The real price of your clothes

The recent tragedy in Bangladesh, where a collapsed building left behind 1000 people dead, has oulined that our cheap clothing is at the expense of human rights.

Thousands of people were working at several factories in a building without sufficient security measures and poorly preserved. The conditions for the workers were extremely precarious.

All this would have been overlooked if the Rana Plaza had not collapsed. But the magnitude of the tragedy (1000 dead and counting) and the massive demonstrations on May Day in Bangladesh, have made it impossible to ignore the fact any longer.

Big retail names like Zara, H&M, Benetton and Wal Mart have been involved. As happened with Apple and its factories in China, fashion giants outsource to other companies in Asia to make the clothes that they then sell across the world.

It is one of the effects of globalization. Today, it is cheaper to send raw materials and finished products to go around the world several times than to make them in factories in Europe or America.

Competition is also fierce. A few years ago China was the main recipient of these contracts. But since the standard of living of the Chinese has increased, their wage demands have risen in line with it. Chinese wages are growing around 10% per year and this increase means lower profit margins for textile giants.

That's where, since the beginning of the credit crunch crisis, other countries like Bangladesh have entered in the race. Without as many legal obstacles and with wages of around a dollar a day, these countries are a much more appealing destination for large retail companies.

The way of doing things, however, does not change. They hire contractors and subcontractors. Sometimes the subcontractors hire even more subcontractors. In fact New Wave Style, one of the companies involved in the Rana Plaza disaster, got its first big contract when a contractor for the Canadian company Loblaws could not cope with an order and appealed to them. From there, everything grew until disaster struck.

The chain of contractors and subcontractors is dark. And the more you go down the chain, the less control you have over what happens. Companies such as Primark claim to have under control the companies they hire. But the truth is that it is impossible to be aware of the whole process when it is so complex and confusing.

The conditions are extremely precarious for the workers. Overtime is common to be able to meet deadlines, but it is rarely paid. The workplaces are often poorly conditioned. Too much heat, little ventilation and buildings without sufficient security measures are the norm.

The unions tried to improve those conditions imposing independently controlled safety plans, but the big brands rejected the plan. They needed a plan outside of the corruption circle between factory owners and the government. But it was too expensive and complex and retail companies said no.

It is not the first time a disaster strikes the industry. In fact fashion giants have a long history full of stains. From the use of child labor for sports brands manufacturers to the recent fire in another factory (also in Bangladesh), scandals are many.

That’s why crisis management teams in brands like Loblaws and Primark have been so quick to tackle the tragedy. Immediately, they announced that they will compensate the victims. Others like Benetton have reacted slower. Even the EU has jumped into the wagon.

Zara in turn, has increased its positive presence in various media, with stories that illustrate, for example, how it employs young people in Spain, a country battered by youth unemployment.

The general trend of the industry has been a PR offensive. Big brands know that their main battle is being fought in the streets of Paris, London or New York, with the public opinion at home. After all, they are also to blame in part for wanting cheap clothes. They are the ones who buy the clothes and they are the ones they need to convince to bury all this in the past –until the next tragedy.

Governments and workers in Bangladesh, on the other hand, are too afraid they may lose all they got. The wages of workers in these factories, despite being extremely low, are sometimes the best that can be dreamed of in these countries.

Meanwhile, export remittances provide a generous source of revenue to governments. So much so, that the government of Bangladesh has asked the EU not to impose sanctions or regulations on his country. They fear that, like it happened in China, the factories will relocate to a less problematic country.

However, Bangladesh would probably be better off looking towards Vietnam. The communist country has shown that it is possible to get the production for multinational brands and improve the living conditions of workers all at the same time. But that demands change and courage to do it.

And probably as well, less profit margins and more expensive clothes. But not much. With as little as a 25cents increase in the price of our clothes, we could pay for better working conditions in Bangladesh. Will it happen?