The true cost of your cheap clothes: slave wages for Bangladesh factory workers

Everyone loves a bargain but the true cost of that latest wardrobe addition is pitiful wages for Bangladesh's legion of factory workers, writes Simon Parry.

Workers at the Viyellatex factory in Dhaka, Bangladesh, produce clothes for Marks & Spencer. Photos: Red Door News Hong Kong; AFP; Reuters; Xinhua

In a suite of offices lined with racks of clothes on the seventh floor of an industrial building in the back streets of Lai Chi Kok, the head of a trading company explains the economic reality that has transformed the global garment industry over the past decade.

"Ten years ago, you could only buy a T-shirt for US$5. Now you can buy a sweater for US$6, and for US$9 you can buy a jacket," says Mandarin Lui Wing-har, managing director of the low-profile but highly influential Top Grade International Enterprise. "Of course, at the high end of the market, people will still pay US$500 for a T-shirt. They don't care about the price, only the brand, and maybe only 50 T-shirts will be made in that style. But we are making maybe 50,000 T-shirts in each style - and that is why we can sell them for US$3 or US$4."

A decade ago, most of those T-shirts would have been made in Guangdong, a province once known as the "world's workshop". Today, the looms are turning faster than ever - but the work has moved nearly 2,500km from Dongguan to Dhaka. Soaring labour costs and China's gradual shift from low-end to high-end manufacturing have seen garment production find a new home in Bangladesh. But the doorway to the world's workshop remains in Hong Kong.

In the same way Kowloon-based companies would send mainland-made products around the world throughout the 1990s and 2000s, Top Grade last year handled orders for 30 million pieces of clothing made in Dhaka's factories for customers including European supermarket chain Lidl, and major chains in Brazil and Japan. Orders are placed with Top Grade and other companies, such as Li & Fung, and the payments pass through their Hong Kong offices, although the goods themselves are sent from Bangladesh directly to the customer.

The Lai Chi Kok block in which trading company Top Grade International Enterprise has its offices.

As clothing factories in southern China close down, Top Grade is seeing orders boom. The company had the prescience to set up in Bangladesh before most of its competitors and now has 20 to 30 factories in Dhaka. Lui and her industry colleagues expect Bangladesh to overtake the mainland as the world's biggest garment producer in a matter of years.

More than four million people work in Bangladesh's garment industry, which now accounts for about 80 per cent of the country's foreign trade. It has the potential to lift the nation out of poverty in the same way manufacturing transformed the lives of tens of millions of migrant workers in China in the 1980s and 90s. But the relentless demand for ever-cheaper clothes from high-street stores and supermarket chains in the West is keeping workers' wages at levels as low as US$68 a month - an amount that pressure groups, unions and even some employers admit is barely enough to support the people whose sweat and hard work the industry relies on.

The Rana Plaza disaster in 2013, in which 1,130 people died and 2,500 were injured when a run-down eight-storey factory complex making clothes for Primark, Benetton, Walmart and other Western brands collapsed, highlighted the dangers of the industry in Bangladesh. Critics say that while fire and building safety conditions have improved since the tragedy, worker conditions remain bleak, particularly as the pressure increases on factories to produce ever cheaper clothes.

"Since the disaster, employees have to work harder," says former child factory worker Nazma Akter, founder of the 37,000-member Awaj Foundation, which fights for labour rights in Bangladesh. "They have higher production targets. If they cannot fulfil them they have to work extra hours but with no overtime. It is very tough; they cannot go for toilet breaks or to drink water. They become sick. They are getting the minimum wage as per legal requirements but they are not getting a living wage."

A Babylon Group factory in Dhaka.

A survey of Bangladeshi factories supplying Marks & Spencer carried out last summer found that workers' average basic monthly pay was 6,500 taka (HK$630) and their average take-home pay, including an average two hours a day of overtime, was 8,000 taka. Although this is more than many in the industry get, the average estimate of what workers consider is enough to live on and support their families is 15,000 taka a month - about twice their actual pay.

