The Human Cost

How high a price do we pay for ‘cheap’ clothes?

Bangladesh came to the world’s attention in 1971 when, after a bloody, atrocity-filled nine-month civil war, the country of East Pakistan seceded from the Islamic Republic of Pakistan and established itself as a sovereign nation. At the end, there were 10 million refugees and a displacement of 30 million.

Westerners first took notice when George Harrison organized the Concert for Bangladesh at New York’s Madison Square Garden in August 1971. Followed by a live album, a boxed three-record set and concert documentary, the effort eventually raised $12 million in relief.

Harrison also wrote and performed the song “Bangladesh,” with the opening lyrics: “My friend came to me with sadness in his eyes/He told me that he wanted help before his country dies.”

Bangladesh still is a troubled country and Westerners absolutely know what it is, following a number of fires and the April 24th eight-story Rana Plaza complex collapse that killed more than 1,120 people (it housed at least five garment factories). For those clothing manufacturers who chose to outsource, the risk was apparent—those cheap clothes come at a high price.

Risk management is too often reaction rather than action—and that’s dangerous. We can talk all day about supply chain risk and often do, but what I’m talking here about are human beings. I’m talking here about Bangladesh but the lessons can be applied to any low-cost manufacturing country.

Bangladesh has about 5,000 garment factories that employ more than 4.5 million people—80 percent of them women. Many come from rural villages and have little education. They work for about $37 a month. Think about that when you’re staring at your closet tomorrow morning, wondering what to wear.

Action, not reaction

Once again, disaster struck and what should have been preemptive became response. On May 13th, less than three weeks after the Rana Plaza disaster, several of the world’s largest apparel companies agreed to a plan to help pay for fire safety and building improvements. At the same time, the Bangladeshi government pledged to raise wages for garment workers and change labor laws to make it easier to form trade unions.

Both of those moves are 180-degree shifts. Manufacturers often said the issues weren’t their problem but those of the factory owners. And the government had shown little interest in protecting worker rights.

Among those signing the agreement were Swedish retailer H&M, the largest purchaser of Bangladeshi-made garments, as well as Dutch retailer C&A, Spanish giant Inditex and British firms Primark and Tesco. In the U.S.?—Only PVH, the parent company of Calvin Klein, Tommy Hilfiger and Izod signed on (as I write this in mid-May). It also promised $2.5 million to underwrite factory safety improvements as part of the plan. Admirable, but late.

What about the Gap? Walmart? The Gap did not sign because it objected to the agreement being legally binding. Really Gap? Way to accept responsibility. The company also said it hired a fire inspector and pledged $22 million in loans for factory improvements. Loans? How noble.

And how many lives would that $22 million have saved with action instead of reaction?