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Policy Debate: Does the anti-sweatshop movement help or harm workers in low-wage economies?


Issues and Background

The advantages of established First World industries are still formidable. The only reason developing countries have been able to compete with those industries is their ability to offer employers cheap labor. Deny them that ability, and you might well deny them the prospect of continuing industrial growth, even reverse the growth that has been achieved. And since export-oriented growth, for all its injustice, has been a huge boon for the workers in those nations, anything that curtails that growth is very much against their interests. A policy of good jobs in principle, but no jobs in practice, might assuage our consciences, but it is no favor to its alleged beneficiaries.
~Paul Krugman, Slate, 3/20/97

While caution is clearly needed in setting minimum decent standards for workplace conditions, workers rights, and wage levels, there is still no reason to assume that a country or region that sets reasonable standards must experience job losses. Additional policy measures will also be crucial for enhancing any region’s overall employment opportunities and competitiveness. Such initiatives include: measures to expand the overall number of relatively high quality jobs; relief from excessive foreign debt payments; raising worker job satisfaction and productivity and the quality of goods they produce; and improving the capacity to bring final products to retail markets. Moreover, as long as consumers in wealthier countries are willing to pay somewhat higher retail prices to ensure that garments are produced under non-sweatshop conditions—as recent polling data for the U.S. suggests is the case—the higher revenues within the industry could be used to improve workplace conditions and wages for production-level workers, without creating pressures for manufacturers to reduce their number of employees.
~Scholars Against Sweatshop Labor


The anti-sweatshop movement in the U.S. and other industrialized economies has, in recent years, attempted to use consumer boycotts to eliminate sweatshop working conditions and child labor in less developed economies. Unions and college student groups have been leading the drive for sweatshop boycotts.

The anti-sweatshop movement received a great deal of popular attention when it was discovered that Kathie Lee Gifford's clothing company had employed Honduran sweatshop workers to produce her line of clothing for Walmart. Approximately 10% of the workers employed in this task were between the ages of 13 and 15. A 75-hour workweek was the norm in these factories. When this became publicized, Kathie Lee Gifford denounced these sweatshops and stated that she was unaware of the working conditions in these factories.

In response to the anti-sweatshop movement, several organizations have been created or have expanded their roles to monitor working conditions in less developed countries. Among the major organizations serving this function are the Workers Rights Consortium (WRC), the Fair Labor Association (FLA), Verité, and Social Accountability International (SAI).

Advocates of boycotts of items produced in sweatshop working conditions argue that these boycotts will force foreign companies to improve pay and working conditions. This argument is sometimes based on a belief that firms operating sweatshops are receiving positive economic profits as a result of the exploitation of their workers. In this case, improvement in working conditions could be made without a substantial reduction in employment.

Those in the anti-sweatshop movement also cite surveys that indicate that consumers in industrialized economies are willing to pay higher prices for products produced under better working conditions. This suggests that the adherence by firms to "codes of conduct" may allow firms in low-wage economies to pay higher wages to their workers without losing profits.

Opponents of boycotts argue that workers choose to work in sweatshops only if the utility associated with the pay and working conditions exceed that of their next-best alternative use of time. They suggest that a boycott that reduces demand for output produced in these factories will reduce the demand for labor in these economies, resulting in lower average wages for workers.

Much of the public attention in the anti-sweatshop movement has been focused on multinational businesses. When operating their own factories in less developed countries, these firms generally offer higher wages and better working conditions than are the norm in these countries. These companies also, however, subcontract much of the work to local businesses. These subcontracting firms account for a substantial share of documented sweatshop working conditions. One of the divisive issues in the anti-sweatshop movement is whether multinational firms should be a part of the regulating and monitoring process.

