Economic benefits of sweatshop labour

Sweatshops are typically associated with inhumane treatment of the working poor, and people without choice of work and labour conditions. The general consensus of the global community is that sweatshops are unprincipled and unacceptable. An economic analysis of the economics of sweatshops identifies their benefit to the economies of developing nations. Globalization has caused an increase in sweatshop labour, which benefits the economies of developing nations and the standard of living of the sweatshop labourers despite some detrimental effects. Sweatshop labour is at times inhumane and violates the rights of its workers however it also acts as a stepping stone to economic development, and it improves the workers standard of living.

Many critics of sweatshop labour argue that sweatshops are inhumane to their workers and that the conditions and treatment of their employees are cruel and in violation of their individual human rights. Kevin Danher of the Hoover Institution claims that, “Sweatshops are not a sign of progress…Look at Mexico, where 15 years of trade ‘liberalization’ have not succeeded in closing the gap between rich and poor. ” He continues to argue that sweatshop labourers are forced to work for a below minimum wage that cannot properly support their families. However many argue that on an economic perspective there are more benefits to sweatshop labour then detriments.

“Some managers are brutal in the way they house workers in firetraps, expose children to dangerous chemicals, deny bathroom breaks, demand sexual favours, force people to work doubt shifts or dismiss anyone to tries to organize a union. .. But workers would be aghast at the idea of American consumer boycotting certain toy or clothing in protest. “

They argue that sweatshops help to increase the standard of living of their workers and that they enable to country’s economy to grow and prosper.

Sweatshop labour acts as a stepping stone for developing nations to experience economic development. Over time many nations have been able to experience significant economic growth following the implementation of sweatshops within their country. “Hong Kong, Singapore, South Korea and Taiwan… made apparel, toys, shoes…mostly for export. Within a generation their national incomes climbed from about 10 percent to 40 percent of American incomes. ” Through the use of sweatshop labour these countries were able to jumpstart their economy into the powerhouses that they are today. Just as the modernized nations of the United States, Britain and Canada experienced the stimulation of their economy after industrial revolution, many developing nations are affected similarly as a result of the development of sweatshops. World Bank Economist David L. Lindauer stated “We know of no case where a nation developed a modern manufacturing sector without first going through a ‘sweatshop’ phase.

” By implementing sweatshops the economies of developing nations have a stepping stone from which they are able to build. As most developing nations tend to not have much money or a high skill level among their workforce sweatshops are an ideal solution as they are built because of low capital and skill requirements. Any developing country is in dire need of capital to use to import good and service which they require. By allowing foreign investment in their country by way of sweatshops they are able to acquire the needed capital. This enables the country to provide more for its citizens and attempt to stabilize the prices of goods within the economy. Finally sweatshops aid in attracting more foreign investment which further fosters economic growth. The development of sweatshops within developing nations enables the countries to experience economic development.

Sweatshop labour helps to improve the standard of living for all of its workers. In developing nations there are few employment alternatives that enable you to provide for your family as working in a sweatshop.

“Adult labourers…are willing to accept sweatshop employment because the pay is higher and conditions are no worse than the general alternatives: subsistence farming, domestic services, casual manual labour, prostitution, or unemployment. “

Being employed in a sweatshop also offers you increases in pay and improved working conditions which helps the worker out of poverty and enables them to better help their family. David Henderson of the Hoover Institution said that, “a miserable job is much better than a much more miserable job…when you take away from people the best of their bad options, you don’t make them better off. ” An employee of a sweatshop is given the ability to get a higher pay and work in conditions far improved for other sectors of the economy. Linda Lim, a professor at the University of Michigan stated in her research that in general sweatshops pay above-average wages, especially when comparisons are made for females in the 18-24 age group. According to the World Bank the average minimum wage for 1995-1999 in Vietnam was $134.00 US. Lim found that workers in a Nike supplier factor earned $670.00 US annually . Furthermore, being able to work in a sweatshop enforces the workers rights, the rights of workers to make a living, their right to freely choose their job and they right to work for corporations. The United Nations released a report on developing nations, in which they stated that,

“Improvements in human development…can be sustained over a long time only if supported by economic growth. However, developing countries cannot improve their economics by themselves… [They] can’t industrialize without the help of developing countries. “

In order to industrialize a developing nation must rely on the developed nations for foreign investment which in the early stages comes as forms of sweatshop labour. Sweatshop labour helps to improve the standard of living for its workers through providing them improved alternatives in the workforce and ensuring they are able to maintain their right of choice.

While there is a moral dilemma as to the validity of sweatshop labour in developing nations there is little doubt as to their economic benefits. While many will argue that sweatshops labour is cruel, and unjust it is impossible to ignore that globalization benefits the economies of developing nations and the standard of living of the sweatshop labourers. By improving the life of a sweatshop worker and providing a developing country with the foundation for economic prosperity countries are able to take advantage of foreign investment and attain economic success.