Eliminate Poverty, Support Sweatshops

In reference to the company Nike, a Daily Mail article reads, “They're one of the world's top sports clothing brands, but for years Nike have been dogged by allegations of sweatshops and child labour.” The Nobel Prize winning economist Milton Freidman once said, “The world runs on individuals pursuing their self interests.” Nike uses third world labor because it is cheaper than paying citizens of developed countries to produce Nike products. Nike’s motive is one hundred percent self-centered, but this does not mean Nike’s actions are harmful. In fact, Nike’s use of sweatshops and child labor benefits third world workers, reduces poverty, and hastens the development of the countries in which the sweatshops operate. In comparison with Western standards, third-world sweatshops may appear cruel and unfair, but eliminating them removes a viable pathway out of poverty for poor workers, which often results in these workers taking jobs in worse conditions for less pay.

Sweatshops are factories in undeveloped countries in which the hours are long, the pay is low, and heath and safety standards are sub-par. Sweatshops often employ children, which prevents the children from attending school and receiving a quality education. Citizens of developed Western countries may be shocked by the working conditions in these third world factories. This disapproval causes many to boycott companies that use sweatshop labor or to push through legislation requiring sweatshops to increase wages. However pure the protesters’ intentions, their actions are misguided.

When a worker enters a contract of employment with a sweatshop owner, the contract is mutually beneficial. The factory benefits from the cheap labor, and the worker, who probably does not have many options to pick from, benefits from earning money – even if it is not much money. A worker chooses to work at a sweatshop because he or she decided the factory job was better than any of the alternative jobs available. Unfortunately, when sweatshops are shut down for violating minimum wage laws or safety regulations, the sweatshop employees must take work at one of the other options that they determined to not be as beneficial as employment in a sweatshop. This hurts the factory owner by putting him or her out of business, and hurts the workers by eradicating the jobs that they determined to be the best option. This can be catastrophic to a third world country’s already struggling economy.

The alternative jobs that third world workers take when a sweatshop closes down almost always have much worse working conditions for much less pay. Common alternatives to factory jobs include scavenging, begging, and prostitution. While sweatshop jobs might not appear ideal in comparison with the Western job market, they are often the best choice a third world worker has to choose from. After all, the worker would not choose to work there if it was not the best option available to them.

A misconception many hold about sweatshops is that these factories’ exploitation of workers fuels a cycle of poverty, but this is absolutely false. In China, 1.2 million people surpass the poverty line every month by being hired by a factory that pays the equivalent of two dollars per day. Sweatshops are not the cause of poverty; rather they are viable pathways that impoverished workers in undeveloped countries can follow to escape poverty.

Child labor and low paying factories were once common in the United States, but through competition, technology became more advanced and the United States became more developed. As the United States became increasingly developed, its workers became more skilled and wages rose. This process continued until families did not need their children to work, which gave children the opportunity to receive a better education. The more educated the citizens became, the more money their labor was worth. This process of economic development is not unique to the United States but occurred in Great Britain, Germany, and many other developed countries as well. It would not be reasonable to pay the American factory workers from the pre-Industrial Revolution the wages that skilled, educated Americans earn today. Factory owners could not afford to pay unskilled workers the wage of a skilled worker. This principle can also be applied to modern day sweatshops. Third world factory owners cannot afford to pay unskilled workers from undeveloped countries the wages of the skilled workers of an economically developed country. This is why enforcing a minimum wage on sweatshops hurts economies and increases unemployment.

A minimum wage is not meant to shut down factories, yet that is often the effect. This is because the sweatshop owner decides that keeping his factory open is not worth the money he would have to pay for labor. Even when factories oblige by minimum wage laws and do not close, owners are often forced to lay off numerous workers, since the worker cannot produce enough in one hour to surpass his or her hourly wage. That worker is no longer worth the money being paid for his or her labor and is subsequently fired.

Just like regulating workers’ wages is harmful, so is regulating workers’ ages. Those opposed to child labor in sweatshops claim that children who work full-time are robbed of their childhood and never receive a good education. This is often true, but children who work in sweatshops are almost always desperately poor and need the money more than they need the education. Attending school does no good for a child who starves because he or she has no money for food. The American who desires to see child labor banned fails to see the situation through the paradigm of the third world child. Working in a sweatshop might not be desirable for the child, but it is certainly more desirable than starving to death.

Another criticism of companies that use sweatshops is that they are taking jobs away from America by outsourcing to foreign countries. However, outsourcing low-level jobs to the third world greatly benefits both these undeveloped countries and the United States. When a company outsources, for example, a job manufacturing tennis shoes, they do so because foreign labor costs less than hiring domestic workers to produce the shoes. When this company spends less to produce the shoes, they are able to charge consumers less to buy the shoes. This benefits Americans by driving down the price they pay for these goods. Companies that outsource production of their goods are also able to spend the money they saved on production by hiring Americans to work higher level jobs within the company, such as sales, marketing, or advertising, which almost always pay more than the lower level production jobs in the first place. This is the economic reason outsourcing is a good practice, but there is also an important moral reason.

Why should Americans want other Americans to be hired over foreign workers? It is understandable for a person to prefer their family and close friends to be hired but what about Americans who are total strangers? Why do American strangers deserve jobs over foreign strangers? They do not. There is no reason Americans should prefer other Americans to be hired over foreign workers other than the fact that Americans have more in common with other Americans. This causes a moral dilemma because the job is not being given to the best worker or the person who needs the job most, but rather the worker who happened to be born within close proximity. There is no denying that usually the foreign worker needs the job more than the American. Even the poorest of Americans are wealthy in comparison with the rest of the world. Companies should not discriminate when hiring workers based on random geographical boundaries, but instead choose the worker who can work the hardest for the least amount of money.

Praising companies that outsource jobs to foreign factories with children working for low pay in harsh working conditions is certainly counter-intuitive, but it is the right thing to do. Sweatshops bring the third world out of poverty. It is better to do something to reduce poverty than to do nothing. Although sweatshops might not be the best jobs, they are doing something to make the poor a little less poor. It is important to understand that eliminating sweatshops does nothing to help the poor, but only takes away the job that the workers from these factories determined to be the best option.