Unions tend to be among the strongest advocates of boycotts of products produced in sweatshops. This may be due to legitimate concerns over the wellbeing of foreign workers. Domestic union workers, however, may benefit from a boycott of products produced by foreign sweatshop workers. The demand for domestic union workers will rise (and become more inelastic) if the goods produced by low-wage sweatshop workers are no longer perceived as being close substitutes to the goods produced by union workers. Therefore, a boycott of this sort will be expected to increase the wage and employment levels for union workers.

While much of the anti-sweatshop movement is directed at foreign sweatshops, activists note that sweatshops still exist in the U.S. Studies suggest that a substantial proportion of plants in the domestic textile industry are in violation of laws concerning the minimum wage, overtime pay, or OSHA regulations. Illegal aliens are especially likely to be the victims of sweatshop working conditions in the U.S. since they are unlikely to initiate legal action against their employers.

Primary Resources and Data

  • Alexander Gourevitch, "No Justice, No Contract: The Worker Rights Consortium Leads the Fight Against Sweatshops"
    In this June 29, 2001 online American Prospect article, Alexander Gourevitch examines the role of the Worker Rights Consortium in the anti-sweatshop movement. As part of this discussion, he investigates the history of the recent anti-sweatshop movement in the U.S. Gourevitch argues that one of the most important issues in the anti-sweatshop movement has been the full public disclosure of the location of factory sights. Monitoring is not possible without this disclosure. He also argues that the effectiveness of the Fair Labor Association is limited by its willingness to allow companies to monitor themselves. Gourevitch argues that the independent monitoring service provided by the Worker Rights Consortium is better able to illuminate abuses.

  • The Smithsonian Institution, "Between a Rock and a Hard Place: A History of American Sweatshops, 1820 - Present"
    This website contains pictures of materials from the Smithsonian Institution's exhibit on the history of sweatshops in the U.S.

  • Business for Social Responsibility Education Fund, Investor Responsibility Research Center, and Dara O'Rourke, "Independent University Initiative Final Report"
    This report examines the working conditions in firms at which university-licensed clothing is manufactured. The study was conducted through a joint initiative by Harvard University, the University of Michigan, Notre Dame University, Ohio State University, and the University of California. It was found that working conditions were relatively poor in apparel factories located in China, El Salvador, Mexico, Pakistan, South Korea, Thailand, and the United States. This study suggests that the use of a variety of monitoring agencies with alternative "Codes of Conduct" results in duplicative monitoring effort and does not encourage greater compliance. Since different firms often adopt different standards, monitoring and compliance costs are higher for manufacturing firms that perform subcontract work for several companies that adopt different standards. (The Adobe Acrobat viewer plugin is required to view this document. You may download this viewer by clicking here.)

  • Pilot Project for Licensing Labor Code Implementation, "Final Report"
    This October 3, 2000 report summarizes the result of a pilot program on labor code licensing implemented by representatives of Boston College, Duke University, Georgetown University, the University of North Carolina at Chapel Hill, the University of Southern California, and the University of Wisconsin at Madison. In this pilot program, monitoring programs for five licensees were implemented on a trial basis. The five factories that were monitored were located in Costa Rica, El Salvador, Korea, Mexico, and Taiwan. The audits found some shortcomings in each of the factories examined. Some, but not all, of these issues were corrected before follow-up audits. The Adobe Acrobat viewer plugin is required to view this document. You may download this viewer by clicking here.

  • International Labour Organization, "Labour Practices in the Footwear, Leather, Textiles, and Clothing Industries"
    This October 2000 report on labour practices in the footwear, leather, textiles and clothing industries examines the effect of globalization on these industries. It is noted that production in these industries increased dramatically in the 1980s and 1990s in Asia and in both South and Central America while production fell in Europe. These industries have been a major source of employment for women in low-wage economies (74% of the workers in the global clothing industry were women in 1995). It is noted that wages had increased in these industries in the 1990s and the male-female wage gap had declined.

    This report indicates that child labor appears to have been declining, but not eliminated, in the 1990s. A recent study was cited that indicates that there were approximately 250 million children aged 5 through 14 who were working in the late 1990s. A substantial share of this child labor appears to be in the footwear, leather, textiles and clothing industries. National governments, however, have been taking a more active role in restricting the use of child labor in most economies.

