Working Conditions in Bangladesh

AP reports on some limited good news:

Bangladesh’s government agreed Monday to allow the country’s garment workers to form trade unions without prior permission from factory owners, the latest response to a building collapse that killed more than 1,100 people and focused global attention on the industry’s hazardous conditions. The Cabinet decision came a day after the government announced a plan to raise the minimum wage for garment workers, who are paid some of the lowest wages in the world to sew clothing bound for global retailers.

It is a shame that almost 1000 workers had to die from unsafe working conditions before the government decided to cease its anti-union efforts. The reason this is only limited good news is explained later:

Bangladesh is the third-biggest exporter of clothes in the world, after China and Italy. There are 5,000 factories in the country and 3.6 million garment workers. But working conditions in the $20 billion industry are grim, a result of government corruption, desperation for jobs, and industry indifference. Minimum wages for garment workers were last raised by 80 percent to 3,000 takas ($38) a month in 2010 following protests by workers. Since 2005, at least 1,800 garment workers have been killed in factory fires and building collapses in Bangladesh, according to research by the advocacy group International Labor Rights Forum.

Free trade certainly brought benefits to U.S. consumers of apparel in the form of lower prices. We had heard from proponents of free trade that it also brought benefits to Chinese workers in the form of higher wages. But the apparel multinationals saw places like Bangladesh as an opportunity to keep its profits high even as consumers enjoyed lower prices. Cost minimization is not always welfare increasing.