Over the past few years, news media have reported on clothing factories burning in Bangladesh that resulted in the loss of multiple lives. These factories were engaged in making garments for department and clothing stores located across the USA and Canada. In an earlier time, most of the garments sold in North American markets were domestically made. As international trade developed, it became cheaper to produce many types of garments overseas than domestically. The Bangladesh tragedies have prompted calls that North American clothing stores adopt standards of social responsibility when it comes to the manufacture of cost-competitive garments.
While safety standards inside Bangladeshi garment factories may be below the safety standards of North American factories, only a very small percentage of their factories have burned and resulted in tragedy. During the late 19th century and early 20th century, clothing factories burned in New York City too, with similarly tragic consequences. The size of the market in New York sustained several clothing factories, and consumers at the time switched to purchasing garments from competing factories. The local market had a built-in mechanism to encourage factory owners to avoid tragedies.
Worldwide, the textile industry is a large employer that pays low wages. In India and a few other Asian countries, some textile factories that produce carpets operate on forced child labour. Shortly after India gained independence from Britain, then-Prime Minister Nehru chose to rely on socialist economics to develop India’s economy. But India’s economy languished and there were frequent famines.
While Nehru’s government allowed some private industry to operate, India’s foray into socialist economics occurred without economic development precedents in a functioning free-market economy. The partitioning of India by the British invited tragedy that spread to the northwest and northeast of India. Several other Asian nations adopted socialist economics after gaining independence from colonial rule without relying on economic development precedents from a functioning free market economy. As a result, prostitution and child abandonment are common. Homeless and abandoned children are often drafted into textile factories or into the sex trade.
The low cost of production at Asian garment factories is the result of the low wages paid to Asian garment workers, in turn the result of a lack of employment opportunities in economies that governments have either mismanaged or overregulated. In poor nations such as Bangladesh, there is massive competition for small numbers of comparatively low-paying jobs in the garment industry. The low cost of labour actually undercuts the cost of introducing greater automation into the garment and textile industries.
Children usually sew by hand using needle and thread in most Asian carpet making factories. While children may be poorly treated in those carpet factories, the alternative would be to live on the streets and eke out a living by scrounging for food in garbage cans, the result of their families either having abandoned them or being too poor to provide for them. The existence of child labour laws does little to curtail child labour in carpet factories located in regions where (poorly paid) state officials who oversee child welfare are open to bribery.
While western social activists seek to improve working conditions for Asian garment workers and remove children from forced labour in Asian carpet factories and the sex trade, the economic problems that exist in those nations today are the result of decades of government control over national and local economies.
Historically and over a period of centuries and decades, the textile industry has undergone improvements in productivity, that is, in daily output per worker. At one time, workers would hand-roll clumps of sheep’s wool or balls of cotton picked from cotton plants into thread that other workers would knit into a garment. The development of the cotton gin, the loom and the foot-treadle driven sewing machine greatly improved worker productivity.
While much of the North American textile industry has closed, viable and competitive segments of that industry still operate domestically, often using automated or semi-automated technology while producing reels of fabric, including fabric for yacht sails and for gigantic tents. But until and unless automated machines can produce garments at competitive prices domestically, most garment-making will remain overseas.
* Harry Valentine is a free-marketeer living in Eastern Ontario.