From the TUC

Do unions really want job-destroying wage rises in Bangladesh?

03 May 2013, By

Garment workers

Garment workers in a Bangladesh clothing factory. Photo: Jankie

In the aftermath of the death toll in Bangladesh’s worst ever factory disaster last week, much has been written (including by us!) about what needs to be done to prevent further tragedies. Most attention has focused on what the Bangladesh government and multinational clothing companies should do, with a fair amount of blame being mis-directed (more on that in another blog) at cash-strapped, bargain-hunting western consumers.

One element of the online debate has been about what sort of terms and conditions of employment are appropriate for workers in Bangladesh’s Ready Made Garment (RMG) sector. The usual canard about not pricing them out of their jobs has been raised, so I thought I should address that specifically, because it’s being used to attack unions’ and campaigners’ attempts to demand better wages and safer workplaces.

The argument runs like this. The only reason multinational textile firms place orders in Bangladesh is because the price is low, due mostly to very low wage levels. If those wages go up too far, the companies will stop placing orders and people will lose their jobs. That will leave them worse off than they are now.

Some people have argued this aggressively, resisting any increases in wage levels, and insisting that the situation in Bangladesh may be bad, but any pressure for change would only make things worse. The Prime Minister of Bangladesh essentially argued that case when she was interviewed on CNN yesterday. No wonder it’s reported that the Government has apparently expressed displeasure at the arrival of an ILO mission who are taking a tough line (the Government has also refused CNN journalists visas to enter the country, as they have done in the past with our own union, Unite!)

Others argue a much less strident line. On the Guardian Development pages earlier this week, New York-based Maha Rafi Atal argued that campaigners were seeking to impose western wage levels, which would destroy the livelihoods of the workers concerned. She did, let me be clear, spend far longer rebutting the claims of the sweatshop apologists in the right wing media like Alex Massie in the Spectator.

But Maha also hit out – for balance? setting up a straw man? – at campaigners against sweatshops, writing that:

“Pushing not only for raised safety standards but also for wages that match those in the developed world is a tactic that will have the effect of shutting down developing world manufacturing altogether.”

She cites, as evidence, a blog by US academic Erik Loomis, where he argues that US corporates should be held to US labour standards wherever they operate, and suggests that he is therefore calling for the same wage rates in Bangladesh as in the USA (although there isn’t a single wage rate in the US, even under minimum wage laws). I asked Erik what he meant by the relevant line in his blog, and he clarified thus:

“What I’m calling for are legally enforceable international standards regardless of where a corporation chooses to site a plant, with these standards enforceable in the courts of the country of corporate origin.”

And I also checked with the AFL-CIO, our sister organisation in the US, because Maha had told me (on twitter, so I’m not implying this is her detailed position) that the argument she was criticising was not uncommon in North America. Their trade expert, Celeste Drake, told me:

“The AFL-CIO clearly is for rising wages and standards of living for all, and we agree that as wages rise in developing nations, low-wages won’t be one of the factors pulling jobs out of the US to other countries. However, the AFL-CIO has not supported efforts to impose a global minimum wage from the United States, nor to use a global minimum wage standard as a way to block imports from developing countries (moreover, our brothers and sisters in developing countries would not likely appreciate such efforts, which they might see as efforts to prevent their own country’s development).

“Instead, we have strongly supported international labor rights so that workers are empowered to raise their own wages and living standards; we support trade provisions to address labor rights abuses; we oppose austerity measures which reduce social safety nets, employment, and job security; and we promote social protection systems on a national basis (eg minimum wages, health and old age pension systems, unemployment and disability insurance etc), that will help workers everywhere live decent lives.  These policies will help workers as they help grow a global middle class that will increase markets for goods everywhere, creating a virtuous cycle of ever increasing demand—but without imposing a wage level from the US.”

That’s the TUC’s position too. Above all, we want Bangladeshi workers to have the freedom of association and rights to collective bargaining that would allow them to set their own wage rates at a level that would provide dignity and a living wage. Most of the people arguing against that aren’t protecting Bangladeshi workers’ jobs, but the wealth of Bangladesh’s business and political elite, and the bloated profits of multinational enterprises. And people who do care about the textile workers, like Maha, shouldn’t be making their task easier by misrepresenting the union/campaigner case.