Garment factories in countries like Bangladesh, Cambodia and Vietnam are notorious for their miserable working conditions. A recent Human Rights Watch report documenting labor rights abuses in “sweatshops” in Cambodia includes instances of forced overtime and retaliation, lack of breaks, denial of sick leave, child labor, and sexual harassment. And if you haven’t seen John Oliver’s segment on everything that’s wrong with the production side of the fashion industry, it’s spot on.
But despite our collective outrage and sadness over incidents like the 2013 Rana Plaza incident in Bangladesh, the economic justification continues to trump the human rights argument: labor is cheap in developing countries, and the only way to remain competitive in the global marketplace is to work employees to the bone in return for minimal compensation. As Groundswell has written about before, sweatshops continue to exist in part because they meet our cravings for trendy, affordable “fast fashion” options.
Thankfully, a team of economists has now “proved” what we’ve always hoped to be true: better working conditions can actually increase a factory’s profits.
Between January 2010 and December 2013, a research team led by Tufts University Associate Professor Dr. Drusilla Brown surveyed more than 5,100 workers and managers of Vietnamese apparel factories. They found not only that improved working conditions incentivized employees to get the job done faster, but also that higher productivity translated into higher wages for workers and higher profits for the factory. On top of that, more profitable factories were able to supply more products to international buyers—so not only can we feel better about clothes made under more humane working conditions, but there are more clothes for us to buy.
This is fantastic news! Money talks! It means every sweatshop manager looking to improve profitability will immediately try to improve working conditions in their factory—right?
Sadly, the market conditions aren’t that simple—if they were, every firm that treated their employees terribly would be out of business by now. But according to Brown and other labor economists, there are a few reasons why this link between working conditions and profitably isn’t always clear:
1. Working conditions need to visibly improve.
It sounds obvious, but that extra profit won’t materialize unless managers make changes that noticeably make workers’ lives better, right there on the factory floor. And firms often don’t know what workers really value in the workplace, and don’t bother to go the extra mile to find out.
2. Good managerial skills can be hard to come by.
Several economists have pointed out that factory managers in developing countries have often not received management training, and may resort to verbal or physical abuse because they aren’t aware of positive motivational techniques, like incentive pay. And when mangers are put under a lot of pressure to meet tough production targets, they tend to view their workers less as humans, and more as machines.
3. Setting standards for working conditions can speed up the process.
Brown thinks that management learning happens when factories are encouraged (or required) to comply with labor standards. This is easier said than done, because it usually involves governments making tough commitments in spite of political opposition. It also means paying for the cost of monitoring labor standards in factories. But at least sweatshops can no longer cry bankruptcy quite so easily.
4. Consumers can be a powerful voice for change.
Disturbingly, Brown’s research did not find any evidence that buyers are rewarding factories for meeting standards of good working conditions. So even though many companies claim to be making real changes in their supply chains, fast fashion companies may also need to rethink how they deal with suppliers. But big brands continue to be very concerned with their reputations, so it’s up to consumers like us to speak with our dollars.
The human rights and economic arguments speak for themselves: let’s finally get rid of sweatshops once and for all.
Katherine Manchester is an international development professional, with roots in Maine and Tanzania. She has written about issues of environmental sustainability and gender. For fun, she enjoys reading and messing around in sailboats.