Letter to the Editors

Against the Current, No. 161, November/December 2012

Chris Wegemer

The argument for sweatshops comes not only from “free market” ideologues but sometimes from voices of establishment liberalism. See a controversial column by Nicholas Kristof, “Where Sweatshops are a Dream” (http://www.nytimes.com/2009/01/15/opinion/15kristof.html). The following is a refutation of this kind of “choice.” — The Editors]

A LIFE OF unemployment, destitution, criminal activities? Or 14-hour days in an abusive and hazardous sweatshop? It is unfathomable that anyone would have seriously told you that these are your only two career choices. Why would we think that it is acceptable for others to be forced into this dilemma?

Surprising twists are always catchy.

“What countries actually need is more sweatshops, not less!”

Saying this might make us feel we have some kind of insider information, that we are intelligent enough to challenge the common knowledge that sweatshops are bad. Arguments behind the praise for sweatshops are too narrow in scope and too simple to justify its grand conclusion.

“Sweatshops are necessary for development.”

Sweatshops by themselves do not lead to development. Low-wage employment must at least be accompanied by other social and economic initiatives to have benefit (and even then, it is not conclusive that sweatshops are required).

What is “development,” anyways? Cer­tainly it includes an increase in quality of life. This cannot happen when the workers are paid a wage that only covers a fraction of the expenses of living, locking them in a cycle of poverty.

Central to the argument for more sweatshops is that when more people are employed, fewer workers will be available, so wages will naturally increase in order to attract laborers. But because employers have complete power over unskilled workers, wages are pushed as low as possible to maximize profits and will remain stagnant.

The bottom line: sweatshops are not sufficient, and may not be necessary, for economic growth. No correlation (much less proven causation) has been established between the number of sweatshops per capita and how quickly a country grows in wealth. The fallacies of archaic development theories are far too often still assumed to be true. Simply because rich countries formerly had sweatshops is not sufficient reason to assume they are required to attain wealth.

“Interfering in markets will make people worse off overall.”

The science of economics is not concerned with morality as we think of it; the highest virtue is efficiency, not equity. Yet “free markets” are incessantly invoked as having a transcendent power to solve all humanity’s problems. Economists might be satisfied as long as supply equals demand, but ensuring justice for human beings requires more than just optimizing prices.

The wage that the market says workers should be paid does not take into account externalities. The “invisible hand” lacks eyes to see that sweatshops leave children without care or education, that exposure to dangerous conditions causes chronic health problems in entire communities, not to mention cultural deterioration and social security issues. Also forgotten is that sweatshops are not actually free markets in the first place; prices are set by large corporations whose market power allows them to control competition in supply chains.

An economist might argue that a higher cost of labor (through increasing wages and better working conditions) will reduce the demand for workers, so while a few workers will get paid more, many more will be laid off. Recent establishment of a model factory, Alta Gracia in the Dominican Republic, has shown that this statement is not universally true; labor standards can be raised without negative effects (and can even increase worker productivity, generating more profit for the factory).

“Sweatshops have workers, so people must want to work there.”

In some situations, working in a sweatshop may be preferable to other options (such as prostitution). But since when does “better” mean “acceptable”? It is clearly better to have a few things stolen rather than everything, or to be abused once rather than continuously, but no one would ever call any of these outcomes “good.”

Economists assume that when workers are hired, they are freely choosing to work because it is better than any other option available. But for the poor, the only other options are often destitution and crime.
The choice is hardly a free one. Workers accept the job out of desperation. Employers do not pay what the labor is worth, but as little as they can get away with. These workers are vulnerable and need to be protected by regulations.

Given the choice between no income and working in a sweatshop, impoverished men and women might say that they want sweatshops. But the choice does not have to be between no jobs or bad jobs, a third option could exist: good jobs.

For many consumer products, including apparel, the worker who actually made the item is paid around 1% of what it is sold for, while the foreign corporation collects over 80%. Companies do not have to use sweatshop labor to be profitable. No worker would praise sweatshops if they knew that it was equally possible for them to earn a living wage in a safe environment.

When unions organized to raise the standard of living of workers in the United States nearly a century ago, many of these same faulty lines of reasoning were used by business leaders to keep costs low. The present is a repeat of the past. Sweatshops do not have to exist, they are not an equitable (or even efficient) outcome, and there are alternatives that do not have negative effects.

Arguing that sweatshops are essential gives them a legitimate place in our society. If we consistently justify the use of exploitation, then how will we ever get rid of it?

Common sense is often common for a reason. The way to get rid of sweatshops is exactly that: to get rid of sweatshops. Not to promote them. Increasing the number of sweatshops will not cause them to naturally evolve or magically disappear. Forces beyond economics are necessary to bring equity to societies. But simple bumper sticker slogans are never the answers; considerations discussed here show that campaigns must be carried out intelligently to be certain they do not hurt the people they intend to help.

Towards Real Solutions

Anyone who has seen “made in” tags knows that manufacturing is done all around the world. Ultimately, sweatshops are a global problem, and to completely eliminate them, global solutions involving collaboration of worker unions, governments, consumers, businesses, and independent monitoring agencies will be needed.

In the far future, strong international laws may universalize human rights for all peoples. But at the present, many foreign governments are having a hard enough time enforcing what few regulations actually exist within their borders. Wealthier countries could take responsibility by requiring that imported products be made under fair labor conditions. Precedents for these types of regulations already exist to combat child and prison labor. The WTO could be adapted towards a similar end.

In the United States unions are often looked on with a tinge of negativity, accompanied by adjectives such as “unnecessary,” “argumentative,” “socialist,” or “antiquated.” We forget that collective bargaining is the reason we continue to enjoy high labor standards.

In poorer countries, workers are often denied even the most fundamental ability to fight for their own rights; factories are shut down at the first sign of organization and leaders are murdered. Any widespread solution to sweatshops will require the empowerment of the labor force.

Without unions or strong government intervention, the burden of stopping sweatshops falls to one group of people: us. Consumers have the power to hold corporations accountable for ending exploitation.

With our purchases, we are essentially hiring workers abroad to make our products and are responsible for the conditions they have to endure. To consume conscientiously, we have to stay informed. Monitoring agencies inspect factories and relay information to make sure that corporations are doing what they claim, but most of these groups are funded by the same corporations they are evaluating. Only a few groups are entirely independent and unbiased, such as the Worker Rights Consortium.

Working for social justice, we need to keep in mind the true long-term solutions while doing what we can to cause change in the present. Maintaining the status quo would only ensure the world will have more sweatshops that will exploit more people and keep them in dire poverty. Finding a real solution never involves continuing the problem. #8212; Chris Wegemer

November/December 2012, ATC 161