Recent workplace disasters shine the spotlight on worker safety and supply chain risk.
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I grew up on stories of The Triangle Shirtwaist Factory fire, Robert Wagner, Al Smith, Samuel Gompers and others. To update your US (and some supply chain) history, just a little over 100 years ago, 146 people died in an apparel factory in NYC. The factory owners got off with $75 payment per death to the families—making a profit on that as well. However poorly the victims were treated, it did spur others to action and was a catalyst for societal and legislative action, such as the so-called Wagner Act.
We've had a new rash of workplace disasters. Bangladesh is the site of multiple, prior apparel industry tragedies that left many dead and injured, the latest being the Ranza Plaza collapse in Savar, an industrial suburb of Dhaka. As of this writing, more than 650 are dead; estimates of 149 are missing; many have been rescued, but many of those people are severely injured. More heartbreaking news is sure to come.
This and other recent labor events (the recent dock workers’ union negotiations) do not put brands and retailers in a good light. Most Americans do not even realize the working conditions that exist right here in our own country, what to say of overseas.1
The recent chemical factory explosion in West, Texas, again demonstrates the point with 14 dead, and approximately 200 injured.
Larry W. Smith/EPA: Twisted remains of a fertilizer plant, other buildings and vehicles after the horrific explosion.
We want cheap goods. And now we need cheap goods. According to recent economic data,2
the working class, and especially the working poor, got poorer in the last few years, (while the top 1% has taken a nifty profit on the financial corpse of the recent economic woes of the developed nations). So if you are surviving on $21k or even $60k a year for a family of four, you clearly appreciate the bargain pricing brought to you by low-cost brands.
US citizens overwhelmingly embrace capitalism; they want companies to thrive. They dream of upward mobility. For example, in spite of the noise made by lobbyists that the economy was at risk from labor unions striking at the East and Gulf Coast ports, “ILA negotiated well beyond the original contract deadline of September 30, 2012, agreeing to a series of extensions to keep cargo moving and bargaining continuing rather than engage in a devastating strike or lockout.”3
But clearly, something needs to be done. As US companies went through the variability in the global economy over the last few years, they nipped and tucked, downsized, optimized and outsourced. And they have the record profits to show for that. Surely, some of that income can be shared with the Bangladeshi worker who makes $38 a month (roughly $.21/hour). Now, $.21 an hour combined with unsafe working conditions brings shame to us all.
As supply chain professionals, this is not what we intended. Most of us feel that we're bringing jobs and technology, and opening the door to the global economy in many countries around the world. We are opening new markets, bringing the means to attaining education and health to citizens who never experienced this before. And that is the ideal we wish to live up to. But fulfilling that image will require some changes on the part of many retailers and how they deal with their source markets.
Retailers and brand companies must examine the multi-tiers of their supply chain and be able to monitor and manage the business practices, working conditions, and the effectiveness of those sites. Certainly, workers who have no stake in the end-customer’s health and market are very unlikely to report intellectual property violations, counterfeiting, and other such woes that have plagued consumers in developed nations4 during the last decade in this new, outsourced world. More than likely, they are not in a position to assert any ethical principles. The people who work an assembly line overseas probably don’t know patent laws, and may not even know they are working a ‘4th shift’. The reality is that they need the work and are, themselves, victims of poor labor practices and poor working conditions.
So it is mutually beneficial to all of us—retail companies and source-market players—to collaborate and build an ethical framework, one that is based upon fair trade practices, and rewards source companies and their employees for innovation, safety, and good practices.
We have complicated relationships between labor and business. Our pension plans rely on a great business outlook. And businesses rely on the best of intentions—and ideas—from their employees. We are mutually dependent. Our salaries have fueled our homes, better health, college educations for our children, and vacations around the world; enabled us to become patrons of the arts, and given us the ability to purchase all sorts of consumer goods that have made our lives easier. None of this was possible before the Industrial Revolution. The US actually has taken the lead for its own citizens in workplace safety and generally providing a corruption-free work environment. We've done a pretty good job of exposing risks and fraud and punishing those who perpetrate illicit acts. You can see that the US really took BP, Halliburton, and others to task for the oil spill along the Gulf Coast. I fear that the (mostly impoverished) women in Bangladesh will not fare as well unless the international business community takes action on their behalf.
US consumers must also raise their voices, since I fear that businesses, unless pressured, will do a minimal amount to address the current issues with their suppliers in Bangladesh. We need to make our opinions felt. Since you, dear reader, are generally a supply chain professional, I encourage you to think about the role we play and how we can create supply chains that we can be proud of!
1 Lately, there has been anti-union sentiment in the US, ironically, as more manufacturing and other middle and lower middle class jobs either get outsourced or the ratio of pay to the cost of living continues to fall. For example, dock workers, the International Longshoremen’s Association, AFL-CIO (ILA), have more than 30 deaths per year due to workplace accidents, attributed to dangerous working conditions and odd working hours.
-- Return to article text above 2 Both the US Census and the US Commerce Department have released data on a widening income disparity.
-- Return to article text above 3 An ILA spokesperson told us.
-- Return to article text above 4 Actually, citizens in poor countries are as victimized by tainted and counterfeit products; they just have little voice, at present, to protest it. -- Return to article text above
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