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  • If it was only low wages, that would be fine.

    Posted on May 20th, 2013 Michael No comments

    The recent collapse of a factory building in Bangladesh is a tragedy. The massive loss of life and the large number of injured are appalling on many accounts. What this major tragedy shows clearly is that the lure of low cost countries for manufacturing is not just about the low pay for the workers. In many cases not having to worry about worker safety and building standards is where major costs are reduced.

    To be clear, low worker wages is part of the overall equation, but it is not the whole story. Some studies indicate that if certain garments were made in the United States, the overall price increase would be about a dime per item. In many cases, the extra cost of a “Made in the US” garment is worth the additional cost since it puts a neighbor to work and it increases the overall domestic economy.

    According to the OSHA website,, there are, on the average, 13 work related deaths a day (2011) in the United States. This number is down from an average of 38 a day in 1970. Even with all the regulations, and the cost to the individual business of complying with the regulations, there are still deaths.

    We can argue whether or not the cost justifies the need, but the goal of the safety regulations should be to make the overall environment safe. This costs money to do, and in some cases it impinges on productivity. Sometimes this makes it hard to compete with places like Bangladesh where the workers are paid less, the factory costs less to build, the equipment does not have all the safety features so they cost less, etc. The overall cost of doing business is less in almost all areas, but at what cost.

    The United States does have its own problems. We might have the regulations, but as the explosion at the West Fertilizer Company proved, the resources are just not there to do proper inspections. This leads to some cases where there is a violation that leads to a catastrophe. Even with its flaws, the system in the United States is still pretty good and should be what other countries strive for.

    As consumers, we need to understand what our purchasing choices are what they mean. The label “Made in the U.S.A.” means more than jobs for the domestic economy. That label also means that the people responsible for the goods or service we buy were able to work in a safe environment, and usually for reasonable wages.

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