The horrific building collapse in Bangladesh last week, which claimed more than 400 lives, has exposed the rampant violation of norms and the criminal-politician nexus that controls a part of the country’s garment industry. The owner of the building, who apparently lorded over the thugs of Dhaka and whose political connections enabled him to flout building rules with impunity, is facing a groundswell of local protests after being caught trying to escape the country.
Since the building housed garment units supplying to prominent Western brands, the tragedy has also become a global rallying call for activists demanding safety and decent work conditions. Given the scale of the tragedy, the emotional response is understandable. Yet, one must distinguish between Western calls for safety and calls for universal labour standards across countries. The first stems from concerns about basic human rights and must be heeded. But the latter can only be a protectionist device which will stifle export-led growth of many developing countries including Bangladesh, whose chief comparative advantage lies in cheap labour.
Critics of globalization often point to the exploitative wages paid by multinational companies or their contractors in developing economies. But they fail to acknowledge that those not being “exploited” by capitalists in such economies are typically worse off and have even lower living standards. A sweatshop job may be back-breaking but the life it offers is still dramatically better than the life of grinding poverty workers in these economies would otherwise face.
Also, it is unfair to look at the lives lost without taking into account the lives that have been saved over the long term. Over the past two decades, as garment exports drove up growth rates in Bangladesh, the country has been able to invest much more in its social infrastructure. The under-five mortality rate, which was as high as 143 per 1,000 births in 1990 in Bangladesh, slid to 48 in 2010, saving the lives of millions of children.
Bangladesh is not an exception. Across Asia, exploitative capitalists have ended up creating more jobs and pulled more people out of poverty than foreign aid has. It is true that labour standards have often been low in the initial stages but as economies have developed, wages and working conditions have also moved up. China provides the clearest evidence of such a transition.
To be sure, this does not entirely negate the need for minimum standards. The lack of such standards can feed into labour militancy and derail the growth process. But minimum standards must be fixed nationally rather than globally, as part of a social compact that improves working conditions without job losses.