“The governments in these sweatshop-using countries discourage business creation and investment by taxing away profits, regulating opportunities out of existence, tampering with their currencies, limiting the ability to trade with foreigners, and failing to protect property rights. The violation of these economic freedoms is one reason why these countries are poor and workers find sweatshops are the best options.” – Out of Poverty
Poverty is the default position in history. All civilizations began this way, improving their conditions only through an increase in productivity and technology. The Industrial Revolution began in the UK in the late eighteenth century, and eventually made its way to the US decades later. Since then, the growth of capital and technology has circled the globe pulling people out of poverty one country at a time. Today, less than 10 percent of people live in a third-world country, largely due to economic development that resulted in increased independence for people worldwide.
It was British novelist, Charles Kingsley, who in his 1850 book, “Cheap Clothes and Nasty” is credited with coining the term “sweatshops” when he described a sweating system that resulted from the contract structure in trade, where sweaty places made ready-made clothes for the markets. In modern parlance, sweatshops refer to exploitative industries with low wages, long hours, and poor, if not dangerous, working conditions.
In Benjamin Powell’s 2014 book, “Out of Poverty”, economist Powell defends the practice of sweatshops as the best alternative for workers in poor countries, revealing that wages can be two, three, and even four times the national average. Yet, despite these realities, first-world activists continually view third-world jobs as if they exist in rich countries, demanding policies detrimental to workers. By revisiting the history of economic development, Powell traces the increasing standard of living that grew from one country to another, often at an increased pace, as the technology created in one country was duplicated in another.
For poor countries, sweatshops are a necessary part of the development process. The sole solution for the improvement of sweatshops is economic expansion through the growth of capital accumulation, technology, and human development, through increased skills, and competition in the marketplace.
A country looking to escape poverty is a country that values freedom as reflected in its economic policies since economic freedom correlates to higher wages and better working conditions. As such, free enterprise and free trade drive economic growth and development. Countries with the worst sweatshop conditions, China, Bangladesh, India, and Cambodia, rank among the worst based on the Index of Economic Freedom, a report by the Heritage Foundation that ranks countries on the rule of law, the size and scope of government, regulatory efficiencies, and market openness. To increase economic activity in a country, the country must have a system of law and order, protection of private property, and a culture of responsibility and accountability. Too often, poor nations lack the political and economic conditions necessary to be successful.
Wages are set by worker productivity along with the principles of supply and demand. Wages cannot rise without an increase in output. As Powell noted, the lowest wages a worker will accept are determined by other alternative jobs available to them, while their highest wages are determined by their skills and level of productivity. In reality, a business determines the gross dollar amount they have available for a new position. This sum is reduced by government mandates and other benefits available to the worker, resulting in gross wages. For third-world laborers, surveys repeatedly show that most workers prefer wages to other benefits including vacations, shorter workdays, and even safety.
For workers in poor countries, sweatshops are preferable to the most likely alternative, a return to a worker’s rural origins, which are largely agricultural. Other options are worse, including menial labor, scavenging, and even prostitution. While activists strongly oppose child labor, it is not unusual for children ages 12-14 to be working, with most children employed in agriculture, restaurant work, and other service industries. The only realistic way to eradicate child labor is with an increase in the family’s income. Otherwise, children must work to help with household expenses. As it was in first-world nations, families must accumulate enough wealth before they can return their children to school full-time.
Instead of focusing on what is best for the worker, sweatshop protesters ignore many realities. Since activists are largely anti-capitalists, their proposed policies do more harm than good. Calling for boycotts, minimum wage, and even improvements in working conditions often removes a worker’s best employment option. Unfortunately, too many activists have a savior complex, believing they know what is best for people they don’t even know.
Sweatshops aren’t the cause of poverty; they are the answer to it. Activists may claim altruistic intent, but it is the sweatshops themselves that often provide the best solution to poverty.
Commentaires