 I'm Salvatore Babonis and this week's global social problem of the week is dangerous factories. The 2013 Rana Plaza factory collapse in Bangladesh, which killed more than 1,000 people, brought factory safety back onto the global agenda. Conditions are now improving at least a little in Bangladesh's garment sector, but there's been little action in other countries and other sectors to address similar conditions that contribute to dangerous workplaces. At the root of this global social problem is the disempowerment of workers. In the absence of firm government action, only empowered workers can enforce factory safety, and on top of that, empowered workers are often the people behind firm government action. Dangerous industrial workplaces are a problem throughout the world's peripheries, and increasingly in core countries as well. Just to give a few examples, in Bangladesh, there were a series of factory fires killing hundreds of people in the 2000s, leading up to the 2013 Rana Plaza collapse. In Rana Plaza, of course, 1,130 people were killed, and several thousand more injured, many of them crippled for life. In China, factory fires and explosions are simply a commonplace part of life. Hardly a month goes by without a news story about a factory explosion in China that kills at least a dozen people. China's chemicals industry is especially dangerous and poorly regulated because the large chemicals companies in China are all state-owned enterprises, meaning that the government is both the regulator and the employer. Very often, the companies themselves are charged with regulating their own workplaces. Of course, mines are very dangerous, especially coal mines all over the world, not just in places like China and Central America, but even in the United States, where only recently there was a mine collapse that killed more than a dozen miners in West Virginia. Mines don't have to be so dangerous. They are dangerous because companies and, in many cases, individual miners simply don't want to put in the effort to make them safe workplaces. Coal mines are particularly dangerous because coal mining usually requires very little technology. As a result, very primitive companies and even individuals who are not part of any larger mining organization can undertake coal mining with simple tools resulting in terrible tragedies. The United States has seen an increase in industrial accidents in recent years as a result of declining regulation. Industrial problems in the United States are nowhere near the levels that are found in the world's peripheries, but they are much worse than they have to be and getting worse over time. The paradigmatic case of the factory accident is the triangle shirt waste fire that occurred in 1911 in New York City. The building where it occurred is actually right across the street from New York University in New York's fashionable Greenwich Village neighborhood. It actually has a view of Washington Square Park. Today it's some of the most expensive residential real estate in the world, but at the time it was a slum area informal factory where hundreds of people were crammed into terrible conditions producing garments, sewing together simple clothing. A shirt waste is an old-fashioned name for a blouse, a woman's blouse, and this factory was making these blouses at a time when women's fashion was changing from women wearing full dresses made at home to wearing modern separates, and this was an early factory making separates for women to wear skirts and tops. The problems that led to the deaths in this factory fire were all too familiar then and all too familiar today. Inadequate fire exits, there were only two exits to the building, not the three that there were supposed to be. Locked fire exits, so of the two existing fire exits one was locked. An untidy workplace, there were scraps of clothing and oil from sewing machines all over the floor littering the workplace. As a result the fire spread very rapidly once it started. There was inadequate firefighting infrastructure, of course no sprinklers, simply pails of water next to the workplaces that could be used to douse small flames. And at the root of all the problems disempowered workers who had no union and no ability to influence their employers to insist on safer working conditions. In the triangle shirt waste fire as in factories around the world workers are very aware when working conditions are unsafe, but if they feel they will lose their jobs by complaining often they keep quiet. Perhaps the worst factory accident ever was the Rana Plaza collapse in 2013 in Dhaka blank Bangladesh. Just like triangle shirt waste Rana Plaza was making blouses for women and other kinds of simple cheap clothing. Thus the comparisons are inevitable that in a century of factory regulation we have in the end gotten nowhere. Rana Plaza suffered many of the same sorts of situations that led to the triangle shirt waste deaths, but here it was a collapse, not a fire that caused the ultimate tragedy. The problems that led up to the immediate collapse of the factory, first the building was built for offices not for factories. The same is true of the triangle shirt waste factory which was built for residences but was in fact being used as a factory. Diesel electric generators were installed in the top floor. In Bangladesh power regularly goes out when the power goes out factories start up diesel generators to power their equipment. Installing heavy diesel generators on the top floor of a building that was built for light office use was completely negligent in the first place and resembles the kinds of negligence that were reflected in the triangle shirt waste factory of simple bad preparation for emergencies. And finally the Rana Plaza collapse was characterized by gross negligence on the part of the employer. On April 23rd 2013 cracks appeared in the building and people ran from the building and evacuated. The employers declared the building was safe, demanded all workers return and threatened to fine workers two months wages if they didn't come back to work on the morning of the 24th. Of course poor people in Bangladesh facing that kind of threat do go back to work and on April 24th in the morning there was a power outage. The generators were turned on as they normally are in a power outage and the building collapsed from the vibrations produced by the generators. The key lesson here is well yes there are terrible working conditions there are difficult problems in poor countries in the world but ultimately what it comes down to is disempowerment. People knew that the factory was not safe. In fact people had run out of the factory just the day before. They returned to work in that unsafe factory because they did not have the resources to fight the demands of the employers that they return to work. Much industrial activity is inherently dangerous but good social policy can have a dramatic impact on the number and intensity of accidents. Most of these accidents like triangle sherd waste like Rana Plaza are completely preventable. According to data from the international labor organization and intergovernmental organization covering labor issues the industrial accident death rates for countries vary from a low of one industrial death per 100,000 workers in France and the UK up to two times as high two work deaths per 100,000 workers in countries like Australia and Germany. More than three deaths per 100,000 workers in the United States where factory regulation is relatively lax. Greater than 10 in most semi peripheral countries like Brazil and China and from 30 to who knows how high in peripheral countries like Bangladesh the countries of Sub-Saharan Africa, India. For many countries we simply don't have any realistic statistics of how many people are dying in industrial accidents. For those poor countries of the world for which we do have statistics rates of 30 deaths per 100,000 employees every