when something went - when the factory that burned in November, killing 112 people, some Disney documents, Disney production documents and garments were found there, and that was quite embarrassing to Disney.
Disney denies that it was using the factory, but the production documents and the garments found there seem to indicate otherwise.
CONAN: We want to hear from those of you who work in the garment industry here about what we don't know about this business in the wake of the fire in Bangladesh. Give us a call: 800-989-8255. Email us: firstname.lastname@example.org. Elizabeth Cline is a writer and editor. She's the author of "Overdressed: The Shockingly High Cost of Cheap Fashion" and joins us now from our bureau in New York. Nice to have you with us today.
ELIZABETH CLINE: Hi, Neal. Hi, Steven. Good to be here.
CONAN: And in 2011, as you researched your book, I understand you went undercover to Bangladesh to look into the factories there. What did you find?
CLINE: That's right. So I went undercover as a garment buyer, almost exactly two years ago. And, you know, a lot of the conditions that people are finding out about now were already in place, and the pressures that we're learning about over the past couple of weeks were already there. A lot of fashion companies were rapidly moving out of China, into Bangladesh, because the price of labor was going up in China.
So they were moving to Bangladesh, and, you know, Bangladesh, you know, it's plagued by governmental dysfunction, infrastructure problems. The power was cutting out all the time. And I was hearing from, you know, factory owners that they were dealing with these two different conflicting requests from brands, which was they had to meet all of these fire and safety regulations, but then they also still had to be able to offer a really low price, because that is Bangladesh's competitive edge, is they are the cheapest place to produce clothes.
And you could really sense that they - the factory owners, at least - feared scaring off Western brands if they increased their prices at all.
CONAN: And feared that more than they feared, well, what might happen if they didn't enforce fire and safety standards.
CLINE: Well, I don't think - you know, I don't think anyone - 1,100, what is it, 1,127 people as of today, you know, when you're in Bangladesh, when you're in Dhaka, it's clear that a lot of the buildings just don't look sturdy. It's not a modern - it's not a modern, developed city. So what you've got is Western brands imposing Western standards on a city that's rapidly trying to industrialize and keep up with - keep pace with what these brands are demanding.
But at the same time, the brands aren't really paying what they would need to pay in order for Bangladesh to sort of transform itself and become, you know, emblematic of a safe, ethical place to operate. But, you know, you guys were talking earlier about, you know, what if the brands are scared off by these increases in prices associated with improving the infrastructure there.
But I kind of am wondering: Where is the fashion industry going to go from here? They have been jumping around from country to country for decades, and, you know, I feel like they've exploited, you know, most of the places that they can, and that it really behooves them to stay put and to figure out a way to operate ethically and safely in Bangladesh.
CONAN: Let's get some callers in on the conversation. Again, the phone number is 800-989-8299. And the email address is email@example.com. And we'll start with Lydia, Lydia's - oops, I hit the button twice. There we go, Lydia. Lydia's with us from Baltimore.
LYDIA: Hi, yeah. Well, I just wanted to say I work for American Apparel, and I work on the retail floor, and a lot of times, people will look at the price and pretty much immediately walk out of the store just because it is a lot more expensive. And we do explain to people, you know, when you're buying products that are made in the United States, there are higher standards, and you end up paying more. But only a handful of people have ever said, like, oh, that makes sense and then have, like, purchased a product for a higher price than they expected.
So I think that that's an interesting thing, especially when a lot of these brands are targeted towards much younger populations, and those people just don't have, you know, the money to buy a $100 pair of pants they could get for $20 at Forever 21.
CONAN: And that's right down the street.
LYDIA: Right, exactly. Hard to compete.
CONAN: And so who does buy at your store?
LYDIA: Well, I think that a lot of - well, we - firstly, we have a ton of staff, and I wonder how that compares across the board to other retailers who have lower prices. But we do - we have a really wide range of shoppers, you know, any age. But I think that it's surprising how many young people are able to afford it, even though they do complain about how pricey it is.
CONAN: All right, thanks very much, Lydia. Appreciate it.
LYDIA: No problem. Thank you.
