Covering the changing retail landscape

After the fire in a Bangladesh garment factory killed hundreds, several business news outlets have turned to covering where clothing comes from and the real costs of how it’s made.

The Wall Street Journal reported that retailers are having trouble sourcing clothing that’s made to higher standards:

The recent spate of garment-factory disasters in Bangladesh spotlights the poor working conditions in that country. But for big apparel retailers seeking better standards—without giving up low-wage workers—the prospects aren’t much better in other parts of the developing world.

The deadly apparel-plant fires in Bangladesh last year and last month’s building collapse, which killed more than 700 people, revealed safety hazards, labor-rights violations and unauthorized subcontracting of Western brands’ orders. But labor activists say the same problems are rampant in low-cost Asian countries, which produce most of the world’s clothing.

Concerns about such problems have intensified as retailers—increasingly nervous about relying on Bangladesh—are looking to countries including Cambodia, Indonesia and Vietnam, where wages are often cheaper than in China, to potentially pick up some of the slack.

Many of these Asian countries don’t fare much better than Bangladesh in independent assessments of labor conditions. And critics worry that factory safety and worker protections won’t improve as long as apparel companies chase the lowest manufacturing costs.

The New York Times also had a story on Wednesday about the growing demand for items made under better labor conditions. Here are excerpts from the piece:

New research indicates a growing consumer demand for information about how and where goods are produced. A study last year by professors at the Massachusetts Institute of Technology and Harvard showed that some consumers — even those who were focused on discount prices — were not only willing to pay more, but actually did pay more, for clothes that carried signs about fair-labor practices.

Major retailers have long balked at disclosing the full trail, saying that sourcing is inherently complex — a sweater made in Italy may have thread, wool and dye from elsewhere. Another reason: Workplace protections are expensive, and cheap clothes, no matter where or how they are manufactured, still sell, as H&M, Zara and Joe Fresh show through their rapid expansion.

But labor advocates note that consumers’ appetite for more information may put competitive pressure on retailers who are less than forthcoming. In recent weeks, government officials, including Chancellor Angela Merkel of Germany, and labor and consumer advocates have cited the Bangladesh collapse in calling for the adoption of fair-trade standards or labeling. In direct response to what happened in Bangladesh, Everlane added information to its Web site about the factories where its clothing is made. “This factory is located 10 minutes from our L.A. office,” one description for a T-shirt reads. “Mr. Kim, the owner, has been in the L.A. garment business for over 30 years.”

“There’s real demand for sweat-free products,” said Ian Robinson, a lecturer and research scientist at the University of Michigan who studies labor issues. Consumers “don’t have the information they need, and they do care.”

The story also says that a variety of groups of working to develop ways for customers to evaluate where clothing comes from and if it’s manufactured in an ethical manner:

The Sustainable Apparel Coalition, which includes big names like Nike, Walmart, Gap, J. C. Penney and Target, has been testing an index called the Higg Index. It started last year with environmental goals, but the new version to be introduced this fall will include social and labor measurements.

The coalition was formed in 2011 to create one industry standard for sustainability and labor practices, rather than a patchwork approach. Some of the companies supporting this index have had sourcing problems — Walmart subcontractors were using the Tazreen factory, the Bangladesh plant where a fire killed 112 workers last November. Gap, Target and Penney produced clothing at another Bangladesh factory, where a fire killed about 30 workers in 2010. Nike, which faced a global boycott over sweatshop conditions in its overseas factories, was among the first major apparel companies pressured to disclose the factories it uses.

For now, the index is just for companies’ internal use. But Jason Kibbey, executive director of the coalition, said the goal was to give the information to shoppers, too, through a label or via the Web or apps. Labor advocates like Scott Nova, executive director of the Worker Rights Consortium, however, say that self-regulation may be ineffective.

As consumers band together and demand more information, the ability to change working conditions for those around the globe becomes real. And isn’t that worth a few extra dollars?

Covering these types of stories and chronicling the change in consumer patterns is an important part of good business journalism. As many outlets are cutting back on reporters and coverage, it’s good to see journalists continuing to cover these types of stories beyond earnings and general corporate announcements.