year are common but for most countries we simply don't have data. Now to some extent these differences in death rates represent differences in industrial composition. The United States has more deaths than most European countries but the United States also has more people employed in dangerous industries. But industrial composition itself is partly determined by safety standards. One reason the United States has more people employed in dangerous industries is that the United States has poor regulation so dangerous industries prefer to locate in the United States instead of locating in Europe. Of course the incentives for those dangerous industries to relocate to poor countries like China and Bangladesh the incentives there are simply massive. Companies regularly move to places where they will face less government regulation and less empowered workers. Partly this is the result of what's called regulatory arbitrage. Arbitrage means exploiting different standards or different prices in different places. Regulatory arbitrage specifically means searching out locations that have the weakest levels of regulation in order to locate in those places. Another important cause of companies moving to low regulation environments is outsourcing or its most common variant subcontracting. Outsourcing occurs whenever companies buy products from other companies instead of making them for themselves. Subcontracting is the most common form of outsourcing. In subcontracting instead of making a product itself a company contracts with another company to make the product for it and that subcontractor often subcontracts with a sub-subcontractor to make the product for it. It's not uncommon to find four or five steps in the chain separating the ultimate brand that is selling the product to a western consumer and the actual manufacturer making the product. The contracts may be subcontracted and sub-subcontracted in a chain of four or five times to get to the ultimate producer. Now some companies do resist these trends and try to produce high quality products with safe working conditions but of course those companies either suffer lower profits because they have to pay higher prices for their inputs or they suffer lower sales by passing on the high price of production to consumers. So ultimately this problem affects nearly all companies because if even a few companies seek lower costs through regulatory arbitrage or subcontracting in the end entire industries move in that direction. Subcontracting is often used by companies to establish a moral distance between themselves and what is really happening in the factory. Subcontracting and sub-subcontracting are widely used in industries where quality control is relatively unimportant. Think of mass market clothing. You may think that you like high quality clothing but in fact very few of us notice if the seams on clothing are exactly properly sewn, if there are loose threads, if the measurements of a piece of clothing are one millimeter incorrect in a particular dimension, if colors are the tiniest shade off from the intended color of the garment. Very few of us notice these tiny imperfections in clothing and as a result clothing is a prime candidate for subcontracting. Similarly small household goods like brooms, mops, toilet brushes, very few of us notice if a toilet brush is not properly made or if a broom has bristles that fall off the broom as we sweep. These are not things that lead us to change our broom supplier and as a result imperfections are tolerated and subcontracting is the model for production. Similarly with small appliances, small appliances often use substandard or low standard original equipment. So for example you might buy a toaster because you like the appearance of the toaster but nobody buys a toaster because it has a very safe, well made electrical plug. None of us think about, none of us even know what kind of electrical plug is attached to our toaster. We simply assume that the electrical plug is of reasonable quality without really knowing. Again these are prime candidates for subcontracting. Subcontractive products are often made to specification with little or no human contact between the producer, the ultimate producer in the peripheral country and the ultimate brand that's selling you the product in a core country. If you think about it when you go to the department store to buy a toaster, the person selling you that toaster probably doesn't even know what country it was made in. That person certainly doesn't know anything about the factory conditions in which the toaster was made. This results in a moral distance between the seller of the product, the person actually facing the consumer and the people making the product itself. People don't feel responsible for selling a product that was made with poor working conditions because they don't even know about the poor working conditions in the first place. In the most extreme cases there's not just an unsafe factory behind your clothing or your toaster. There's no factory at all. Many companies have now moved to putting out systems. The putting out system is a system that was popular in the early phases of industrialization in the West where instead of factories people made clothing or did simple industrial tasks in their own homes and brought the finished product to the factor or the buyer to deliver to the company that commissioned them. In fact our very word factory has nothing to do ultimately with a building in which things are made. A factor was a person who purchased goods, went around to farm houses purchasing goods from people who produced them on contract as subcontractors to a company that would then sell them on to consumers. Bringing that factor's work into a central location was the origin of our word factory. Well we still have the putting out system with us today. Here's an example of a putting out factory that's doing recycling work in China. You would hardly recognize this as a factory. In fact this is the back room of somebody's house but in practice it is a place where factory work is being done. Garbage is being picked apart to look for valuable components which are then sorted and returned to a recycling company that commissions the work from them. The international labor organization estimates that there are over 1 million work-related deaths each year in the world. There are numbers actually 1.1 million deaths. This compares with less than 1 million for road accidents, less than half a million for malaria, less than a third of a million for AIDS. Workplace deaths are a bigger source of death in the world today than AIDS and malaria put together. And like AIDS and malaria, workplace accidents affect mainly people who are young and in the prime of life. These are not terminal old age diseases. These are all things that affect people in the most productive years of their life when they have children and elderly parents to care for. Hundreds of millions more are injured and exposed to toxic substances. Literally billions of people, probably the majority of the world's workers, experience the conditions that lead to these deaths and diseases. Harsh working environments, unresponsive employers, unresponsive governments, and most importantly disempowered workers who have no union or other protections to help them fight or demand better conditions for themselves. Key takeaways. First, the triangle shirt waist and rana plaza accidents are two notorious examples of deadly factory accidents. Second, outsourcing and subcontracting allow companies to establish moral distance between themselves and the dangerous work done on their be halves. Third, more than 1 million workers a year are killed in workplace-related accidents more than for most major diseases. Thank you for listening. You can find out more about me at salvatrobobonus.com where you can also sign up for my monthly newsletter covering current international affairs.