In Response To Tragedy, Bangladesh May Alter Labor Laws

May 14, 2013
Originally published on May 14, 2013 1:19 pm
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Rescuers in Bangladesh have now ended their search for victims after the collapse of a garment factory building there. The death toll stands at more than 1,100 people. The dead are mostly women who came from rural villages and are in general poorly educated. This tragedy came at a time when the impoverished nation was making some progress in creating jobs for its population, and some hope this incident will be a call to action to protect the rights of laborers. The Bangladeshi government is now exploring raising the minimum wage. That would go from up from $38 a month - the lowest in the world. The government might also allow garment workers to form unions. Mehul Srivastava is a reporter from Bloomberg News and he's been following this story and joins us. Good morning.

MEHUL SRIVASTAVA: Hi, good morning.

GREENE: So, Mehul, how significant are these changes to labor laws, if they actually do happen? You know, one being the ability for workers to form unions.

SRIVASTAVA: These are all really small steps but all headed in the right direction. The boom period in Bangladesh's garment industry is only about five or six years old, since 2005. And they've not been able to unionize there at all because the government's rules are very complex in that if you want to join a union, you got to get 30 percent of people in the factory to join. And then the factory owner gets the list of those 30 percent people who've agreed to join the union and they can then fire those people. So this change allows unions to form better but there isn't the culture of unions. There isn't the culture of union leadership. There isn't the cultures of going on organized strike. So these changes, they're in the right direction, but it'll be a while before you'll see the benefits of that.

GREENE: And Mehul, as small as these changes might be, it sounds like some big Western retailers, including H&M, have signed a deal to help protect labor rights. I mean could this be a sign that this tragedy, you know, might spur some action?

SRIVASTAVA: This is some of the best news that's come out of this tragedy. H&M and PVH, which makes Tommy Hilfiger and Calvin Klein, etc., they've been pushing for an agreement for quite some time that 'd be legally binding upon themselves but also upon some other retailers to invest more on safety standards, to be legally bound in case these safety standards weren't held. They got a couple of people to sign up, but unless there's a level playing field of all the retailers in the world, especially all the big retailers in the world, signing up, it wasn't going to go into effect. Well, since this tragedy has happened, that decision has been revisited. And since yesterday we've heard that a large number of European retailers have agreed to join this agreement. H&M, which is based out of Sweden, is huge here in Europe, they've signed up definitely. And that's - they're the biggest buyers out of Bangladesh. This gives that agreement a massive amount of clout. It gives it the ability to bring about significant change. But of course they've just signed it now and they need other people to sign up. It'll be a while before those effects flow downwards. But this was really good news.

GREENE: And H&M, of course, a familiar brand in the United States as well. I guess one question I have is, you know, this whole model has been that these retailers can buy in a country like Bangladesh so cheaply, because labor's cheap. It does provide jobs in that country. It does mean low prices for consumers who buy the clothing. But could that model be sort of all broken if these retailers have to start investing more, you know, to operate in a nation like Bangladesh?

SRIVASTAVA: Well, you know, some of the estimates that we've heard over time are that it really won't cost that much over time on an industry that's this large. We're talking about 18, 20 billion dollars a year exported out of Bangladesh to Europe and the U.S. And the cost of improving these four or five thousand factories has been estimated anywhere between three or four billion dollars. That's about 10, 15 cents per garment out there. So the costs are not prohibitive from the estimates that we've looked at.

GREENE: So changes could take place without a huge change in this whole model?

SRIVASTAVA: I mean you could pay $6.50 for a bikini instead of $6.

GREENE: We've been talking about the story in Bangladesh with Mehul Srivastava. He's a reporter for Bloomberg News and he joined us from London. Thanks so much.

SRIVASTAVA: Thank you. Transcript provided by NPR, Copyright NPR.