A Few Pennies Worth

(Editorial cartoon by Kevin Siers (11/30/12) published by the Charlotte Observer and featured by McClatchy DC.  Click on image to enlarge and then return.)


AP has published a terrific analysis of the garment industry and how it works globally to get the cheapest labor possible, regardless of the conditions under which the workers labor, all to save a few pennies and to make a few bucks.  The entire article is worth the read, but I'm still going to quote a significant portion of it.

In the charred bones of the Tazreen Fashions Ltd. factory, the labels and logos—sewn and printed in scarlet and royal blue—beckon from the ashes. Even in ruins, there's no missing that these T-shirts and jeans were intended for U.S. stores and shopping carts, designed as bargains too good to pass up, or stocking stuffers just in time for the holidays and in just the right size.

But a week after the blaze outside Bangladesh's capital killed 112 workers, a glaring question remains unanswered: How, exactly, did brands worth fortunes end up in such a place? And what does the odyssey that brings them to market across thousands of miles say about the everyday economics most consumers take for granted? ...

That complexity means there are secrets behind every label that moved through Tazreen, sewn in by workers earning the equivalent of 27 cents an hour, 6 days a week, packed between rows of sewing machines stacked on floor after floor of a building with exits locked or blocked.

Such conditions were also common in the U.S. until a fire achingly similar to the one in Bangladesh killed 149 workers at New York's infamous Triangle shirtwaist factory 101 years ago. But today, the globalized economy allows retailers and consumers in First World countries to turn to Vietnamese or Honduran or Bangladeshi workers to do those jobs, a role largely overlooked until a system that runs with formidable efficiency is upended by tragedy.

"You have to remember that there is a problem which we face in a globalized economy, which is that if one country enacts really strict safety guidelines that raise the cost of manufacturing, buyers have the option to take their business elsewhere and, thus far, have demonstrated a tendency to do so," said Josh Green, CEO of Panjiva Inc., an online data platform used by international marketers and producers.

The supply chain's flexibility makes it particularly well suited for the clothing trade's repeating cycle of design, order, production, shipment and sale. Apparel companies begin laying plans for new lines of clothing a year before they arrive on store shelves. But creativity quickly gives way to number-crunching, as executives set sales targets and try to figure out which producers can deliver within their required profit margins, Rangarajan said. ...

But the pressures at work in Bangladesh, which has climbed to second place behind China among the world's largest exporters of apparel, continue because it is part of a global production economy with interchangeable components. Making clothes requires relatively low-skilled labor and equipment that is easily relocated or replicated, making it "uniquely susceptible to geography hopping," Green says.

That gives big buyers of clothing significant leverage. When a major retailer buys a garment, roughly 50 to 60 percent of the costs are for raw materials, 15 to 25 percent is for labor, and the rest is split between transportation, overhead and expenses like import duties, Rangajaran said. But except for the labor, the other costs are largely beyond buyers' control.

"Continually chasing low-cost labor is one of the big levers you have to pull," he said.

The result is a production system that has rapidly bypassed long-ago ways of doing business, when most clothing companies owned the factories where their goods were made and the workers were on their own payrolls. Now, a company like Wal-Mart or Sean John does not have to own a single factory, and the plants they rely on can change from year to year. The shifting creates the new challenge of keeping tabs on conditions where the work is being done.    [Emphasis added]

This is what unrestrained capitalism looks like, and it's all done on a global scale.  There is no human face to it, only bodies locked into buildings forced to work long days for pennies.  And the Wal-Marts, the Targets, even the Disneys are tied into it.  Some of them try to hide behind the shield of  "supply chain managers, independent suppliers or in-country agents" so that when one of these "embarrassing" incidents occur they can feign ignorance of the conditions and fire one shield only to hire another.  

Jobs have been exported from this country to China, Bangladesh, and other countries to increase the profit margins.  The sad part is that it is working.  People flocked to Wal-Mart and Target just a few days after this horrible fire and bought the very products those workers slaved to make because they were cheap, not realizing just what this system has done to those workers but what it has done to workers in this country.  Our own wages are now depressed (at least for those lucky enough to have a job, or two part-time jobs) and dropping with the threat of moving more jobs off-shore.

And our owners, those who control those global corporations and industries, are sitting back and enjoying every minute of it.