Sweatshop study

In today’s issue of The Christian Science Monitor, comes an op-ed piece discussing last year’s research study –Sweatshops and Third World Living Standards– regarding living standards among those employed by “sweatshops” in off-shore production facilities.

In 9 of the 11 countries we surveyed, the average reported sweatshop wages equaled or exceeded average incomes and in some cases by a large margin. In Cambodia, Haiti, Nicaragua, and Honduras, the average wage paid by a firm accused of being a sweatshop is more than double the average income in that country’s economy.

The new news of the study is that the paper, Sweatshops and Third World Living Standards by Benjamin Powell and David Skarbek has been slated for publication in the Spring 2006 issue of the Journal of Labor Research. The authors state:

Our findings should not be interpreted to mean that sweatshop jobs in the third world are ideal by US standards. The point is, they are located in developing countries where these jobs are providing a higher wage than other work.

I’m assuming you’re not a subscriber to the Journal of Labor Research and you don’t have to wait till spring to read the report; you can read the paper here. Similarly, this is not the only research over the past several years to assert the counter-intuitive benefits of overseas facilities. Thanks to Eric for the tip.

For another perspective on the topic of sweatshops, see Defending Sweatshops: Too Much Logic, Too Little Evidence by Richard Rothstein who says in part:

“… the absolutism of the free-marketers is that their logic applies equally to domestic social welfare legislation that they fail to oppose with equal vigor. There are, of course, conservatives and business leaders who claim that our own minimum wage, social insurance, and health and safety laws hurt the very workers these laws intend to benefit. Whenever a domestic minimum wage increase is proposed, they insist that the result will be low-wage workers’ unemployment, not increased compensation…”


“Not quite a century ago, this indeed was the argument made by business leaders and economists against regulation of our own sweatshops. They asserted that sweatshops were good for children because the alternatives were worse. For example, they often cited Charles Wardell Stiles, a medical crusader for the treatment of intestinal parasites among rural children, who argued that employment in factories was beneficial because children could more easily be treated in factory towns than home on “soil polluted farms.” In a tone similar to that of sweatshop supporters today, novelist Julia Magruder denounced “ignorant sentimentalists” who saw misery only in sweatshops and not in the worse conditions of unemployed children. Manufacturers testified that child labor was a necessary first step in industrialization because adult hands were too “knitted and gnarled” for factory work; Only children were nimble enough, and if they were not permitted to work, their families would go hungry and fail to settle in cities where, at least, future generations might prosper. If twelve-year-old children of destitute widows were deprived of work, a typical manufacturer challenged a congressional committee, what are these families going to do?”

and lastly, regarding the activism of the noted retailer Edward Filene:

“The most vocal crusader for minimum wage regulation in those days was Edward Filene, a wealthy retailer who was nonetheless active on behalf of the National Consumers’ League that led minimum wage agitation. Modest increases, Filene concluded, forced employers to better train low-wage workers, so that higher productivity would justify higher wages. In the absence of minimums, too many firms were lazy and uninformed-not required to pay higher wages, they got by without the training or organizational improvements that generate productivity advances.”

The latter of course goes directly to the core of this industry’s abysmal and lamentably poor history regarding investment in plants and people.

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  1. Carol says:

    Useful insights, reminding us not to apply blanket standards (“those little kids should be in school!”)to other countries. Like assuming “everyone” has access to any kind of public education. Even here, in the 1800’s, farm children managed school only when their families’ needs were not overriding, which originally mandated a short term during the winter months.

    Freedom of exchange – goods, services, tourism – means access to other countries’ lifestyles and standards. If we’re so great (and in some ways we are), then visitors will be eager to translate and apply our methods back home.

    “Raising poor countries’ standards of living will lower ours.” This is true, but you have to look at the staggering difference of scale. Say, U.S. families ordering takeout pizza twice less a month in return for third-world people not having raw sewage running outside their doors. Establish a sweatshop with the workforce of young adults/kids, generate enough income for the village to sink a well, and incidently reduce typhoid?

