In today’s issue of The Christian Science Monitor, comes an op-ed piece discussing last year’s research study -Sweatshops and Third World Living Standards- regarding living standards among those employed by “sweatshops” in off-shore production facilities.
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.
The new news of the study is that the paper, Sweatshops and Third World Living Standards by Benjamin Powell and David Skarbek has been slated for publication in the Spring 2006 issue of the Journal of Labor Research. The authors state:
Our findings should not be interpreted to mean that sweatshop jobs in the third world are ideal by US standards. The point is, they are located in developing countries where these jobs are providing a higher wage than other work.
I’m assuming you’re not a subscriber to the Journal of Labor Research and you don’t have to wait till spring to read the report; you can read the paper here. Similarly, this is not the only research over the past several years to assert the counter-intuitive benefits of overseas facilities. Thanks to Eric for the tip.
For another perspective on the topic of sweatshops, see Defending Sweatshops: Too Much Logic, Too Little Evidence by Richard Rothstein who says in part:
“… the absolutism of the free-marketers is that their logic applies equally to domestic social welfare legislation that they fail to oppose with equal vigor. There are, of course, conservatives and business leaders who claim that our own minimum wage, social insurance, and health and safety laws hurt the very workers these laws intend to benefit. Whenever a domestic minimum wage increase is proposed, they insist that the result will be low-wage workers’ unemployment, not increased compensation…”
“Not quite a century ago, this indeed was the argument made by business leaders and economists against regulation of our own sweatshops. They asserted that sweatshops were good for children because the alternatives were worse. For example, they often cited Charles Wardell Stiles, a medical crusader for the treatment of intestinal parasites among rural children, who argued that employment in factories was beneficial because children could more easily be treated in factory towns than home on “soil polluted farms.” In a tone similar to that of sweatshop supporters today, novelist Julia Magruder denounced “ignorant sentimentalists” who saw misery only in sweatshops and not in the worse conditions of unemployed children. Manufacturers testified that child labor was a necessary first step in industrialization because adult hands were too “knitted and gnarled” for factory work; Only children were nimble enough, and if they were not permitted to work, their families would go hungry and fail to settle in cities where, at least, future generations might prosper. If twelve-year-old children of destitute widows were deprived of work, a typical manufacturer challenged a congressional committee, what are these families going to do?”
and lastly, regarding the activism of the noted retailer Edward Filene:
“The most vocal crusader for minimum wage regulation in those days was Edward Filene, a wealthy retailer who was nonetheless active on behalf of the National Consumers’ League that led minimum wage agitation. Modest increases, Filene concluded, forced employers to better train low-wage workers, so that higher productivity would justify higher wages. In the absence of minimums, too many firms were lazy and uninformed-not required to pay higher wages, they got by without the training or organizational improvements that generate productivity advances.”
The latter of course goes directly to the core of this industry’s abysmal and lamentably poor history regarding investment in plants and people.