Workers in Bangladesh have some of the lowest salaries anywhere in the world.

"Even Myanmar is getting US$99," Akter points out. "Our workers need a monthly rise of US$30 or more."

Akter criticises the use of foreign aid, which poured into Bangladesh after the Rana Plaza disaster from governments and Western companies making clothes in the country.

"If this money went to individual workers, they would have a more happy life. But the money was invested elsewhere. Workplace education is important but we need to address the fact that workers are not getting sufficient food and have no freedom of association."

A Sino-United States textile factory in Wuhu, Anhui province, China.

Women in the garment industry come to Dhaka from the countryside. "After they reach 40 or 45 they voluntarily leave their jobs because they become old and they cannot fulfil their production targets any longer," Akter says. "There is too much work pressure and they have not enough food and they suffer malnutrition. They spend most of their youth in the garment industry for multinational retailers and then they have to retire at 40, when their health is ruined.

"H&M, Primark, Asda, Tesco, M&S - they come here [many of the brands buy direct through their own offices in Dhaka, but may also employ third parties such as Top Grade] because Bangladesh is cheap and they get cheap labour. It is not fair. Humans cannot be so cheap. There needs to be a balance - you cannot say you are trying to improve working conditions and help workers out on one hand when on the other hand you are not giving a fair price," she says.

"Consumers in [the West] have a big responsibility. They get things so cheap. They have to think about how these companies are doing business. The multinationals take our blood and our sweat. Consumers need to know where their clothes are coming from and what the working hours and conditions are. We need to look at the living conditions, not the working conditions."

Akter's call for fairer prices is echoed by Dhaka factory owner Emdadul Islam, director of the Babylon Group, which employs more than 10,000 workers to make clothes for companies such as Tesco and River Island.

Volunteers assist in rescue operations after the Rana Plaza collapse in Dhaka, in 2013,

"When companies do business with suppliers like us they should be able to understand the right kind of price for the articles they buy," he says. "Sometimes they seem to be void of any sense of that. They don't give a damn if it is a rational price or not. They say, 'I can get it cheaper next door so you should be even cheaper.' When you talk about your cost or margins they say, 'This is something I don't deal with. I have my target.' When you raise ethical social issues, it is a one-sided conversation."

Workers are getting too little, Islam concedes, but adds, "It is difficult for factories like us … because we are not being compensated properly in terms of the price we get from buyers and customers.

"We need to avoid a repetition of the Rana Plaza incident. For that to happen, these suppliers need to be able to sell their products at the right prices. How can it be a cheaper price every day? Where is the magic that makes that happen? If you exploit your suppliers every day, at some point you cross the line and you are no longer an ethical buyer."

Islam suggests a US$1 levy on every US$20 item of clothing that would go directly to workers.

The hand of a garment worker is seen among the rubble of the collapsed Rana Plaza building.

"In the past, you simply could not guarantee this extra money would benefit the workers. But today it is different. It is time they did it," he says.

But at Bangladeshi conglomerate Viyellatex, which employs 18,000 people and makes clothes for several high-street chains, chief operating officer Ziauddin Ahmed disagrees with the proposal and says there has been too much focus on the pay of garment workers.

"What about rickshaw operators or street vendors? What about the people working in street restaurants? They are all human beings too," he says. "As a responsible manufacturer we comply with government rules [on minimum pay]. Of course, we would like all our workers to come into work driving a fantastic car. But would you be able to buy the T-shirt then? If you go to London, you will see people smuggled in from other countries and working in the restaurants and kitchens and not getting the legal requirements. Things like this happen everywhere but everyone points the finger at us."

The responsibility lies with consumers, says Ahmed.

