Foreign Factories Should Be More Dangerous

Moneybox
A blog about business and economics.
April 24 2013 2:38 PM

Different Places Have Different Safety Rules and That's OK

Bangladeshi volunteers and workers load dead bodies onto a truck at the site of a building collapse in Savar, on the outskirts of Dhaka, on April 24, 2013.
Bangladeshi volunteers and workers load dead bodies onto a truck at the site of a building collapse in Savar, on the outskirts of Dhaka, on April 24, 2013.

Photo by Munir Uz Zaman/AFP/Getty Images

UPDATED April 26: See here for further thoughts more appropriate to the timing and circumstances.

It's very plausible that one reason American workplaces have gotten safer over the decades is that we now tend to outsource a lot of factory-explosion-risk to places like Bangladesh where 87 people just died in a building collapse.* This kind of consideration leads Erik Loomis to the conclusion that we need a unified global standard for safety, by which he does not mean that Bangladeshi levels of workplace safety should be implemented in the United States.

I think that's wrong. Bangladesh may or may not need tougher workplace safety rules, but it's entirely appropriate for Bangladesh to have different—and, indeed, lower—workplace safety standards than the United States.

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The reason is that while having a safe job is good, money is also good. Jobs that are unusually dangerous—in the contemporary United States that's primarily fishing, logging, and trucking—pay a premium over other working-class occupations precisely because people are reluctant to risk death or maiming at work. And in a free society it's good that different people are able to make different choices on the risk–reward spectrum. There are also some good reasons to want to avoid a world of unlimited choice and see this as a sphere in which collective action is appropriate (I'll gesture at arguments offered in Robert Frank's The Darwin Economy and Tom Slee's No One Makes You Shop At Walmart if you're interested), but that still leaves us with the question of "which collective" should make the collective choice.

Bangladesh is a lot poorer than the United States, and there are very good reasons for Bangladeshi people to make different choices in this regard than Americans. That's true whether you're talking about an individual calculus or a collective calculus. Safety rules that are appropriate for the United States would be unnecessarily immiserating in much poorer Bangladesh. Rules that are appropriate in Bangladesh would be far too flimsy for the richer and more risk-averse United States. Split the difference and you'll get rules that are appropriate for nobody. The current system of letting different countries have different rules is working fine. American jobs have gotten much safer over the past 20 years, and Bangladesh has gotten a lot richer.

*Correction, April 24, 2013: This post originally misstated the deaths as arising from a fire rather than a building collapse.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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