The change in working conditions abroad will have a massive impact to the market outcomes for workers in the apparel as well as retailing industries in the United States. The changes will mean an increase in cost of production for the goods. The company will not watch as it incurs excessive expenses without reliable returns. Therefore, the companies will require exclusive consideration of the manner by which they will recover their costs. In return, the companies will charge higher prices for the products.
Following the increased costs, the apparel and retailing industries, which may not have much said on the prices of the products will be forced to cut the costs of the goods. Therefore, they will consider the salaries of the workers, and they will have to reduce them. Therefore, the workers in the United States will have to tolerate low salaries. The effect will be the definition of instability of the employees in the United States.
Many Europeans have their companies in Bangladesh. However, there are massive problems of fire and building safety. Therefore, the European-dominated group and American-dominated group require them to improve the working conditions and environment. Bangladesh will bear the cost of improving the working conditions and that will make them not to ever corporate with the European and American companies including Wal-Mart, Gap, and Target, which will lead to the European and American firms lacking cooperative partners.
The effect of Bangladesh covering the costs alone would lead to extensive challenge to the development of the European and American companies. If they fail to cooperate with the domestic leadership in the improvement of employment status in Bangladesh, they will be in for a shock that will affect their operations massively. There will be a negative effect for prices of the products that the companies will be willing to charge in the land. They will have to bear extensive burden of high costs of operations since they cannot access friendly operations for their businesses such as reduced costs of operations.
It is clear that costs and prices are interlinked. There are forces that hold costs and prices together. There is a tendency of the prices increasing following an increase in cost of production of goods. The improvements for working conditions in Bangladesh will come with an increase in cost. The new conditions must be satisfied with proper alignment of policies, and they will require new or extra charges as costs.
As a result, of the reduction in prices many employees will not be willing to work for the company again. They will prefer quitting the job since it will appear to be wasting their time as a major resource for development in return for extremely low income. On the other hand, it will lower labor in the companies, and the output of the European and American company will have to reduce.
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