The dark history of worker controls in Bangladesh

(Source: Reuters)

After the tragic collapse of a factory in Bangladesh that has killed more than 100, there has been much comment on the state of work conditions in the country. It is worth noting the findings of the 1997 UNICEF State of the World study, which showed that laws attempting to prevent child labour in the country had some grim side effects:

An important initiative to protect child workers is unfolding in Bangladesh. The country’s powerful garment industry is committing itself to some dramatic new measures by an agreement signed in 1995.

The country is one of the world’s major garment exporters, and the industry, which employs over a million workers, most of them women, also employed child labour. In 1992, between 50,000 and 75,000 of its workforce were children under 14, mainly girls.

The children were illegally employed according to national law, but the situation captured little attention, in Bangladesh or elsewhere, until the garment factories began to hide the children from United States buyers or lay off the children, following the introduction of the Child Labor Deterrence Act in 1992 by US Senator Tom Harkin. The Bill would have prohibited the importation into the US of goods made using child labour. Then, when Senator Harkin reintroduced the Bill the following year, the impact was far more devastating:garment employers dismissed an estimated 50,000 children from their factories, approximately 75 per cent of all children in the industry.

The consequences for the dismissed children and their parents were not anticipated. The children may have been freed, but at the same time they were trapped in a harsh environment with no skills, little or no education, and precious few alternatives. Schools were either inaccessible, useless or costly. A series of follow-up visits by UNICEF, local non-governmental organizations (NGOs) and the International Labour Organization (ILO) discovered that children went looking for new sources of income, and found them in work such as stone-crushing, street hustling and prostitution — all of them more hazardous and exploitative than garment production. In several cases, the mothers of dismissed children had to leave their jobs in order to look after their children.

(UNICEF)

It is easy to support worker controls in the aftermath of a disaster such as this. It can be more difficult to face up to the fact that many face very limited choices, and that their decisions may reveal the least bad options available to them. Stripping people of the options that make them best off does them no favours. Studies suggest that sweatshops pay three to seven times the wages paid elsewhere in the local economy.

However, while it is certainly true that sweatshops often offer a better standard of living to those in the developed world, there is more than we can do to help the world's poorest. It is not enough to merely justify the moral worth of sweatshops, we should question why people have such a poor set of choices to begin with. Trade has helped the world's least well off enjoy record growth rates, but this liberalisation has largely been confined to freer movement of goods. Freer movement of people may do far more to help, as shown by a study of communities in Tonga and Vanuatu, which saw New Zealand's Recognized Seasonal Employer program yield impressive results:

(World Bank)

A paper in the Journal of Economic Perspectives concludes that removing all barriers to labour mobility would increase global output by 67 to 147 per cent. When the UK is seeing annualised GDP growth of 1.2 per cent, the US 2.5 per cent and even China is faltering, increases such as these could deliver stunning increases to the wellbeing of everyone on the planet.

So while it is right to defend the rights of workers in Bangladesh to take jobs that are risky, we should simultaneously ask why governments stop them from taking other choices. Enabling greater freedom of movement could deliver returns to all of us.