Look for the Sweatshop Label

Sweatshops are good.  That’s the message of this article.  Embrace them.  Hope for more of them.  Given a choice, buy goods made in them:

Don't get into a lather over sweatshops, By Benjamin Powell and David Skarbek, Christian Science Monitor:  San Francisco Mayor Gavin Newsom is pushing the city council to adopt an ordinance that forbids the use of municipal funds to purchase uniforms and other clothing made in "sweatshops." … colleges often adopt similar standards for clothing displaying their school logos. North American unions ... 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, … alternatives to working in a sweatshop are often much worse: scavenging through trash, prostitution, crime, or even starvation.  Economists across the political spectrum, from Paul Krugman on the left, to Walter Williams on the right, have defended sweatshops. … People choose what they perceive to be in their best interest. ... If workers voluntarily choose to work in sweatshops … 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 … 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. … 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. … 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.  Until poor nations' economies develop, buying products made in sweatshops would do more to help third-world workers than San Francisco's ordinance. By purchasing more products made in sweatshops, we create more demand for them and increase the number of factories in these poor economies. That … raises productivity and wages, and eventually improves working conditions. …

Many economists support this position (see here for a discussion of the Worker's Rights Consortium and the Fair Labor Association).  But if you've lost a job to a sweatshop, perhaps one of the newer internet types that are displacing professional workers, I suspect the economic development of another country and free trade aren’t paramount in your evaluation of the consequences of increasing the number of sweatshops.

Comments

[calmo]

Most of us get to the level of labor arbitrage or 'race to the bottom' and not much further. It's something that happens to others, is a large part of our reluctance to take it even as far as Mark does here by looking at the defence of sweatshops as a better alternative to picking through the garbage for dinner.
Is it the consumer side weighing in so heavily against the producers? The imbalanced perspective of consumption supported by mountains of credit facilities --against the light or non-existent peek at production and workers who have increasingly smaller and more precarious shares in that production? Only occasionally do we see a picture of the worker in those ads and even then it bears no relation to reality. [The guy with the hand plane building that fine furniture comes to mind.]

Capitalism is about getting your piece of the action (rights to make others produce for your consumption) before it gets you. (Others forcing you to produce for them?) It looks like more are producing for fewer, creating the conditions that mainstream economists identify as 'weak demand'.

[Bruce Wilder]

The "alternatives are worse" argument is obnoxious. That argument excuses bad behavior while continuing to deny by other means the reality of the bad behavior. Reality is that common people may be oppressed and exploited ruthlessly by those, who, through a combination of opportunity, capital and political power, are able to destroy the traditional economy and build the capitalist economy.

I do not want my clothing made by slaves, and being told that the slave "freely chose" slavery does not change my mind. Moreover, I am not the one being naive here, about the realities of development. Blithe handwaving about safety and working conditions does not erase the very real suffering of someone maimed as a consequence of those working conditions, so that I can pay $10 for a shirt and his boss can accumulate a fortune. Let's get real people.

I am all for having rules, which allow development to proceed unimpeded. But, I am not willing to even have a debate with people, who are so callous, regarding human suffering.

[ken melvin]

In order of preference is it? I assume starving is at the bottom. Then scavaging? Then prostitutiion? Then slavery? Then starvation wages? Then slight improvement of condition? Then OK by human rights standards? ... and on up? Let's jump ahead to fair and adequate compensation with educational opportunity and, please, remove the bastard getting rich off labor and his house on the hill. Else, the consumer is implicated for wanting their cut from slave labor.

[Lord]

The in style is Prison Blues, www.prisonblues.com, these days. Keep those jobs in America. Hahaha.

[Mark Thoma]

I had a longer version that compared this to the discussion of the minimum wage but it was too long so I cut it at the last moment. Many believe that a minimum wage is the decent thing to do. But of course, the cost of higher wages may be lower employment (the costs/benefits of a minimum wage is far from settled) That is the same argument being made here - if you insist on a "decent" wage (and the definition of decent is far different depending upon which country is used as the baseline), the worry is that employment and growth will be lowered (the cost) in order to raise wages for those remaining employed (the benefit), and the claim in the article is the cost of minimum standard of living ordinances exceeds the benefit. One of my points is that the analysis of the consequences of such policies ought to include domestic employment as well. What comments are noting is that better than de-facto slavery and decent are different things, and just because something is slightly better than sifting through garbage does not mean it is something we should support. Those that favor these proposals would counter that the workers will never take the big step to a decent wage without first taking all the samller steps to get there.

[ken melvin]

Ah, the crux of the problem; as long as they can find cheaper labor elsewhere the argument holds for sweatshops.

[Mr. Econotarian]

Over-regulation of developing country labor can lead to expansion of the informal sector which can actually increase poverty.

The best example of this is child labor, which can be eradicated best through economic growth, rather than premature attempts to make it illegal (which leads to children illegally working in the informal sector, possibly under worse conditions than when they were working legally).

[donna]

I believe the answer comes in valuing diversity rather than just wanting to buy the same old pieces of crap. If I can find socks that are interesting and make me feel better to wear, possibly even hand-made by someone who put some time and effort into them, then perhaps that is worth more to me than a cheap pair of socks made by workers in China in a town of 20,000 that do nothing except make socks for low wages. As long as we believe that buying more crappy things cheaply is more important than the rights of other people to have an interesting and diverse life, this problem will continue to exist. Justifying it by comparing the low wages to scavenging for food is truly misleading.

Developing countries need to put their efforts into education and teaching their people to create something of value. Even someone with nothing may find a living as a singer, a poet, a musician, a writer, a crafter. We need to work on bringing developing countries up to a sustainable level of living, not working in a sweatshop 20 hours a day. This gives them no time for bettering themselves and their country, to educate and be with their children, to have a productive and worthwhile life.

Provide aid for food and shelter to developing nations while we work with them to educate their children and develop the unique resources they have available to them. Those things may come from culture, from natural resources, or just the individual talents of each person. And we need our own culture to start valuing diversity so we don't all live in the same cracker-boxhouses eating all the same food and buying the same cheap crap from Walmart and wearing the same thing. The monoculture of Americans society is not only boring, but economically devastating to developing nations.

[Mark Thoma]

Thanks for the comments so far - when I posted this, I wasn't sure how people would react ...

My own view is that I do not want to support exploited labor. Something about purchasing goods that I know were produced under sweatshop conditions doesn't feel right to me. But most of the economic analysis I know of says just the opposite, that attempts to artificially improve conditions are counterproductive, and some of this is from people I have a lot of respect for. However, development is not my main area and I would like to hear about research saying the opposite if anyone knows of any. That would be helpful (thanks for the links Mr. Econotarian, those are appreciated just as much).

says...

Mr. Econotarian:
"The best example of this is child labor, which can be eradicated best through economic growth, rather than premature attempts to make it illegal"

This is a chicken and egg argument.

How are you going to grow you economy if your future citizens are kept illiterate and unhealthy because of time working in these sweatshops?

[ken melvin]

Does Grameen fund sweatshops?

[Dash]

All nice ideas, and its productive to bend your mind around all opinions.
I feel that sweatshops are just symptoms of me out sourcing my responsibility to cloth myself. As is the case when any responsibility is out sourced.
Thus the key is in responsibility and simplicity.
Taking these things back into your own hands brings awareness to your own consumption. whilst allowing vast amounts of expression. Could it be a comfort zone to be unexpressive in these simple ways?