CONAN: And that's - that's going to be an eternal problem with this, Elizabeth Cline.
CLINE: Well, I think that she brought up two really interesting aspects of this issue, is you do get people saying I can't afford better. But then if you look at the amount of money people are spending on clothes, it's the lowest in history. We only spend 3 percent of our income on clothing. And if you look back, like 100 years ago, we were spending almost 20 percent of our income on clothes.
So I think we - it's partially that we don't see it as something worth investing in. And the other thing is we really are convinced that cheap prices are fair. You know, it's like Michelle Obama wears H&M, and we just think that's the most democratic thing in the world. But really, there are all these costs, hidden costs associated with cheap fashion that we're really realizing in the face of the Rana Plaza disaster.
CONAN: If you work in the clothing industry, call. Tell us what we don't know. 800-989-8255. Stay with us. It's the TALK OF THE NATION, from NPR News.
(SOUNDBITE OF MUSIC)
CONAN: This is TALK OF THE NATION. I'm Neal Conan. According to the Commerce Department, clothing prices have been dropping over the past two decades, and American consumers are used to getting a lot of bang for their fashion buck thanks to chains like H&M, Zara and Forever 21, purveyors of so-called fast fashion. These stores are filled with rack after rack of cheaply produced clothing at incredibly low prices - $10 maxi-dresses; $6 T-shirts - racks that are constantly renewed in new styles.
Economists say manufacturers don't want to raise prices on consumers who have come to expect bargains, making the hunt for low-cost countries for production ever more important. But as the disaster at the garment factory in Bangladesh attests, inexpensive clothing can come at an incredible cost. If you work in the garment industry, in manufacturing, importing or retail, call, tell us what we don't know about this business, 800-989-8255 is the number. You can zap us an email, firstname.lastname@example.org.
Our guests: Steve Greenhouse, the labor and workplace reporter for the New York Times; and Elizabeth Cline, author of "Overdressed." And let's see if we can get another caller into the conversation, and this is Marie(ph), and she's with us from Phoenixville in Pennsylvania.
CONAN: Hi, Marie.
MARIE: I used to work in the garment industry many moons ago. I'm now currently on the other side of the garment industry: I'm a buyer. So I buy clothing from people who, you know, sell it to me. But I used to work in the production end of it, and my comment is that, you know, most of these garment companies that - you know, they're being driven by internal margins, gross margins.
And I think the way - you know, I think that what Zara and, you know, H&M are doing, and the Gap in a certain way that they used to do, was that, you know, in volume you could bring down your margins, thereby, you know, putting back some of the money into the actual manufacturing of the product so that you could improve either, you know, working conditions; you could - you know, you can look at.
And a lot of companies are looking at that now, that they are - you know, their green factor and their, you know, what they give back to the community is very, very important to them.
CONAN: The green factor, what they give back to - so how does that affect their profit margin?
MARIE: Well, you know, that you build goodwill with your customer by, you know, taking part in giving back to the community.
CONAN: Steve Greenhouse, is there any indication of how much that goodwill means to consumers?
GREENHOUSE: I think that goodwill means some. You know, I think there's a lot of concern expressed that, you know, one of the reasons retailers are slow to step up and really agree to take firm action to improve safety conditions, working conditions in Bangladesh, is that consumers are not protesting more.
One of the interesting things today, Neal, is that so we've had these five European companies announce they're going to take, you know, these big steps to ensure factory safety in the facilities they use in Bangladesh. Yet no American company, not Wal-Mart, not Gap, not Penney, not Target, has stepped up.
So there's this - it might be that in Europe consumers are more outraged than in the United States. It might be that American companies just aren't as willing to step up as European companies. That's unclear. There's - you know, Elizabeth had some very smart things to say. I just wanted to add one thing.
You know, again, a lot of the experts say it would not cost very much money at all to improve factory safety in Bangladesh. Bangladesh exports roughly $20 billion in clothes each year. It's estimated it would cost about only, you know, 600 million a year for five years to make the improvements needed to ensure factory safety and building safety, and that would just really translate into about a three percent increase in the price of clothes.
