One way to keep prices low: Let people die
This is what is meant when people refer to externalized costs.
The fire alarm shattered the monotony of the Tazreen Fashions factory. Hundreds of seamstresses looked up from their machines, startled. On the third floor, Shima Akhter Pakhi had been stitching hoods onto fleece jackets. Now she ran to a staircase.
But two managers were blocking the way. Ignore the alarm, they ordered. It was just a test. Back to work. A few women laughed nervously. Ms. Pakhi and other workers returned to their sewing tables. She could stitch a hood to a jacket in about 90 seconds. She arranged the fabric under her machine. Ninety seconds. Again. Ninety more seconds. She sewed six pieces, maybe seven.
Then she looked up.
Smoke was filtering up through the three staircases. Screams rose from below. The two managers had vanished. Power suddenly went out throughout the eight-story building. There was nowhere to escape. The staircases led down into the fire.
112 workers were killed in the blaze at the Tazreen factory late last month, their tragic deaths described in calm, horrifying detail today by the New York Times. The workers died at work, steps from where they would normally be churning out apparel for European and American retailers, earning around $50 a month excluding overtime.
The global apparel industry aspires to operate with accountability that extends from distant factories to retail stores. Big brands demand that factories be inspected by accredited auditing firms so that the brands can control quality and understand how, where and by whom their goods are made. If a factory does not pass muster, it is not supposed to get orders from Western customers.
Tazreen Fashions was one of many clothing factories that exist on the margins of this system. Factory bosses had been faulted for violations during inspections conducted on behalf of Walmart and at the behest of the Business Social Compliance Initiative, a European organization.
Yet Tazreen Fashions received orders anyway, slipping through the gaps in the system by delivering the low costs and quick turnarounds that buyers — and consumers — demand.
Tazreen sat in an unsealed gap in the clothing manufacturing industry. Retailers are desperate to keep costs down but — for moral and public relations reasons — want to avoid manufacturers that skimp on employee considerations. But there are only so many places to slash costs; discounts on raw materials and shipping are hard to come by. A shadowy manufacturer that emphasizes speed and downplays pay and fire extinguishers? If it slices a few cents off each pair of pants, some manufacturers will take the risk. By not incurring the cost themselves, retailers keep prices low for you.
I hesitated to draw the obvious analogy between the horrible, graphic, gut-wrenching scene in Bangladesh and issues closer to Grist’s core — namely, the fossil fuel industry. But the rationale and the result are the same in each case: people dying to save a business and its customers money. A death that stems from an effort to keep prices low is as egregious if the business making that decision is Walmart or if it is a coal-powered utility. The tens of thousands who die prematurely each year from pollution from coal plants and other fossil fuel combustion do so in order to keep prices for everyone else low. Your electricity is cheaper because coal plants don’t filter out enough particulates, mercury, and other pollutants to prevent people from dying. Those deaths are a cost external to the use of coal.
What happened in Bangladesh is unconscionable, a scene that should have been eliminated from American apparel manufacturing 100 years ago, after the Triangle Shirtwaist fire. It wasn’t, because there’s money to be made in working the margins. There’s always money to be made in working the margins.
There should never be a column on the balance sheet for death. But there should also never be a situation in which death is an unwritten, undiscussed factor in ensuring a low, low price.
Horrific Fire Revealed a Gap in Safety for Global Brands, New York Times.