Economics too often makes outsourcing the manufacturing of goods a necessity, especially when a major hand assembly component is involved. And when horrific calamities strike in faraway places, such as the building collapse on April 24th in Savar, a suburb of Dhaka, the capital of Bangladesh, American companies whose goods come from these factories often wring their hands and say they are doing everything they can. That is simply untrue.

A low wage outsourcing model that works indefinitely better does exist. And it’s better for the workers and still allows for the production of goods at competitive price levels

Born in the mid-1960s, 30 years before the North American Free Trade Agreement (NAFTA) was implemented, the Maquiladoro concept continues to be a cost-effective outsourcing alternative for American manufacturers. This concept flourishes along the U.S. border with Mexico. American companies build factories in Mexican free trade zones. The workers and most managers are Mexican nationals, but the working conditions and standards are firmly in the hands of the American owners.

That’s very different from the approximately 5,000 factories in Bangladesh. Their owners, Bangladesh nationals, often are driven by nothing but cost.

The Mexican Maquiladoro concept continues to be a cost-effective outsourcing alternative for American manufacturers.

The disaster, that saw an eight-story building collapse in a pile of rubble, came one day after cracks in the building made it apparent that it was unsafe. The owners were told to close it, an order they simply ignored. This calamity that took hundreds of lives cannot be ignored by the brands that used this facility and others like it.

It’s not enough for these brands to promise to put pressure on the factory owners. It’s time for them to build their own factories in countries where labor costs are favorable.

It’s time for the major global clothing companies to act. They owe it to the more than three million workers in Bangladesh that sew their goods for minimum wage, under $40.00 a month.

It’s not enough for Apple to say that FoxConn, a manufacturer in China, is making improvements. Apple could buy out FoxConn and make things right for the workers in those factories. Americans can afford the tiny bump up in prices that these ethical moves would bring.

The Maquiladoro concept works. For half a century most Maquiladoro workers have had clean, safe working conditions. Many have access to free healthcare on site and nutritious meals at reasonable cost, to simple things like showers that we take for granted. 

While their wages are low by American standards, they make what is a living wage in their society, and we benefit from the cost of the goods they produce. Ethically, how can we accept anything less in the creation of what we wear on our backs and carry in our pockets?

We have been blessed with much. How can we allow those who make these goods suffer, even die to save us pennies? We are a better people than that.


About The Author W.T. "Bill" McKibben
W.T. “Bill” McKibben is Senior Counsel, Ethics Practice, The Great Lakes Group. His book, Play Nice, Make Money, makes the case for the ethical business model as the surest path to profitability.

You don't have permission to view or post comments.

Quick Search

FREE Impact Analysis

Get an inside perspective and stay on top of the most important issues in today's Global Economic Arena. Subscribe to The Manzella Report's FREE Impact Analysis Newsletter today!