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Sweatshops: A Blessing in Disguise?

By Edited Jul 12, 2015 0 0

In terrible enough conditions, sweatshops may actually support communities.

         Believe it or not, sweatshops actually help those in poverty. International companies are often viewed in a bad light when their use of sweatshop labor is discovered. This however is unfounded as long as the companies in question follow the rules and laws of their host country. With the upholding of these laws at their lowest form, comforts are admittedly few and far between. However by maintaining skeletal spending on payment and labor, these manufacturing houses are able to offer jobs to more people, and in doing so, save that many more from unemployment and absolute poverty

 

            I will begin by zooming in on the plight of some sweatshop worker in  El Salvador. The notion that all sweatshops are unsanitary and dangerous, one that the opposition would have you believe is incorrect. While this does describe some institutions, many care for and support their workers. One Salvadorian woman says 

“I do like to work here. I don’t like working in the fields anymore. I make more money here so it’s better here. There are also other benefits the company provides and that help us at home and with the family. . . . I think that working in a factory you have the benefit of having medical insurance, medicine, and benefits such as now they are providing school packages for our children who go to school. They give us vouchers for shoes. Those are benefits you can have at a company. In a job as a housekeeper, you don’t get any of that. It does have its advantages sometimes because you don’t have to pay for transportation or food but you don’t get any other benefits. While here at the factory, you do have some things. You can go to them for assistance and if they can help you, they do." (Subject 10) Does this not sound better than the account of journalist Nicholas Kristof, who reports on children who survive by picking through a vast garbage dump for plastic in Phnom Penh, Cambodia. These children, he reports, hope to someday work in a sweatshop instead of scavenging through the dangerous, dirty trash heaps.

 

          One must recognize that not all descriptions of low paying third world employment consist of horror stories. In fact, many are able to make a comfortable living working at factories that pay workers well above poverty income levels, as seen when  “We asked subjects if pay at their current employment was sufficient to provide for their needs. Forty-eight percent of respondents answered in the affirmative with no qualifications. Forty-one percent answered in the affirmative, but noted hardships in doing so. One subject answered that her current pay was insufficient to meet her needs, and two subjects noted that they also rely on the contributions of family members.”

 

          Powell and Skarbek (2006) examine wage estimates given by sweatshop critics and find that in nine out of eleven countries, sweatshop wages equal or exceed the country’s average income. For seventy-hour workweeks in Cambodia, Haiti, Nicaragua, and Honduras, sweatshop wages are double the national average income. In nine out of ten countries for which apparel related sweatshop wages were available, employees earned wages equal to or greater than the country’s average national income by working fifty hour workweeks.

 

Brown, Deardorff, and Stern (2003) document that multinational firms regularly pay higher wages and provide better working conditions than local firms.

 

             This research tells of an institution which makes it possible for a large amount of people to live better than they could have, should such factories engaged in more charitable practices. As we have discussed, the bottom line in business dictates the amount of workers a company can employ while still making financial sense. Should the workers receive more money, over all benefit to the population would fall due to loss of employment capability. Those working would prosper, but downsizing would inevitably throw the rest into even deeper poverty in relation to their now better paid peers.

          Investment by outside companies can also help bolster weak economies. For instance, the World Development Record stated ‘’Private investment in the low performance East Asian economies showed an earlier and larger rise relative to other economies than did public investment”, Proving that help from large corporations did more for countries than they them selves could alone.

 

          Lastly, these companies race to skirt just over what is legal in their places of business most basically because it is the standard practice. Competition between companies keeps them searching for ever more efficient ways to undercut prices. The following of only the bare minimum in rules is moral due to the fact that in doing so, the maximum number of people are employed, and the company can stay afloat to keep this source of employment secure.

 

 


Sources

Sweatshops, Opportunity Costs, and Non-Monetary Compensation: Evidence from El Salvador

David Skarbek, Emily Skarbek, Brian Skarbek, and Erin Skarbek

 

World Bank, World Development Report 1995: Workers in an Integrating World (New York: Oxford University Press, 1995).

Young, Alwyn, "Lessons from the East Asian NICS: A contrarian view," European Economic Review38 (1994) pp. 964-73.

Young, Alwyn, "The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience," The Quarterly Journal of Economics Vol. CX, No. 3 (Aug. 1995) pp. 641-80.

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