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  • "The curious task of economics is to demonstrate to men how little they know about what they imagine they can design."

    - F.A. Hayek

The Benefits of Sweatshops

Posted by The_Chef On 11:10 PM 1 comments

Here is a great article from Ben Powell. He was a student at GMU with my mentor Dr. Chris Coyne. Powell presented a defense of sweatshops at Hampden-Sydney College and I was fortunate enough to be invited to dinner and the pub later to talk to him and he's a really cool guy. He's passionate about his work and ruthlessly meticulous about his research. He defended his point very well during the Q&A period. And allowed one certain female economics professor to make an ass out of herself. All in all, it was a great speech.

Here is one of my favorite segments from the paper linked above:

Even in specific cases where a company was allegedly exploiting sweatshop labor we found the jobs were usually better than average. In 9 of the 11 countries we surveyed, the average reported sweatshop wage, based on a 70-hour work week, equaled or exceeded average incomes. 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. The Kathy Lee Gifford factory in Honduras was not an outlier—it was the norm.

Because sweatshops are better than the available alternatives, any reforms aimed at improving the lives of workers in sweatshops must not jeopardize the jobs that they already have.
Eat your heart out Berkeley students. You can wear your "fair trade" clothes all you want, just know that children are prostituting their bodies because your movement caused their factory job to be eliminated.

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1 Response for the "The Benefits of Sweatshops"

  1. Kelsey says:

    If only it were that simple. Granted it's not as simple as your Berkeley Fair Traders would have it either.

    I agree that in most of these countries there are much worse ways of trying to make a living, but I’m not so sure about his numbers. Not that I know what the numbers should be, but that’s my point, no one can. He even admits to his assumption:

    "Data on actual hours worked were not available. Therefore, we provided earnings estimates based on various numbers of hours worked. Since one characteristic of sweatshops is long working hours, we believe the estimates based on 70 hours pr week are the most accurate."

    Maybe he further hashed out their methods in his talk???

    Last year I spent three months hanging with workers to research my upcoming book "Where am I wearing?" I met workers that worked much longer than 70 hours per week, but didn’t get paid for more than 50. Numbers, like Chinese labor laws, are often pointless. Unless you do extensive worker interviews and studies, I don’t think there is anyway to obtain accurate estimation of wages paid or hours worked in most garment sectors. Again, maybe he has done the extensive on the ground research required and I just don't know it.

    These jobs are important to the garment workers and the future of their children. They sacrifice much to have them. But they could be treated better. Unfortunately money moves faster than moral rights in the global marketplace.