The Virtues of “Sweatshops”

This Christmas season witnessed no shortage of protesters who were outraged at the thought of all the nice gifts exchanged over the holiday season having been manufactured in so-called “sweatshops”. In an act of monumental hubris, middle-class Harvard students, rich but still angry, threw graffiti over store fronts in high-end shopping districts throughout Boston to protest what they believe to be unbearable working conditions in sweatshops from Salvador to Sri Lanka.

Unfortunately, such displays of ignorance are becoming commonplace among the “educated” bourgeoisie.

One thing that many of the protesters seem not to understand is that in order to have unbearable working conditions, there must first be work. Work is something that many of the poorest economies around the world are desperately short on (and if the protestors had their way, there would be even less).

Unemployment is still astronomically high, by Western standards, in many of the nations with the competitive advantage of inexpensive labor. Another thing rarely considered by the protesters is that the workers in such factories are not coerced to stay. They stay because the money they earn is commensurate to the work they perform and is equal to or greater than their local alternatives.

This last point is worth emphasizing, so let me repeat it: The workers stay in “sweatshops” because the money they earn is commensurate to the work they perform and is equal to or greater than their local alternatives.

In other words, without the so-called “sweatshops”– in the workers own judgment–the workers would be worse off. They would be worse off, because they would be placed back in the position they were in before the “sweatshops” existed: perhaps working in fields, living hand to mouth, and earning even less money (if any money at all).

Another point of confusion for so-called “anti-sweatshop” protesters is that differences in labor productivity exist and have real-world economic effects on job creation. This is a point that requires some understanding of how the global economy works.

The fact is, American and European companies open factories for low-skilled and labor-intensive manufacturing in countries where the cost of labor is low. If factory wages in Bangladesh were equal to those in France, there would be little incentive for French companies to relocate in another part of the world.

By the same token, with lower wages, Bangladeshi workers can incentivize foreign companies to create jobs that would otherwise not exist. This is one example of the pro-growth effects of globalization. Globalization has expanded the economic efficiencies created by specialization and the division of labor on an international scale.

Of course, this doesn’t mean that globalization will involve the wholesale export of all types of jobs to developing countries. For instance, doesn’t expect to see large American software companies opening manufacturing plants in Taiwan or China anytime soon. But many jobs, particularly high-skilled, labor-intensive ones, require a certain level of worker productivity and therefore poorer countries, where that productivity is comparatively low due to education levels and the lack of automation, have less value to add. In fact, the only way that these poorer countries can add value is in the area of low-skilled, labor-intensive work.

Considering these economic realities, it would seem that the anti-globalists have nothing to fear. But still the rhetoric about “sweatshops” continues, despite the fact that it is misleading, and it must be said that efforts to threaten Western companies that are capitalizing on the comparative advantages of developing countries are ultimately hurting the poorest citizens of the world.

If actions speak louder then words, then it is safe to say that the welfare of the poorest citizens of the world is not the Harvard protestor’s goal. If Harvard students wish to end “sweatshops” let them create a better alternative. That they fail to do so speaks realms of their real, self-serving, irrational motives.

  • T D

    You nailed this one right on the head! Kind of like the CEO short term focus on maximizing shareholder profits your rhetoric lines up with ensuring a quick fall of our “God Blessed” land.

    “Of course, this doesn’t mean that globalization will involve the
    wholesale export of all types of jobs to developing countries. For
    instance, doesn’t expect to see large American software companies
    opening manufacturing plants in Taiwan or China anytime soon. But many
    jobs, particularly high-skilled, labor-intensive ones, require a certain
    level of worker productivity and therefore poorer countries, where that
    productivity is comparatively low due to education levels and the lack
    of automation, have less value to add. In fact, the only way that these
    poorer countries can add value is in the area of low-skilled,
    labor-intensive work.”

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