"You are supporting the culture of cheap products. If you have an order for a million T-shirts and we can't meet the price, the buyer will go to a noncompliant factory because they will do it very cheaply. If people start to think, 'I don't only need to buy cheaply but I need to buy responsibly,' that is when things will start to change. When customers say, 'I will only buy a sustainable product that has been made responsibly,' the entire supply chain will change, because the market rules. It is the customer who is the king."

Relatives of the victims gather at the site of Rana Plaza, in 2015.

At British-based pressure group Labour Behind the Label, policy director Anna McMullen says governments need to demand more data on the source of imported garments to stop worker abuse.

"The cost of cheap clothes is people living in poverty and factories cutting corners on health and safety, and that's not right," she says. "We can ask companies to put a label on their clothing saying this is the factory where it was made. That way, we get civil society engaging in where our clothes come from and who really made this."

Reports about poor working conditions and suggestions about how to improve them are nothing new, of course, but there is no sign of consumers forcing an improvement in the living standards for garment workers any time soon. If anything, the switch to production in more freewheeling Bangladesh is being accelerated by the global slowdown, which has sharpened shoppers' appetite for bargains.

"Buyers are looking for good quality and good style but they cannot pay high prices," Lui says. "That is why we survive. We are doing mass production at low cost and that is exactly what Bangladesh can do.

"The whole world is in a recession nowadays. Buyers are under pressure. They don't want the shops to be empty of stock but they can't pay higher prices. People go shopping and they expect to buy a pair of jeans for a few dollars so you have to find the things they want at the prices they want."

The area around the Viyellatex factory is largely unmaintained.

Top Grade has 100 staff based in Dhaka to pay regular visits to ensure factories are compliant and there are no issues regarding conditions or underage workers, Lui says.

"Before we place an order, our team will inspect the factory and make sure they have the certificates," she says. "In Bangladesh, you can find tip-top modern factories and you can find lousy factories producing garments for very low prices - but if you place an order with them you will never get your shipment out.

"Every season my people analyse which factory is reliable and on time, and that the price and quality are OK. Some factories are very bad and we take them off our list."

For Lui, the main concerns currently are union-led labour unrest and the threat of Muslim extremism spreading after Islamic State-linked incidents in the country.

"I hope the Bangladeshi government will do something to give us more confidence," she says. "The garment business is too important for them."

At Viyellatex, meanwhile, where rows of workers are making piles of bright green children's shorts for Marks & Spencer, Ahmed insists that, despite the challenges and shortfalls, conditions are improving. He prefers to emphasise the extraordinary growth the country's garment industry has experienced over the past two decades.

"We are already the second biggest apparel exporting country in the world after China. Soon Bangladesh will be No1," he says, with unmistakable pride. "We can clothe the world."

Bilkis Begum

​Underage and overworked

Bilkis Begum was barely 12 years old when she began working in a Dhaka garment factory.

"My parents didn't want me to leave home and come to work here but we had no money," she says. "I was the oldest and I felt responsible. So I came with my uncle to work here."

The daughter of a cycle driver from a village 100km from the Bangladeshi capital, she left school to support her four younger brothers. From 8am to 7pm, she sews shirts and trousers at a factory supplying Western high-street brands. She lives alongside hundreds of other workers in a tin-roofed shack 10 minutes' walk from the factory, on Dhaka's crowded and chaotic outskirts.

"The hours have always been long but as I got older, the work got harder. I was given more and more difficult work," she says.

Under Bangladeshi law, garment factories can only employ workers aged at least 14 and those aged 14 to 18 can work for a maximum of five hours a day.

"When I was younger, every time the inspectors came, I would be ordered to leave the factory or they would hide me and the other underage workers somewhere no one would see us," says Bilkis, who is now 17.

Still earning less than 6,000 taka (HK$580) a month, Bilkis is proud to have been able to support her family for so long.

"My plan is to work until I get married," she says, with a tired smile at the end of another long day's work. "When I get married I don't want to work anymore. I just want to relax and enjoy life."

Red Door News Hong Kong

This article appeared in the South China Morning Post print edition as: Cheap trick