Standing Up for Matthew Yglesias on International Labor Standards

I missed this controversy when it broke two weeks ago, but Matthew Yglesias noted that the “entire Internet” seemed to be mad at him for a post that, really, just reflects common economic sense. He wrote:

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.

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….

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.

I would add that the choice in a country like Bangladesh often will not be Western-level safety standards and lower pay, but Western-level safety standards and unemployment, as the cost of Western-level safety standards could be sufficiently high given Bangladeshi productivity standards to price Bangladeshi workers out of the international labor market.

Yglesias should have noted that this is a tangential point to the recent tragedy in Bangladesh, because there is apparently strong evidence that the factory owners were grossly violating existing local safety laws, and there is little reason to believe that workers were aware of this and thus knowingly making a tradeoff. But Yglesias is certainly right that the horror in Bangladesh should not be compounded by pushing international labor standards that are simply too expensive to be appropriate for countries like Bangladesh. Such standards would make no more sense then requiring Bangladesh to raise its minimum wage to European standards (which cause significant unemployment even in Europe).