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THE USE OF SWEATSHOP IN DEVELOPING COUNTRIES: ARGUEMENT FOR AND AGAINST

By Dr. Jones B. Olajide

Introduction

Sweatshops is any workplace in which workers are subjected to extreme exploitation, which includes not providing workers with benefits, acceptable working conditions, or a living wage. A living wage defers from minimum wage by enabling workers to cover the cost of basic needs, such as food, shelter, and healthcare; minimum wages usually do not cover these costs. Sweatshops are a product of the global economy and so-called “free” trade. Companies increase profits by driving down costs any way possible, so they set low- cost factories. To minimize costs, companies look for places with the lowest wages and human rights protections. Sweatshops can be found all over Central and South America, Asia, Africa and certain regions of Europe.

Sweatshops are also sometimes implicated in human trafficking when workers have been tricked into starting work without informed consent, or when workers are kept at work through debt bondage or mental duress, all of which are more likely in cases where workforce is drawn from children or uneducated rural poor. Because they often exist in places without effective workplace safety or environmental laws, sweatshops sometimes injure their workers or the environment at greater rates than would be acceptable in developed countries (Irtcleveland, 2004).

Sweatshops have proved a difficult issue to resolve because their roots lie in the conceptual foundations of the world economy. Developing countries like India, China, Vietnam; Bangladesh and Honduras encourage the outsourcing of work from the developed world to factories within their borders in order to provide employment for their people and profits to their employers. The shift of production to developing countries is part of their process known as globalization, but may also be described as neoliberal globalization to emphasize the role that free market plays in outsourcing (Bellamy, 1997). Bellamy (1997) further stated that an area of controversy between supporters of outsourcing production to the third world and the anti-sweatshop movement is whether such standards can or should be applied to the workplace of the developing world.

Arguments for and against sweatshops

Sachs (1997) said, “My concern is not that there are too many sweatshops, but that there are too few.” Sachs and other proponents of sweatshops cite the economic theory of comparative advantage, which states that international trade will, in long run, make most parties better off. The theory holds that developing countries improve their condition by doing something they do “better” than industrialized nations (incase, they charge less but do the same work). Developed countries will also be better off because their workers can shift to jobs that they do better. These jobs that some economist says usually entail a level of education and training that is exceptionally difficult to obtain in the developing world. Thus, economists like Sachs say, developing countries get factories and jobs they would not otherwise have had. Developed countries will be better off because of the decreased cost of producing various goods will drive down prices at home. Also developed countries can specialize in the areas in which they do best.

When asked about the working condition in the sweatshops, proponents say that although wages and working conditions may appear inferior by standards of developed nations, they are actually improvements over what people in developing countries had before and that people should be grateful of what they get. Kristof (2004) said that if jobs in such factories did not improve workers’ standard of living, those workers would not have taken the jobs when they appeared. Kristof further argues that, unlike in the industrialized world, the sweatshop offer an improvement over subsistence farming and other back-breaking tasks, or even prostitution, trash picking, or starvation unemployment. This is the case since most under-developed countries have weak labor markets and little (if any) economic growth. They also often lack sufficient infrastructure, education and unemployment insurance.

The World Bank estimates that today, 1/5th of human beings live under the international poverty line. World poverty has become better due in a large part of economic success of China and India, the two countries with the largest number of workers in sweatshops. Against this progress in developing world, one should also note that economic inequality between the richest and poorest has never been so large (UNICEF, 1997). Most ethical defense of sweatshops labor in developing countries is predominantly utilitarian in orientation. Stelzer, (1999) argues that while conceding that there are undesirable aspects of sweatshop labor, advocates of this position would argue that it is necessary step in the development of the these countries. Stelzer said to prohibit sweatshop labor would impose hardship on the families who rely on the income of these employees and would be detrimental to the economy as a whole and the only ones who would stand to gain from this would be labor in developed countries. A popular view defender of the status quo is that although undesirable in certain respects, the use of sweatshops labor is necessary for economic progress to occur in developing countries. According to Myerson (1999) this view is consistent with the utilitarian defense of sweatshop labor noted above. Myerson argues that according to this view, efforts to curb the use of sweatshop labor will retard economic progress and will keep the citizens of these countries, children included, sentenced to poverty that much longer. Myerson stated that as the economies of these countries do develop, they would follow a path similar to that followed by the developed economies. That is, they will use less and less sweatshop labor as more families can afford to send their children to school. Indeed he contends that this is already happening in some countries.

