Into the Intro: Out of Poverty
Written by: Benjamin Powell
Go Into the Intro of 'Out of Poverty: Sweatshops in the Global Economy'
Benjamin Powell, author of Out of Poverty, explains why sweatshops play an indispensable role in a country's economic development.
Abigail Martinez earned only 55 cents per hour stitching clothing in an El Salvadoran garment factory. She worked as long as eighteen hours a day in an unventilated room; the company provided undrinkable water. If she upset her bosses they would deny her bathroom breaks or demand that she do cleaning work outside under the hot sun. Abigail’s job sounds horrible. However, many economists defend the existence of sweatshop jobs such as hers.
“In Praise of Cheap Labor: Bad Jobs at Bad Wages Are Better Than No Jobs at All.” Only a right-wing free-market apologist for global capitalism could ever write an article with such an appalling title, right? Wrong. Those are the words of a darling of the left, New York Times columnist and Nobel Prize winning economist Paul Krugman. Krugman argues that critics have not found a viable alternative to these Third World sweatshops and that the sweatshops are superior to the rural poverty the citizens of these countries would otherwise endure. Krugman is not alone. After Haiti’s devastating earthquake, Paul Collier, author of The Bottom Billion, prepared a report for the United Nations outlining a reconstruction plan for the country. The development of a Haitian garment industry was central in his plan. He argued that Haiti had good access to key markets and that “due to its poverty and relatively unregulated labour market, Haiti has labour costs that are fully competitive with China.” Collier essentially outlined a sweatshop model of economic development for Haiti.
Wages and working conditions in Third World sweatshops are appalling compared to the wages and conditions that I and most readers of this book are likely used to. Any decent human being who has witnessed poor workers toiling in a sweatshop should hope for something better for those workers. So why have people such as Krugman, Collier, and many other economists from across the ideological spectrum defended sweatshop employment? These economists have defended sweatshops because they are the best achievable alternative available to the workers who choose to work in them, and the spread of sweatshop employment is part of the process of development that can eventually lead to higher wages and improved working conditions.
Unfortunately, that moral outrage can lead wealthy consumers and their governments to take actions that, although they may assuage their feelings of guilt, make Third World workers worse off by taking away their ability to work in a sweatshop and throwing them into an even worse alternative such as scavenging in a trash dump.
How bad are the alternatives to sweatshops? In Cambodia, hundreds of people scavenge for plastic bags, metal cans, and bits of food in trash dumps. Nicholas Kristof reported in the New York Times that “Nhep Chanda averages 75 cents a day for her efforts. For her, the idea of being exploited in a garment factory – working only six days a week, inside, instead of seven days in the broiling sun, for up to $2 a day – is a dream.” Other common alternatives are subsistence agriculture, other informal sector work, begging, or even prostitution.
Recent international trade did not invent poverty. The history of humanity is one of poverty. In most places in the world, for most of human history, people had low incomes, worked long hours, and had short life expectancies. Poverty has been the norm and unfortunately still is the norm for much of the world’s population. Although First World citizens often express a desire for an end to poverty, normal Third World rural poverty does not raise the sense of moral outrage that sweatshops do. People become more outraged about sweatshops because the poor workers are toiling for our benefit. Unfortunately, that moral outrage can lead wealthy consumers and their governments to take actions that, although they may assuage their feelings of guilt, make Third World workers worse off by taking away their ability to work in a sweatshop and throwing them into an even worse alternative such as scavenging in a trash dump.
This book provides a comprehensive defense of sweatshops. I do not deny that sweatshops have wages far below the levels in the developed world. Nor do I deny that sweatshops often have long and unpredictable working hours, a high risk of injuries on the job, and generally unhealthy working conditions. Sweatshops also sometimes deny lunch or bathroom breaks, verbally abuse workers, require overtime, and break local labor laws. Despite these atrocious conditions, sweatshops are still in the best interest of the workers who choose to work in them.
Read the full excerpt here.