So the average garment that is shipped out of Bangladesh, the export price is about three, three and a half dollars. So three percent of that would just be about 10 cents per garment. That is really not prohibitive. I don't imagine that would render exports from Bangladesh uncompetitive with exports from China or Indonesia or Cambodia or Haiti.
So I really think there is room, and I think the big question, and again Elizabeth pointed to this, is that a lot of the companies are just worried that hey, if I agree to pay this 10 cents more per garment, well, if my rival, if my competitor doesn't, that will leave me at a competitive disadvantage, and that is why all these nongovernmental organizations, anti-sweatshop groups, are saying we need a comprehensive plan that everyone signs onto because, you know, everyone will be at equal footing rather than this company saying, well, I'll do this, I'll stick my neck out and do this to improve factory safety, but I'm really worried if I do too much then I'll lose my competitive advantage to H&M or Wal-Mart.
CONAN: And Elizabeth Cline, is there concern that if one company is willing to undercut everybody else, that that leaves everybody vulnerable?
CLINE: I'm sure that that's what they're thinking. But, you know, I was interested, Neal, in what you were saying about, you know, H&M has made a lot of efforts in terms of making their company more sustainable. They have an eco-friendly line of clothing. And I think that labor rights in fashion hasn't really been headline-making for a very long time, and I think consumers had started to think that there weren't these same really bad labor conditions if you look behind the curtain.
And now consumers realize that all these same problems that we've been seeing going back, certainly they were very bad in the late 1990s and early 2000s, are still there. And I feel like we're living in this era of heightened consumer awareness. We want ethically made products. And that's why now that consumers know what's going on in Bangladesh, they're really going to be putting a lot of pressure on these brands to do things differently.
And I think that there needs to be a brand that really puts themself out there and doesn't just say I want to pay, you know, 10 cents more per garment. We need to see a brand that actually restructures their supply chain around transparent, ethical fashion. I think that there's going to be a demand for that and that whatever brand gets to the punch first has potential to, you know, to grow and to build its brand around that.
Maybe I'm being too optimistic, but I mean that's what I would like to see.
CONAN: Well, is there any industry standard that's - I mean, we have a hard time agreeing what's organic or what's fair trade in the food business. Is there any, you know, ethically made label that everybody agrees on?
CLINE: I'm not sure if everyone agrees on it yet. All of this stuff is being worked out sort of as we speak. And it's being - I mean the conversation is just kind of bubbling up overnight. And I know the fair trade movement has definitely been getting called as much as I have in light of all this because people - consumers really do want an ethical alternative, and they really do see this as a turning point.
Consumers don't want any part of this. I know we keep focusing on the consumer that doesn't care, but I think the average consumer does very much.
CONAN: Here's an email...
GREENHOUSE: Can I just...?
CONAN: Go ahead, Steven, yeah.
GREENHOUSE: So my sense is this agreement that these five companies signed onto, and one American company was already a signatory, PVH, which is the owner of Calvin Klein, Tommy Hilfiger, Izod. So there's an interesting part of the plan that Elizabeth kind of addressed, that, you know, the plan will require independent, rigorous inspections that will be made public, which is quite unusual.
So if H&M, if C&A, if Primark, the signers, are using a factory with violations, and the inspectors find violations, that would be made public, and there would be real pressure on the companies to either fix the problems in the factory or leave the factory. And I think that will really establish that these companies are being ethical if they really follow what they've agreed to in this really landmark plan.
CONAN: Here's an email that we have from John(ph) in Westerville, Ohio. Having been a social compliance manager for a major apparel manufacturer, I can tell you not many apparel companies can influence any one factory to make all the necessary improvements. Compliance then becomes more about risk management: not letting your label be the one found in the rubble.
And I wonder, Elizabeth Cline, when you visited some of these factories, was that your impression?
CLINE: Well, I mean, the impression that I got was that was that the brands would be in the factory maybe a handful of times throughout the year: to do the audits and then maybe to set up production. I don't think I encountered another, you know, another Western fashion buyer while I was there.
