Working Conditions and Workers’ Rights Become Major Considerations as Work Moves from China to Lower-Cost Nations

A heart-breaking tragedy in very poor nation of Bangladesh may prove to be a game-changer for the apparel manufacturing industry. In April 2013, Rana Plaza, a multi-story apparel factory building collapsed suddenly, trapping workers and resulting in a death toll that exceeded 1,100. This was only one of multiple accidents, tragic fires and other mishaps in apparel factories in recent years, in nations including China and India. In fact, the industry suffered a devastating accident only a few months prior to the April 2013 debacle. In September 2012, more than 300 workers died in two factory fires in Pakistan. In Cambodia, as many as 2,000 factory workers passed out in a short period of time as a result of poor nutrition, heat and/or poor ventilation.

At the same time, workers in many locations are demonstrating, demanding higher wages and better working conditions. The bottom line is that apparel brands simply cannot afford to be associated with unsafe facilities and factory deaths, despite their unending need to keep costs low so that they can be competitive in the challenging global marketplace. The industry is undergoing a significant tightening of demands that customers place on factories in terms of factory safety, child labor, forced overtime and other workplace issues. The end result will be the closing of some poorly run firms, and higher costs at others. These costs will eventually be passed along to consumers around the world.

Bangladesh remains a top choice for Western retailers since it has so many factories already in place and its labor costs are cheaper than any other Asian country. (Garment workers in Bangladesh demanded a rise in the minimum wage in late 2013, a rate that tripled the previous minimum but still remains lower than wages in other nations in the region). In addition, clothing made in Bangladesh has duty-free access to the EU, unlike items stitched in China, India or Sri Lanka. Unfortunately, corruption has been commonplace, with middlemen secretly accepting orders from Western brands and having them filled by uninspected factories.

Retailers have joined together to demand factory inspections and safety improvements, and to fund the costs. A largely European group is the Bangladesh Accord for Fire and Building Safety, which had more than 200 signatory companies in 22 countries as of early 2020 including Mango, Carrefour and H&M. Although groups such as this have accomplished some good, conducting inspections of 2,000 of Bangladesh’s nearly 6,000 factories, a great many problems remain in place.

In early 2015, Western retailers pressured Bangladesh manufacturer Azim Group to agree to a union peace after an investigation found video of union activists under attack at the direction of Azim factory managers. Companies including VF (which makes North Face and Nautica apparel), PVH (parent of Calvin Klein and Tommy Hilfiger), Gap and El Corte Ingles cancelled or threatened to cut orders from the company unless it agreed to halt the violence and come to terms with its labor unions.

Workplace safety, workers’ pay and working conditions in general are of concern to many U.S. and European consumers who buy the final output of such factories. A group called The Worker Rights Consortium in the U.S. monitors factory conditions in overseas plants that manufacture athletic clothing used in college sports and sold on campuses. It publishes reports that call out what it considers to be abusive or unsafe working conditions.

Another group called Fair Trade USA is a nonprofit certification organization that set 334 compliance criteria for workplace safety and reasonable wages. As of early 2019, Fair Trade USA’s certification labels were in 20 apparel and home furnishing brands, including Patagonia and West Elm (a unit of Williams-Sonoma).

Apparel manufacturers and brands that participate in these formal programs aimed at worker safety and better working conditions overall often contribute substantial amounts of money annually to these efforts. The result is often improvements in ventilation, lighting and such fire safety needs as sprinklers, extinguishers and better exits.

Meanwhile, cost-effectiveness and competitiveness must be considered by retailers, designers and manufacturers alike. Apparel manufacturing remains a massive industry in Asia that is founded on low wages and a vigorous supply chain.

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Working Conditions and Workers’ Rights Become Major Considerations as Work Moves from China to Lower-Cost Nations, Business and Industry Trends Analysis

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