A massive 7.8 earthquake hit Pakistan today, killing an estimate 150 people, most of which died due to building collapses. The earthquake was so powerful that it created a small new island just off the coast of Pakistan. Yet this disaster pales beside the recent industrial disasters on the other side of India, in Bangladesh, which claimed over 1,000 lives. While the changes in the outsourcing landscape may not be as visible as a new island popping up in the ocean, the changes that are happening in the workforce may be even more significant.
Earlier this year, when multiple industrial disasters led to thousands of deaths in outsourced textile firms, the Bangladesh government and major US and UK firms who used these firms promised to address safety issues. There is still wrangling over how much will be fixed, how long it will take to implement new safety standards and (most importantly) who will pay for new the standards.
Given how US and UK consumers have reacted negatively in the past to unsafe working conditions, everyone has incentives to make improvements as quickly as possible. However, badly constructed buildings and poor fire controls are just part of the problem. The real problem is that firms outsourced to Bangladesh because it was the cheapest place on earth to do the work. But some of the big chains that had their merchandise manufactured in Pakistan seemed to have paid even less than the cheapest price on earth, which meant that corners needed to be cut.
Now a wave of protests, sometimes violent protests, have swept over Bangladesh to address the low wages and unsafe work conditions.
A recent agreement between more than 80 US and European textile corporations that use Bangladesh for outsourcing have entered into a binding agreement to fund safety inspections in factories. However, will they agree to pay a living wage to workers? These changes take time, and changes of this magnitude can take as long as… well… as long as it takes for mountains to grow. Don’t expect overnight change, but seismic changes do happen!
Earlier this year, when multiple industrial disasters led to thousands of deaths in outsourced textile firms, the Bangladesh government and major US and UK firms who used these firms promised to address safety issues. There is still wrangling over how much will be fixed, how long it will take to implement new safety standards and (most importantly) who will pay for new the standards.
Given how US and UK consumers have reacted negatively in the past to unsafe working conditions, everyone has incentives to make improvements as quickly as possible. However, badly constructed buildings and poor fire controls are just part of the problem. The real problem is that firms outsourced to Bangladesh because it was the cheapest place on earth to do the work. But some of the big chains that had their merchandise manufactured in Pakistan seemed to have paid even less than the cheapest price on earth, which meant that corners needed to be cut.
Now a wave of protests, sometimes violent protests, have swept over Bangladesh to address the low wages and unsafe work conditions.
A recent agreement between more than 80 US and European textile corporations that use Bangladesh for outsourcing have entered into a binding agreement to fund safety inspections in factories. However, will they agree to pay a living wage to workers? These changes take time, and changes of this magnitude can take as long as… well… as long as it takes for mountains to grow. Don’t expect overnight change, but seismic changes do happen!