$40 million fund for victims of Bangladesh garment tragedy

Mourners hold up portraits of their missing relatives, presumed dead following the April 24 Rana Plaza garment building collapse, at the scene during the one hundredth-day anniversary of the disaster in Savar, on the outskirts of Dhaka, on August 2, 2013.

Eight months ago, a clothing factory in Bangladesh collapsed, killing more than 1,100 workers, in the industry's deadliest incident ever.  Now comes news that families of those workers will get some financial help. Four retailers that bought the factory’s clothes have agreed to pitch into a fund — paying out an average of 25,000 dollars per household.

How far would that go in a country where per capita income is $1,900 a year?  

Here's a first bit of context, courtesy of Scott Nova, director of the Workers Rights Consortium.  If $1,900 sounds incredibly low to you, that’s actually a lot more than the victims were making.  

"The workers who were killed were making about $600 or $700 a year," he says.  

According to one recent study by his group and the Center for American Progress, Bangladesh has the world’s lowest wages for garment workers. Against numbers like that, a $25,000 payout looks a little bigger.  

"Obviously it means more there than it does here," Nova says.  "But at the same time it’s not going to make anybody wealthy, even in the Bangladeshi context."

Especially because it’s going to be paid out over the lifetime of survivors. Every year the families will get about half of what the worker would have earned.

U.S. government have several calculators that peg the value of a human life here.  They start at $6 million.  

Individuals buying life insurance in the United States have to make their own calculations. Jack Dolan, a spokesman for the American Council of Life Insurers, cites advice from the financial planning industry. "They tend to say that a person should have seven to ten times their annual income in coverage," he says.

In the end, a translation may not be possible, says Brad Adams, director for the Asia division of Human Rights Watch. "It’s so hard and some people would say almost pointless to compare the US to Bangladesh," he says.

In the U.S., he points out, if your boss’ building fell down on you, your family would expect to be compensated.

"In Bangladesh, there’s no such protection," he says. "People are really in it all by themselves."

In the absence of legal requirements, the companies involved in this agreement — retailers from France, Spain, Canada and Ireland — are all contributing voluntarily. 

Several big U.S. brands also did business with the factory:  Walmart, Children’s Place, JC Penney, Sears. 

At this point, none of them have volunteered to kick in anything.

About the author

Dan is a sustainability reporter for Marketplace.

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