The March of Capital: From Chicago to Dhaka

On a Friday evening, as a summer twilight falls across Manhattan, you can see the slow but steady streams of consumers filing in and out of Hennes & Maurtiz (H&M). Perhaps a healthy number of them have heard the story of the European retailer’s hazy association with the tragedies in Bangladesh. Some are vaguely aware of a factory collapsing, but can’t quite recall if 100 people died or 1,000. Fewer still recall the furious fire in the same garment district of Dhaka in November, or that 112 died then. And few know that for months now, tens of thousands of garment workers have poured into the streets of Dhaka’s Ashulia industrial area, protesting the scandalous wages, deathly conditions, and the union-blocking legal code that help keep one of the world’s largest textile communities enslaved by savage corporate profiteering, led by retailers H&M, Wal-Mart, Gap, Calvin Klein, Nautica, and others.

Along H&M’s blazingly lit racks and shelves, nobody mentions the Bangladeshi government’s attack on protestors May 20th, gunning down fifty something citizens with rubber bullets, a painful but tiny wound on a twenty-thousand member contingent blocking access to the Ashulia district, where 300 factories churn out the goods that line the shimmering shelves of the western world. Stacks of cheap but stylishly designed clothing appeal to young New Yorkers anxious to resemble the city’s youthful urbanites, striding purposely through the Manhattan sun in form-fitting blazers, thin neckties, and cuffed skinny jeans, and at night downing local ales in scruffy Williamsburg bars in plaid flannels while thumbing glinting iPhone 5s and Samsung Galaxies. Nobody notices that Karl Johan Persson, the thirty-something inheritor of the H&M multinational, has announced with the sangfroid of an aloof and incurious capitalist, that in response to the collapse of the Rana factory in Bangladesh, he is considering shifting production to Africa. From the pan into the fire, one supposes. Persson also noted that South and Central America were also on the company’s radar for future factories. Naturally, this announcement comes on the heels of the company’s celebrated endorsement of fire and building safety measures in Bangladesh.

Business as Usual

This is par for the course. Corporate multi-nationals relocated much of their textile production to Bangladesh after Chinese workers began to demand higher salaries and wages began to rise. Chinese workers—who could pocket a staggering $150 a month stitching and sewing western wear—have been swiftly replaced with largely illiterate Bangladeshis for a more reasonable $38 a month. (Imagine the feverish CPA bent over his abacus calculating the cost savings.) Rather than concede a few percentage points off their stupendous margins, clothing conglomerates looked for cheaper shores. Bangladeshi garment production leaped 20 percent in 2009, while Chinese garment production slipped five percent. Of course, when multinationals go in search of low-wage production, they implicitly understand what that means—slight if any wage provisions, few occupational safeguards, and a dearth of benefits. Shareholder value is the byword of capitalism; any conditions that create it will suffice. This is what makes after-the-fact mea culpas seem so disingenuous; it is only the exposure of the crime that conditions change. In this case, capital and production flight.

These meager pay scales are a consequence of the labor arbitrage that is the bane of global labor and the unions that attempt to represent it. As has forever been the case with industrial capitalism, capital is always one step ahead of labor, shifting production around the globe just an arm’s length out of reach of provincial unions, legal advocacy groups and hazy fraternities of environmentalists. But even the presence of those perennial champions of the underclass and the defenseless earth are no guarantee against exploitation.

Back to the Future

Perhaps collapsing nine-story buildings and furious garment fires are largely confined to the miserly conditions in Bangladeshi production zones, but some manifestation of sweatshops are still an issue in the first world, too. The New York City District Council of Carpenters was recently embroiled in a dispute with pension fund giant Teachers Insurance and Annuity Association-College Retirement Equities Fund (TIAA-CREF) over its funding of a residential building in Queens. As so often happens, the developers hired non-union labor and refused to pay it “Area Standard Wages” nor health or pension benefits. Facing repeated protest from the NYCDCC, the fund eventually sold off its interest in the project. Now the NYCDCC is fighting the same battle with the EMC Corporation because its divisions hire sub-contractors to evade union workers. The Area Standard Wage concept dates from the Hoover administration, when there was a state-led attempt to ensure out-of-state bid contractors paid the “prevailing wages” of the geographic region, not cheaper wages that might have prevailed in their home states. Since many states lack prevailing wage rules, these battles are still being ‘waged’ across the country.

On Wednesday, May 22nd, reports surfaced of the collapse of two garment factories in Cambodia. Representatives for H&M affected surprise on learning that its clothes were being manufactured at one of these buildings. Ironically, the H&M spokesperson blamed the dearth of supply chain control on the vile practice of unapproved sub-contracting.

Yet just over a hundred years ago, Urban Sinclair was documenting conditions in Chicago’s meatpacking district that resembled the heedless practices we see today in Bangladesh and Cambodia, and the same sort of underhanded methods we see in New York. Decades of unceasing protest, including the use of general strikes, led to whatever wage standards and safeguards American workers enjoy today. Yet as American labor costs rose throughout the 20th century, corporations got nostalgic for the old days, when profits topped seventy percent and laborers were a fragmented mass of immigrants, platoons of desperadoes with scant language skills and American dreams, all too willing to sign onto any project that paid. There were few confederates or leagues or unions in play. No covenants between capital and labor, when the nation was a good seventy years shy of an Occupational Safety and Health Administration (OSHA). Corporate America soon founds its Shangri-La on the cluttered shores of the Pearl River Delta and densely packed Dhaka garment zones, where it was Chicago’s Packingtown and England’s Manchester all over again. What luck! You could pay 19th century wages and charge 21st century prices.

Naturally, today the shelves of H&M are cleared on credit. Incomes have stagnated or fallen, depending on your metric, since the late sixties. The credit card bubble, more than $800 billion and counting, is surpassed only by the college debt of the cardholders. When these bubbles burst, a great leveling will follow, as the quality of life in America will slide inexorably toward the Third World, while hundreds of millions of arriviste middle class in Asia will discover H&M for themselves, as shops filter down to lower-tier cities. Its products might be denominated in Yuan, but they’ll be shilled with the same carrot of social cache, iridescent anchor stores, and images of callow ingénues lingering under the shade of palms—just in Macau, not Malibu. The point being, for any middle class to emerge into the modern age and take up the baton of mass consumption, there must be a fledgling populous of wage slaves emerging in parallel, a couple of centuries and countless injustices behind. As Asian wages rise and America’s fall, it will be economic sense to bring offshored jobs back home to escape pesky unionized Mandarin and Thai and Bangladeshi labor. Back to the deflated cities and beggared communities of North America, where the war for a fair share can begin afresh.

Jason Hirthler is a writer, strategist, and 15-year veteran of the communications industry. He has written for many political communities. He lives and works in New York City. He can be reached at: jasonhirthler@gmail.com. Read other articles by Jason.