Sweatshops are good

Don't get into a lather over sweatshops By Benjamin Powell and David Skarbek.

People often oppose purchasing uniforms and other clothing made in "sweatshops" in the belief that they're helping oppressed workers. In fact, the reverse is true.

North American unions, such as Unite Here, the apparel and housekeeping workers' union, often lobby to impose working standards for developing countries similar to San Francisco's proposed ordinance. Though these efforts are intended to help poor workers in the third world, they actually hurt them.

We use "sweatshop" to mean those foreign factories with low pay and poor health and safety standards where employees choose to work, not those where employees are coerced into working by the threat of violence. And we admit that by Western standards, sweatshops have abhorrently low wages and poor working conditions. However, economists point out that alternatives to working in a sweatshop are often much worse: scavenging through trash, prostitution, crime, or even starvation.

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People choose what they perceive to be in their best interest. If workers voluntarily choose to work in sweatshops, without physical coercion, it must be because sweatshops are their best option. Our recent research - the first economic study to compare systematically sweatshop wages with average local wages - demonstrated this to be true.

We examined the apparel industry in 10 Asian and Latin American countries often accused of having sweatshops and then we looked at 43 specific accusations of unfair wages in 11 countries in the same regions. Our findings may seem surprising. Not only were sweatshops superior to the dire alternatives economists usually mentioned, but they often provided a better-than-average standard of living for their workers.

The apparel industry, which is often accused of unsafe working conditions and poor wages, actually pays its foreign workers well enough for them to rise above the poverty in their countries. While more than half of the population in most of the countries we studied lived on less than $2 per day, in 90 percent of the countries, working a 10-hour day in the apparel industry would lift a worker above - often far above - that standard...

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.

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Antisweatshop activists - who argue that consumers should abstain from buying products made in sweatshops - harm workers by trying to stop the trade that funds some of the better jobs in their economies.

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By purchasing more products made in sweatshops, we create more demand for them and increase the number of factories in these poor economies. That gives the workers more employers to choose from, raises productivity and wages, and eventually improves working conditions. This is the same process of economic development the US went through, and it is ultimately the way third-world workers will raise their standard of living and quality of life.