So I - you know, I can't really speak to how much influence they currently have over their factories, but if they wanted to have more influence, they certainly could. I mean, we see that...
CONAN: Well tell us a little about how it works. I mean if you're, you know, the Smith Department Store Company here in the United States, and you want this apparel made, you contract a company in Bangladesh to - you send them design patterns, and they may also make clothing for seven other companies, seven other retailers?
CLINE: Yeah, it could be that. I mean, it depends on how much - how big your orders are, how big of a company you are. If you're - you know, if you're J.C. Penney or H&M, and you need, you know, a million pieces of something made or 200,000 pieces of something made, maybe a factory really is just dedicated to you and maybe one other company.
I was in a factory in downtown Dhaka that mainly supplied Umbro. And it definitely is a lot easier to control what's happening when you are the sole client or one of very few clients working in a factory. But I mean, we've seen in the United States when...
CONAN: What did that factory look like? Did it look like a sweatshop?
CLINE: No, and I, you know, I don't know if we've seen pictures of what Rana Plaza looked like inside before it collapsed, but we have to get out of this one-dimensional idea of what a sweatshop is. I mean Bangladesh pays $38 a month to its workers, and that is legal. So if you walked into a factory in Bangladesh and saw people working, they're working for poverty wages, but to my - to the untrained Western eye, it just looks like people sitting behind a sewing machine. But...
CONAN: Interesting, also today, Muhammad Yunus, the Nobel Prize winner, said: Wait a minute. We have to be careful not to drive these factories out of Bangladesh.
CONAN: These are incredibly important to the economy and especially to women.
CLINE: Yeah. And I absolutely agree, and that's why it goes to my earlier point, which is that the fashion industry has this terrible legacy of deserting countries once the cost of labor gets too expensive. When I was writing the book, I went to the Dominican Republic, to this community that had a very high rate of unemployment because big brands had pulled out - pulled their production out of the Dominican Republic and moved to, you know, cheaper countries.
And that's really what they've been doing for decades now, which is why I'm saying it would be great to see them really hunker down and stay in this country and do the right thing and help, you know, develop the industry. I think that they've got the infrastructure now in terms of - there are four million garment workers in 5,000 factories, so that's a tremendous amount of production potential. And, yeah, I really do hope brands stay there.
CONAN: Let's see if we go next to - this is Lee(ph), and Lee is with us from West Grove in Pennsylvania.
LEE: Oh, good afternoon. Thank you for taking my call also. Fascinating topic today. I worked in the garment business for 25 years. I went through three companies that all closed due to - were moving overseas to do our production. And it's been very interesting listening to the conversation develop and everyone have their different opinions. One of the things that I think that we might want to toss out there as another idea, as I'm sitting here waiting. Maybe we shouldn't be worrying so much about whether we can raise the standards in Bangladesh or anywhere else, but whether we could return some of those jobs to the United States where, you know, we used to have a thriving garment business.
I watched us go to the Dominican to Honduras to Mexico, 807 programs. We went to South America. Then we went to China. You know, when we talk about where will we go next, you know, the only place we haven't exploited is Africa, and I think there are just too many wars there still for us to be able to go there but...
CONAN: It depends where you go, but, Steven Greenhouse, what about the idea of bringing this - some of this back home?
GREENHOUSE: I think it would be hard to bring the garment industry back home because...
LEE: Sure. Because we don't want to pay those wages anymore.
GREENHOUSE: Well, it's a very labor-intensive type of work, and in the United States workers might get paid $10 an hour. And they're getting paid $10 an hour, it's very hard to compete against workers in Bangladesh or China who are getting 30, 40, 50 cents, even a dollar an hour.
LEE: Right. But if you're talking...
GREENHOUSE: There are less labor-intensive industries like auto or making televisions where I think it would be easy to bring more jobs back, but garment and the shoe industry are extremely labor-intensive. They don't require highly skilled workers so it's easy...
LEE: But, you know, but if...
GREENHOUSE: ...for those industries to...