Although supporters of Sachs view concede that certain sweatshops labor practices are undesirable they would argue that any other proposed cure is worse than the disease. They contend that any effort to cut the demand for child labor would not likely to make the children who will suddenly lose their jobs any better off. In fact they point to examples like Bangladesh where concern over the possible passage in 1994 of US legislation that would have banned the importation of goods made with child labor led to sudden layoffs of child workers in the apparel industry and their subsequent involvement in more hazardous work (Alam, 1999).

A labor code that requires Multinational corporations and their subcontractors to pay a living wage, provide safe and healthy working conditions, and allow workers to organize would be likely to have yet more profound effects on these developing economies. On this point, the anti-sweatshop activist and their critics agree. What they disagree about is whether these broader effects will be a help or hindrance to economic development and an improved standard of living in the developing world (Freeman 1992).

Krugman (19970 asks the question in almost pointed way: “Why does the image of an Indonesian sewing sneakers for 60 cents an hour evoke so much more feeling than the image of another Indonesian earning the equivalent of 30 cents an hour trying to feed his family on a tiny plot of land, or of a Filipino scavenging on a garbage heap?” most scratch out their livelihood from subsistence agriculture or by plying petty trades, while others on the edge of urban centers work in the informal sector as street-hawkers or the like (Todaro, 200). In addition, if sweat is the issue, journalist Kristof (1998) assures us that “this kind of work, hoeing the field or working in paddles, often involves more perspiration than factory work.”

Conclusion

It is clear that the issue of sweatshops labor is very complex one and that simple solutions are not available. Banning products made with any form of sweatshops labor would allow us to distance ourselves from the problem, but it is very likely would make the people we are concerned about worse off at least in the short run and perhaps also in the long run. Clearly though there can be no justification for the purchasing of products made with slave or bonded child labor and other industrialized countries that have not already done so should join the United states in an outright ban on these products.

References

Alam, S. (1999). Efforts to Ban Goods made by children are Counterproductive. In a Child labour and Sweatshops. Mary E. Williams (Editor). San Diego: Green Haven Press: 43-47.

Bellamy, C. (1997). “An Agreement in Bangladesh”. The state of the world’s Children 1997:66, United States Children’s Fund. ISBN 0-19-262871-2. Retrieved on 2007-05-31.

Freeman, R.B. (1992). “Labor Market Institutions and Policies: Help or Hindrance to Economic Development?” In proceedings of the World Bank Annual Conference on Development Economics, pp. 117-56. Washington, DC.

Krugman, P. (19994). “Does Third World Growth Hurt First World Prosperity?” Harvard Business Review (July-August): 113-121.

Kristof, N. (2004). “Fair Trade” Crushes the poor” (reprint), The New York Times, 2004-02-02. Retrieved on 2007-05-31.

Stelzer, I.M. 1999. Efforts to Reduce the use of sweatshops Are Misguide. In Child Labor and Sweatshops. Mary E. Williams (Editor). San Diego: Green Haven Press:58-62.

Todaro, M. (2000). Economic Development. 7th ed. New York: Addison Wesley.

Myerson, A.R. (1999). Sweatshops Often Benefit the economies of Developing Nations. In Child Labor and Sweatshops: Mary E. Williams (Editor). San Diego: Green Haven Press: 32-35.

Webs:

Irtcleveland, (2004) http://www.irtcleveland.org/2004-0917%20About%20Swaetshops.pdf.

Sachs, J. (1997), http://en.wikipedia.org/wiki/Historyofsweatshops

United Nations. (1997). UN Convention on the Rights of the Child: Appendix F. http://www.dol.gov/dol/liab/public/media/reports/iclp/swaet5/appendixf.htm