A Passion for Growth

Tutorial 5 – Bangladeshi Women

Note: always argue for the ethical side of things – still need to consider business.

1. What are the major economic facts of the garment industry in Bangledesh?

These are positive factors

• Contribution to GDP – industry is worth 6% of countries GDP.
• Share of exports – 80% of total exports come from garment industry.
• Job creation – creates millions of new jobs.
• Increased wages – pay is 13% more than other manual labor jobs that are similar.
• Cutting poverty – poverty has been cut.
• Girls in school – better education means they can have a better contribution; there’s a 27% increase in school attendance after the garment industry began.

2. What are the main political and legal problems that affect the industry?

These are negative factors

• Political environment is very unstable since Independence Day from Pakistan in 1971; there is corruption and riots.
• Women’s rights are being ignored.
• Sub standard factory practices – deaths of workers; world opinion is strongly against Bangladesh.
• Claims for compensation from those who have been injured or passed away – governments have had to pay out due to the lack of support from insurance companies.
• Criminal charges vs. factory owners.

3. How would YOU calculate the wages for a garment industry worker if you owned a factory?

This question is open for your own opinion (discussion – need to choose only one for exam and have a proper argument which should be worth about 5 pages); e.g.

• As low as possible (maximize profit).
• As low as possible (maximize job worth).
• Could set wages less than direct competitors.
• Could set wages no higher than competitors  - same rate as competitors.
• Fair wage based on comparable industries and cost of living in home country.
• Award wages (if exists) plus bonus for quality/ or quantity of work.

4. If you were a clothing retailer in Australia sourcing clothes from Bangledesh (or other developing countries), what issues to do with garment manufacturing would you put in your contract and how would you enforce them?

Also open for discussion:

• Supplier work practice standards – as a minimum.
• Supplier safe work place standards.
• Fair wage rates for supplier’s employees.
• Quality standards.
• Contract cancellable on any breach or repeated breach?