Stop blaming sweatshops for poverty

On John Oliver’s latest installment of his HBO weekly “Last Week Tonight,” he takes aim for 17 boisterous minutes at sweatshop labor in developing countries. It’s an easy target: footage of 14-year olds hunched over sewing machines in cramped, dirty factories to stitch together our clothes is heart-wrenching. So are the stories of these often shoddily built factories collapsing or burning with hundreds of workers inside. Lampooning Kathy Lee Gifford, whose clothing line was “caught” using workers in Honduras who make little over $3.10 an hour, Oliver also condemns the low wages that to us look shockingly low.

His message is that sweatshops in miserably poor countries are bad and should not be tolerated. He is wrong. This picture is simplistic and, from an economic perspective, flawed. Factories in the developing world that use cheap labor are symptoms, rather than causes, of poverty and in fact offer a road to development, however grim the picture may look from our leather couches and TV screens. The problem, one that Oliver exploited, is that we look at sweatshop workers from the perspective of Americans that have 1,000 better options than a garment factory, not Hondurans who only have dozens of worse options.

Workers in most sweatshops are choosing (absent coercion, which I will address shortly) to work there because compared to the alternatives, it’s a pretty good deal. To the Cambodians who subsist by scouring flaming, toxic trash heaps for recyclables to sell for pennies, factories would be a huge step up. The people who scorned Kathy Lee Gifford’s clothing line for paying Hondurans workers $3.10 forgot to mention that a quarter of that country’s people earn less than $1 an hour and half earn less than $2. For the people that labored over her wares, the job was a route out of poverty, not a cause. Wages are relative.

Problems arise if people aren’t actually choosing to work in these factories but are instead coerced. But this is a red herring, as is the point about (most) tragic factory collapses, because these actions are illegal. Rana Plaza, a factory in Bangladesh that collapsed in 2013, killing 1,129, was built in violation of safety codes—it collapsed because that country has terrible rule of law and didn’t enforce its regulations. The same is true of violent foremen: they are just getting away with criminal activity. These abuses are unrelated to cheap labor; they are symptoms of weak states.

So, how do you strengthen these states? By empowering its people, in part with, well, sweatshops. The link between cheap labor and development is theoretically and empirically strong. Underdeveloped countries can’t possibly compete with us without giving themselves some sort of advantage, and they can get one by paying people in their poor country the kind of wages you can pay people in poor countries ($3 in Honduras is a lot more than $3 in the US). This attracts investment and puts money in people’s pockets. Asia is full of countries where this strategy figured in greatly to economic development.

The poster child, of course, is China: in 15 years, manufacturing wages there have risen from $1,000 a year to $6,500. Economic growth empowers a nation’s people, allowing them to demand more protections from a government whose resources have also increased. It’s a slow process, and there is still a human toll. But it gets better over time, and it’s always better than garbage farming.

Critics of this perspective say people shouldn’t have to make this choice. I agree. But they do have to, and eliminating the better but nonetheless poor alternative doesn’t solve the problem. As Will Wilkinson writes: “I am constantly dumbstruck that so many who profess to care about ‘social justice’ do little more than complain that desperate people have really terrible options and then work to take away the best options.”

Many also take issue at the high margins these products are sold at compared to the low wages they are made with. But it doesn’t make sense to pay a worker in Honduras as much as you’d pay someone in a wealthier nation: you might as well move to the wealthier nation, which will have better machines, a more educated and healthy workforce, and more stable rule of law. If you forced companies to only use suppliers who paid a certain minimum wage, hundreds of thousands of desperately poor people would lose their jobs.

Other so-called solutions are equally lousy. Boycotts merely reduce demand and shut down factories. In 1993, the threat of such action led a Bangladeshi factory to lay off 50,000 workers. According to British charity Oxfam, many of them just became prostitutes.

The footage is hard to stomach. But if you compared it to that of the garbage scavengers in Phnom Penh, Cambodia, you’d be less quick to go picket H&M. There are millions of people in the world who dream of working in these factories and would not appreciate losing the option because of our misplaced guilt.

James Queen

James Queen

James Queen

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