LEE: ...you're worried about whether your consumers are thinking about are the people earning an honest wage, are they able to, you know, work in a factory that's not going to, you know, be blown apart by fire or some other tragedy. You know, those are things, you know, it's as a consumer, we're supposed to be concerned about what is happening to the person who's creating my garment for $6 apiece. You know, that's...
GREENHOUSE: Don't get me wrong. I'm all for creating more jobs in the United States, but I'm just saying, you know, you generally want to bring back more higher-end, more capital-intensive jobs that pay more, rather than jobs where there are many people in Bangladesh and Haiti who are happy to do it for 40, 50, 60 cents an hour. That's a hard area for us to compete in.
CLINE: Can I - I would - this is Elizabeth. I'd like to comment on that.
LEE: Like 40, 50, 60 cents an hour, I'm not...
CONAN: Lee, Lee, let - Lee, Lee...
LEE: ...really sure that they're earning a living wage, either.
GREENHOUSE: They're not. They're not.
CONAN: Let's - Cindy, go ahead. Elizabeth rather.
CLINE: All right. Yeah. Actually, there has been a slight uptick in domestic garment production over the past couple of years, and there's actually a project called Manufacture New York that's opening in Brooklyn this summer where 100 independent fashion designers are going to work under the same roof as...
CLINE: ...a sewing machine line. And certainly, we're not going to see the garment industry be restored here to what it was like in the 1950s and '60s. It's going to look completely different. It's going to be tailored towards, you know, high-quality, you know, higher-end pieces. I don't mean luxury fashion, but there is a customer for that. There are people that want to buy American-made goods. And in fact, everything I have on right now is made in America because right now I don't trust that I can walk in a chain store and buy something made in China or Bangladesh.
And I want that to change. I do want to be able to walk into a chain store and trust the label there. But, you know, as it stands, I'm much more comfortable buying something that's made here.
CONAN: Lee, thanks very much for the call.
LEE: Thank you.
CONAN: You're listening to TALK OF THE NATION from NPR News. This email from Cindy(ph) - that's why I got confused - I have to admit that I enjoyed low-cost clothing over the past few years, though I thought about it, and on occasion, I've bought clothes marked made in the USA to make a point. But I never thought about people dying over my clothes. Now, I do and will continue to do so. I was shopping recently at Kohl's department store, and a pretty summer dress caught my eye. When I saw it was made in Bangladesh, I made a quick decision not to purchase it and called the corporate office to ask if they had any factory safety standards. They couldn't answer me. I'll keep checking. Let's see if we get one more caller in. And this is Sharif(ph). Sharif with us from Urbana, Illinois.
SHARIF: Hi. I just have a few quick comments on the discussion you are having...
CONAN: Yes. Go ahead, please.
SHARIF: First of all, I would like to say to let you know the garment industry in Bangladesh, it used to be a thriving industry, and the development we've had over the last 20 years, it was not sustainable at all. So it grew so quickly that there were some issues with the infrastructure development. There were the issues with the production safety, manufacturing safety and all those. And since the government was not paying attention to it and they were not enforcing the rules and regulations so the corporations and also the garment industry owners, they all bypassed these.
So I would say the government, the garment industry owners and also the big corporations, they are to blame for this purpose. So if the corporations, if they say that, OK, we would like to ensure that whatever is being made, all the safety standards are being followed, your employees should be properly fed and like, well-paid in terms of Bangladesh standard, and then we will buy from you. And then the United States and also the European commission, they have their trading deals. They have their industry stuff so they can just - they can have a team of a few people who would go and take those like, you know, industry of the garment companies periodically to see those like, you know, standards are being followed or not.
SHARIF: Maybe like...
CONAN: ...I just want to say - we're out of time, but I want to say thank you very much for the call. We appreciate it. And we'd also like to give our thanks to Steven Greenhouse, of The New York Times, who joined us from a studio at the newspaper there, and Elizabeth Cline, author of "Overdressed: The Shockingly High Cost of Cheap Fashion," with us from our bureau in New York. Up next, the scandal at the IRS. Stay with us. I'm Neal Conan. It's the TALK OF THE NATION from NPR News. Transcript provided by NPR, Copyright NPR.