Sweatshops: a Curse or a Boon?

by Viva Avasthi

Sweatshops have been branded as places where the poor in developing countries are forced to work under horrible conditions for massive multinational companies such as Nike, for example. But is this really the case? Are there benefits to so-called 'sweat shops'?

Contents of Investigation:

1. Introduction
2. The problems with sweatshops
3. An alternative approach to the issues surrounding sweatshops
4. Conclusion

What are the issues involved with sweatshops?

1.  Introduction

By definition sweatshops are factories (generally in the clothing industry) where work is done in poor conditions for long hours and workers are paid a very minimal amount regardless of laws concerning child labour,  health and safety, minimum wage and maximum working hours. They are seen in a negative light, especially by those from developed countries with high standards of living. Sweatshops are found in developing countries such as India, China, Vietnam, Bangladesh and Honduras which are newly industrialised (NICs), have low production costs and provide cheap labour. These countries encourage outsourcing of work from the developed world to factories within their borders because this provides opportunities for employment to their people and new sources of income for the nation as a whole.
(General idea from: http://en.wikipedia.org/wiki/Sweatshop)

Globalisation, which is a process driven by technological change and the increase of global communication, has lead to greater interdependence between countries and because goods, services, capital, labour, knowledge and information are now able to move increasingly quickly around the world, sweatshops can be seen as a result of globalisation. Labour is far cheaper and the laws concerning labour are poorly enforced in the East, and these qualities attracted businesses to the idea of manufacturing there; globalisation made the shift of production to developing countries easier. Free trade and the flight of capital and labour (the idea that capital is attracted to where labour is in surplus and labour is attracted to where capital is in surplus) also significantly aided the development and sustenance of sweatshops.

2.  The problems with sweatshops

Issue Details How stakeholders are affected Awful working conditions Sweatshops do not follow Western health and safety standards. The workers’ labour rights are ignored. Workers in the sweatshops regularly faint from heat and exhaustion. Many sweatshops do not allow them sufficient breaks and this worsens the effect of the heat and fatigue on their bodies. This could lead to mistakes in stitching which would mean reduced pay or forced overtime. The factory owners would both benefit and lose from poor conditions for their workers. They would benefit from having poor conditions because it is cheaper to leave a factory unconditioned and more money is made if workers work for longer. However, they would lose from the conditions because the situation of the workers would make them more likely to make mistakes and then have to waste time correcting mistakes. The owner would also lose because there would be intense competition between factories to produce the largest quantity of best quality products, and to be able to do so, they would need workers. If a factory owner mistreated his worker too much, the worker would go and work for another factory if he could. In this way, the factory owner could potentially lose workers. Overall there is not much of a benefit for the owner to awful working conditions. The human rights activist would be strongly against the awful working conditions just as he/she would be against all of the issues in this table. Punishment Examples of reasons for punishment include sewing crookedly and not working fast enough.  In the House of Pearl factory, which produces clothing for Gap and Next, workers who objected to working overtime were beaten. Punishment would encourage workers through fear to sew to the best of their abilities but it would contribute in making their job very difficult and tiresome leading to workers wanting to quit their jobs and search for another if possible which would put the factory owners at risk of losing workers. Forced overtime Workers are forced to work overtime – sometimes even over the legal limit. If they do not agree to work overtime, they can are punished or forced to leave their job. Forced overtime means that the workers are not able to get enough sleep and have to live simply to work. It makes them more likely to make mistakes due to fatigue which could lead to even more overtime work. Factory owners would find that time is extremely valuable and forced overtime would mean that a day would be more productive as more things would be made due to the extra hours. However, if the forced overtime means that the workers will just make mistakes and have to spend time correcting those mistakes, less fatigued workers would be more valuable to factory owners than more hours of overtime. Extremely low wages Sweatshop workers are paid very low wages which can often be under the minimum wage and can mean that they don’t really have enough to live on. The workers barely get enough to live on because the amount they are paid is only enough to pay for the rent and food. They have to live in rooms shared with around 4-5 others and the rooms tend to be bare, only furnished with simple beds. They are not able to send money home to their family and have to work overtime in order to earn a little extra. However, this is not much different to how they would have lived in their village, and if the factory is air-conditioned or in a shady area, it is a relief from the heat. If the wages are too low, if the workers have the opportunity to take up a different job, they can protest and demand a higher wage and if they don’t get it they can change factory. The factory owners and brand owners benefit from giving low wages to their workers because it means that more of the money can go to the profit. However, paying low wages could mean that workers would look to work in alternative factories where the pay might be a little higher. The President/Prime Minister of a country where the workers are paid under the minimum wage would probably not be happy that his citizens are not able to lead fulfilling lives, but would have to sit and wait for the stage where the country became developed enough for the workers to demand extra pay. Child labour Children sometimes work in sweatshops in order to provide for their families. This means that children also endure the hazards and mistreatment that adult workers suffer. Instead of going to school, children would work in the same conditions as their adult counterparts. However, working in a factory would be better than becoming a scavenger. For factory owners, having children to do work could be beneficial because children can be paid less but it might also be harmful because they could have high chances of making mistakes and could take a long time to train. Sexual abuse Some females suffer sexual abuse in the sweatshops they work in which makes their job even more uncomfortable than it already is. Sexual abuse would only affect the worker and the human rights activist as well as the brand owner (but only if the brand was found to be sexually abusing its workers). 3.  An alternative approach to the issues surrounding sweatshops

Although we are surrounded by negative connotations of sweatshops, it is important to refrain from simply approaching the issues regarding sweatshops from a one-dimensional perspective because the issues themselves are far from one-dimensional.          

