The True Cost of Cheap Clothes: Alarming Study

Over 1,100 workers were killed on April 24th in the 8 story collapse of Rana Plaza in Bangladesh. It made the news for a few days.

The editor of Supply & Demand Chain Executive, writes an op-ed in the June’13 issue (pg 6) on working conditions in the country. With 5,000 garment companies, employing some 4.5Million workers, 80% women, conditions remain high risk. Improvements will take time and come at a price. With wages as low as $37/month, this works out to about 20cents/hour.   Think about this looking through your clothes tomorrow on what to wear, he comments.

As companies outsource their work to lower cost areas, they need to be vigilant on the inherent risks associated with the working conditions at the site. Several of the world’s largest garment  retailers are now stepping up and agreeing to pay for on-site fire and building safety. Also, the Bangladeshi government is pledging to raise wages and improve conditions such as the ability to form worker unions. In the past, the government had shown little interest in improving conditions in their $20Billion industry.  As of mid-May’13, only 3 U.S. based retailers  (Calvin Klein, Tommy Hilfiger & Izod) have stepped up to improve worker conditions.  Where are the other big discount retailers?  Gap agreed to $22M in loans and hiring a fire inspector.   

If you are in the supply chain business, do you know the conditions in the distant outsourcing of your products?  Do you take responsibility for the situations, accidents or long term impact of the outsourcing decision?  

Sources: Supply & Demand Chain Executive, Barry Hochfleder, Editor, June 2013 edition, pg. 6

Voice of America News, Aru Pande July 9, 2013.

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