    There was a “sweatshop” in Denver some years ago, where the owner came over here on a religious scholarship while in his teens, got his education and U.S. citizenship, sent for his brother blah blah blah cousin/wife/older children/parents/grandparents. Their cut-and-sew place was staffed by their young women, with cribs next to the industrial machines. They were singing, joyously, while they worked.

  2. Susan McElroy says:

    My personal position as to “sweatshops” is also ambivalent, so I don’t usually take a strong stand on it. I lived in Mexico for 13 years, and my ex-husband’s family was deeply involved in sewing-related business. His dad made curtains and bedspreads for his “decorating” business (mostly installing carpet and supplying drapes and shades of middling style but high quality) that employed extended family members for a generation. Though all were low paid and somewhat exploited, his paternalistic attitudes saw to it that none went hungry or without the occasional luxury. Most also did piece-work for other manufacturers in their homes (typical story) and were hugely exploited, much more than by my ex’s dad. A close relative even died of cotton lung at 42, though I don’t think any of them ever really blamed her working life for it–it was just one of those things, according to them. All were very happy for the work except one, who left it to teach sewing at a tech school. Nearly every person I knew from that group claimed that U.S. companies treated their workers better than Mexican owned companies, and most accused the naturalized middle-easterners (Lebonese, mostly) as the biggest exploiters. I have no idea what to believe. Also, I chatted with this friend/ex-relative a couple of weeks ago and she says nearly all the factory work of this type has gone to China…

  3. Susan McElroy says:

    I thought of more to say on this. I say a “generation” because most of the children of the generation that worked for him went on to other things when they could (without bitterness) and their kids (the same generation of my own kids) went even higher up the ladder. Most of the latest generation attended some college or finished it, especially the boys. My ex-husband was extremely atypical of the group, going all the way to the PhD and getting a post at the university, where he still is, but it occurs to me that this was also part of the informal “plan” of this group and is also typical. He was considered the scholar and was encouraged to study, not take part in the business. Funny stories abound about how he was so spoiled he would sit down at the table and a meal would magically appear–if he turned up his nose slightly another meal would quickly take its place. (No wonder we divorced…)

  4. Susan McElroy says:

    I had to leave on an appointment, so here’s more on this. Perhaps in many societies, an apparel “sweat” job is like a job at McDonald’s.(sorry, Ronald) Cheesy work, no future for an educated person, great first-time job for entry immigrants and students, but just about everybody moves on, except those who for whatever reason find the work fits in their life-plan, or in places where better jobs never arrive. That in itself might explain why working conditions don’t improve, at least in the present day environment. Even in the worst of the days of the “shirtwaist” tragedy, the women working there were at least assumed to be somewhat temporary–the social “plan” was for them to get married and leave as other “low value” workers took their places. I’m in no way defending exploitation of workers, at Mc-wherever or at garment factories. But the low skill requirements of these places seem to invite this type of arrangement. Comments?

  5. Susan McElroy says:

    OK, I read one of the articles, and I will add this before I get back to chores. One should always remember the reason for the term “sweatshop”, or at least the meaning I’ve been taught. The owner of the factory isn’t always the person to blame in a “sweat” environment, because the term refers to the fact that there are so many factories in the world, they have to bid very low on a job in order to get the work. I.e., the real beneficiaries of the system are higher-up; those who offer the work and choose between highly competitive alternative cut-sew shops to do the job. The factory owner has to “sweat” the very narrow margin out of his profits or someone else will get the job. From what I’ve read, the real beneficiaries of the system of cheap labor are those who own the label. Of course, they have to watch their back as pirates are always around to cut into their livelihood that way. The whole thing is so complex, and people have been arguing both sides for so long, that I just can’t take a position any more.

  6. What is up with the recent spate of comments by new people with mysterious links? Is it a marketing ploy? It’s really annoying because I check the comments daily for interesting insights by members of your reading community, and it’s a waste of time to read “great sight, ***insert weird link here***.”

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