What is a sweatshop? The word reminds us of low pay, poor working conditions and long hours, but in most cases these perceptions are inaccurate Western stereotypes. Sweatshops pay higher wages and offer better working conditions than local companies do. Long hours? Workers are hungry for work to help lift themselves out of poverty. And, long, hard work is what practically all immigrants arriving in Canada go through as well-a shorter work week is a luxurious option available only to the wealthier members of society.
In a recent article, Steven Borowiec worries that the mainstream media is overlooking “the army of underpaid laborers” in China (Re: China’s white elephant, Nov. 17). On what basis or standards are the workers “underpaid”? The workers are not coerced to work, and presumably no worker would choose underpaid work. Rather, jobs at these sweatshops are much more appealing than other jobs on the market. If sweatshop work is so undesirable why do shops have endless queues of job applicants?
According to the Institute for International Economics (IIE), the average Chinese annual manufacturing wages in 2002 were $817 USD in collectively owned enterprises; $1,316 USD in state-owned enterprises; and $1,696 USD in foreign-funded enterprises. Besides offering higher wages, foreign enterprises have “better occupational safety, better health standards, and observe higher environmental standards than Chinese-owned firms,” writes an IIE study. Therefore, the sweatshops run by multinational firms set a higher working standard.
Anti-sweatshop groups suggest pressuring large corporations to improve the working conditions of the workers. But these efforts often lead to closures as the shops become less financially viable, depriving poor countries of one of their only assets that appeal to foreign investors.
In 1995, Nike and Reebok came under intense anti-sweatshop heat about their soccer stitching plants in Pakistan. Both firms relocated their plants, leaving fifty thousand workers jobless and affecting numerous others whose businesses are related to the factories. University of Colorado economist Keith Maskus pointed out that mean income in Pakistan fell by twenty per cent after the closures, and most of the unemployed turned to petty crime, begging, or prostitution, since anything is better then dying of hunger. So, under the guise of good intentions, groups pushing for improvement are actually harming sweatshop workers.
There exists a broad misconception that wealthy multinational firms should be more charitable towards their workers, since they can easily afford to improve working conditions and pay higher wages-despite the fact that they already offer better conditions when compared to local companies. To this I would reply that firms are responsible for making a profit for their own investors, and one of the ways to do this is offering cheaper goods than their competitors. Most consumers prefer cheaper goods and those firms that fail to provide them lose business. In having sweatshops and producing cheap goods, companies are simply meeting customer demand.
If you truly believe in working conditions and wages that are more in line with Western standards, why don’t you open a firm that strictly sells goods made outside sweatshops? Impossible? There are farmers who only produce organic foods, and coffee shops that only sell fair trade product. If enough people believe in your cause, your business will fly. There is no need to pressure companies to change their production habits as long their workers and customers are content.
The best way we can help the workers in sweatshops is by buying more and more sweatshop goods to help lift up the millions who live in poverty, as is happening in China and has happened in Japan and Korea. Jeffrey Sachs, a Columbia University economist who heads the UN Millennium Project, has remarked, “My concern is not that there are too many sweatshops, but that there are too few.” Well said.