The conditions of the factories in the developing world are measured through the parameters of the developed world, which are actually not relevant in the context.  For example, an article titled: Gap, Next and M&S in new sweatshop scandal written by Gethin Chamberlain and published by The Guardian on Sunday 8 August 2010, began with the words: “Indian workers are paid just 25p [the article later on says that is the lowest] an hour and forced to work overtime in factories...” From a layperson’s perspective, 25p seems to be a very small amount of money, but because the cost of living in India is fairly cheap, 25p per hour is a fair salary:

Chart showing lowest possible salary (in accordance with the rate given by The Guardian) of sweatshop workers in India Per Hour £0.25 / 18 Rs. Per Day (10 hours shift) £2.50 / 180 Rs. Per Month (30 days) £75.00 / 5400 Rs. Per Year £900 / 64800 Rs. Minimum Wage for Unskilled Labours (per month) £58.00 / 4200 Rs. * A semi-skilled worker is expected to earn at least 7000 Rs. per month and skilled workers start from 15000 Rs. per month. The wages have increased by 70% in the last two years and it is difficult to find people willing to work on minimum wages. In most export oriented factories, workers are paid for every piece they make so they tend to work overtime in order to increase their income. *The above information has been provided by:  Handloom manufacturers association, Panipat , India Jodhpur Handicraft Exporters Association, Jodhpur, India. Karur Textiles Manufacturers and Exporters Association, Karur, Tamilnadu, India.

Chart comparing prices of everyday necessities in India and UK (The prices given are estimates and of products of average quality. I have personally collected the data.) Item Cost in India Cost in UK Bread £0.21 / 15 Rs. £1.00 / 72.5 Rs. Milk (per litre) £0.34 / 25 Rs. £0.75 / 54 Rs. Sugar(per kg) £0.44 / 32 Rs. £1.00 / 72.5 Rs. Tea (per kg) £2.21 / 160 Rs. £6.00 / 434 Rs. Flour (per kg) £0.28 / 20 Rs. £1.00 / 72.5 Rs. Pulses (per kg) £0.62 / 45 Rs. £2.00 / 145 Rs. T shirt   £1.38 / 100 Rs. £3.50 / 253 Rs. Underwear (per piece) £1.00  / 72.5 Rs. £3.45 / 250 Rs. Jeans £5.52 / 400 Rs. £10.00 /  724 Rs. Sari (Dress) £2.07 / 150 Rs. £10.00 / 724 Rs. Pyjamas £1.10/ 80 Rs. £5.00 / 362 Rs. Bedding £3.45 / 250 Rs. £15.00 / 1,086 Rs. Schooling Nominal fee (for state schools) Free Total Cost £21.07 / 1527 Rs. £56.25 / 4072 Rs. http://www.xe.com/ucc/

The cost of living is not the only difference between the societies of the East and West; there are immense cultural differences including variations in the social context, way of living and the methods of dealing with other people which are reflected in the workplace. For example, certain parts of the East function as patriarchal societies – this would not be tolerated in most of the West and would be seen as sexist. People in the East have been used to being shouted at and punished since their schooldays and sweatshops are just a continuation of that culture; nevertheless, sweatshops are far better than the alternative of prostitution or scavenging for rubbish. UNICEF's 1997 State of the World's Children study found these alternative jobs "more hazardous and exploitative than garment production."

 The media in developed countries tends to exaggerate the issues involved in sweatshops and highlights problems without weighing up the potential benefits of sweatshops and the differences in cost and standards of living, sometimes to lobby against a particular brand and to favour its competitor by playing on the conscience of the consumer.

4.  Conclusion

The research that has been presented shows that although there are issues, perhaps sweatshops are not the immense problem that we see them as. It is important to try and evaluate both sides of the argument before coming to a conclusion. But while saying sweatshops are extremely bad isn’t accurate, saying they are completely good and useful isn’t correct either. The evidence I have collected shows that a lot of the things that the media claims to be true about sweatshops isn’t always what it seems on the surface. For example, the amount the workers in India are paid is shown as being completely unreasonable when in fact it is a good price for their country’s cost of living. Therefore, the biggest issue that seems to have arisen is the overuse and misuse of the term “sweatshops”. The use of the word entirely depends on where you are from and what you personally believe. Although sweatshops aren’t the ideal places to work in terms of human rights, they are vital for the growth of a developing country and as workers in India and China demand higher pay and better rights, the temporary role of the sweatshop in the two giants will have come to an end and will move on to the next developing countries.

Bibliography:

http://www.guardian.co.uk/world/2010/aug/08/gap-next-marks-spencer-sweatshops
http://www.econlib.org/library/Columns/y2008/Powellsweatshops.html
http://news.bbc.co.uk/1/hi/programmes/from_our_own_correspondent/2139401.stm
http://www.xe.com/ucc/
http://en.wikipedia.org/wiki/Sweatshop
http://oneminute.rationalmind.net/sweatshops/comment-page-1/#comments
http://mises.org/daily/2384
http://en.wikipedia.org/wiki/Free_trade#Features_of_free_trade

Any opinions?
Comment below and share your thoughts!