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Slave labor?

Don't get into a lather over sweatshops
By Benjamin Powell and David Skarbek
August 02, 2005

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We use "sweatshop" to mean those foreign factories with low pay and poor health and safety standards where employees choose to work, not those where employees are coerced into working by the threat of violence. And we admit that by Western standards, sweatshops have abhorrently low wages and poor working conditions. However, economists point out that alternatives to working in a sweatshop are often much worse: scavenging through trash, prostitution, crime, or even starvation.
Economists across the political spectrum, from Paul Krugman on the left, to Walter Williams on the right, have defended sweatshops. Their reasoning is straightforward: People choose what they perceive to be in their best interest. If workers voluntarily choose to work in sweatshops, without physical coercion, it must be because sweatshops are their best option. Our recent research - the first economic study to compare systematically sweatshop wages with average local wages - demonstrated this to be true.
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Our findings should not be interpreted to mean that sweatshop jobs in the third world are ideal by US standards. The point is, they are located in developing countries where these jobs are providing a higher wage than other work.
Antisweatshop activists - who argue that consumers should abstain from buying products made in sweatshops - harm workers by trying to stop the trade that funds some of the better jobs in their economies.
Until poor nations' economies develop, buying products made in sweatshops would do more to help third-world workers than San Francisco's ordinance. By purchasing more products made in sweatshops, we create more demand for them and increase the number of factories in these poor economies. That gives the workers more employers to choose from, raises productivity and wages, and eventually improves working conditions. This is the same process of economic development the US went through, and it is ultimately the way third-world workers will raise their standard of living and quality of life.