Need for a Minimum Standard

In an earlier post I argued that sweatshop, a shop or factory in which employees work for long hours at low wages and under unhealthy conditions, is a better choice for folks in least develop and developing countries than no place to work at all. This is why, in general, workers there do not request high standard of working condition as their counterparts in developed world do. They adapt to some poor condition even though at the same time they are not well paid.

This situation attracts many major retailers in U.S. and other developed nations to massively relocate their productions abroad, such as to China, Vietnam, Bangladesh, Indonesia, and other countries with low labor cost. A figure said that more 97 percent of apparel and 98 percent of cloth sold in U.S. are imported while in 1960an, that figure is only 5 percent.

Developing world, home for the factories, benefits from this shift. Since in general the new industries are labor intensive, they have been creating a huge number of jobs.  In 1980s, the number of garment factories in Bangladesh is only hundreds while recently, that number reaches nearly 6000 factories.

However, the world was shocked by witnessing 1134 people dead and hundreds injured when the Rana Plaza building in Savar, Bangladesh collapsed last year.  This is just a problem among many other issues involving multinational companies searching for low cost labor.

While I argue that sweatshop is one solution for the poor in least developed and developing countries, but dangerous working condition is another issue. What I mean by dangerous is a situation where it may threaten life safety of the workers.  a minimum standard has to be set up to avoid such tragedy or other accident in a smaller case. Then, the question is who should be in charge of such rules. The industry itself is not a good choice for this responsibility since a player could not be a referee.

Leaving the task to the government to regulate is also not a guarantee since low labor cost is one of its comparative advantages. Imposing too many restrictions might cause its industry less competitive and it means that investors could easily move their productions to other countries with less strict regulations. Thus, a collective action should be taken to overcome this issue. In my opinion International Labour Organization (ILO) and World Trade Organization (WTO) are good candidates to take this responsibility given their credibility among parties involved.