Associated Press reported that there are now 761 known
deaths in the collapse of a building housing multiple clothing factories in
Bangladesh. Does that mean that firms will stop ordering clothing from
suppliers with questionable safety standards? They have the means to do so
because it is known that multi-story, multi-user buildings such as the one that
collapsed are operated with low safety (the building that collapsed had too
heavy machinery installed) and often have illegal modifications (the building
that collapsed had three stories added illicitly). Single-story buildings are
better; buildings owned by the factory operator are better.
The moral case for imposing safety standards is clear. The risk to the reputations of firms that do not is also clear, and understood by the firms. When boxes of Disney
logo clothing were found in the building that collapsed, both Disney and
Wal-Mart (the licensee) explained that they had withdrawn authorization to
produce in such factories, and the boxes had been moved to this building for
storage without their approval.
But ultimately what matters is how customers react, because there
will always be firms that are willing to place orders in unsafe places unless customers
are vigilant. Indeed, in the New York Times, Jerry Davis has argued that customers
should make it unprofitable to be unsafe. Will they do so?
Fred Pampel and Lori Hunter published a paper in the American Journal of Sociology that provides an interesting parallel, because it examined support
for environmental spending. Concern for the environment is similar to concern
for manufacturing safety because a consumer can be “selfish” and only
consider local benefits (a cheap t-shirt), or the consumer can be an altruist
who also considers benefits to others (not having a polluted river; not dying
in a building collapse). They showed that environmental concerns have increased
over time, and more importantly, they gave some insights into how. Using data
on how attitudes changed over time within birth cohorts, they were able to show
that individuals with higher socio-economic status (SES) were early supporters of the environment, but this
concerns spread to others with lower SES, increasing the overall level of environmental
concern. SES is related to income, though not quite the same, so one could say that an environmental concern spread via a diffusion process from rich to
mid-income to poor.
This is important because it gives some predictions. If
concern for worker safety is a concern of high-SES individuals today
(and it may well be – which newspapers and magazines discuss it?), then that is
actually the start of broader acceptance. Firms may soon face customers who are
broadly critical of unsafe manufacturing. And if you happen to belong to the high-SES segment, you should know that your attitudes and actions are influential.