  • U.S. Department of Labor, "Wages, Benefits, Poverty Line, and Meeting Workers' Needs in the Apparel and Footwear Industries of Selected Countries"
    This February 2000 study examines working conditions in the apparel and footwear industries in 35 of the major countries involved in these forms of production. This document provides very detailed information on laws governing working conditions (including laws governing the minimum wage and overtime) in each economy. Measurement problems in establishing poverty levels and poverty rates are also discussed. Wage rates, the length of the workweek, and poverty rates for workers in these industries are compared across economies. (The Adobe Acrobat viewer plugin is required to view this document. You may download this viewer by clicking here.)

  • U.S. Department of Labor, Employment Standards Administration
    The web site of the Employment Standards Administration of the U.S. Department of Labor contains information on compliance with U.S. laws governing wages, hours, and working conditions.

  • Kheel Center for Labor-Management Documentation and Archives, Cornell University, "Triangle Factory Fire"
    The Triangle Shirtwaist Factory Fire in New York City on March 25, 1911, resulted in the deaths of 146 of 500 workers who had been laboring under sweatshop working conditions. The publicity and investigations that resulted from this fire resulted in a public outcry over poor working conditions.

  • World Trade Organization
    The World Trade Organization monitors and enforces international trade agreements. Opponents of sweatshops argue that the globalization that has resulted from the relaxation of trade barriers has resulted in a shift of employment in several manufacturing industries from industrialized economies to low-wage economies in which sweatshop production is commonplace. Advocates of free trade argue that globalization has increased the demand for labor and wages in these low-wage economies, improving the position of low-income households.

  • Worker Rights Consortium
    The Worker Rights Consortium (WRC) has established a code of conduct. It monitors firms for compliance with this code. This organization has been used by many colleges and universities to ensure that college-licensed products are not produced under sweatshop working conditions.

  • Fair Labor Association
    The Fair Labor Association (FLA) is another nonprofit organization that has established a code of conduct. It monitors firms for compliance with this code. This organization has also been used by many colleges and universities in their attempts to ensure that college-licensed products are not produced under sweatshop conditions. Some activist groups have criticized this organization for allowing firms to participate in their process. Others argue that this enhances their effectiveness in achieving their goals.

  • Social Accountability International
    Social Accountability International (SAI) is a human rights organization that monitors firms for compliance with workplace standards. This website provides a detailed description of the process by which their standards are developed and monitored.

  • Human Rights Watch
    Human Rights Watch is an international organization that works to publicize and eliminate human rights abuses. The human rights issues investigated by this organization include child labor and poor working conditions.

  • Sweatshop Watch
    Sweatshop Watch is a coalition or organizations that are opposed to sweatshop working conditions. Their website provides numerous examples of sweatshop working conditions, primarily in the garment industry. An extensive collection of links to anti-sweatshop resources is provided on this site.

Different Perspectives in the Debate

  • United Students Against Sweatshops
    United Students Against Sweatshops is an international coalition of student groups that are working to eliminate sweatshops. One of their main strategies is to attempt to prohibit campus purchases from firms that operate sweatshops. It is argued that colleges should only purchase materials from companies in which all workers are paid a "living wage" (a wage that is set at a level at which a full-time worker will be able to support a family at or above the poverty level). Detailed information on this organization may be found on its FAQ page.

  • Students Against Sweatshops - (Trent University, Canada)
    The web site of the Trent University (Canada) branch of Students Against Sweatshops contains information on the Canadian anti-sweatshop movement on college and university campuses.

  • Academic Consortium on International Trade
    The Academic Consortium on International Trade argues that boycotts of firms relying on sweatshop labor ultimately harm the very workers the boycotts are intended to assist. The sweatshop page at this web site contains links to an extensive collection of online resources containing viewpoints from both sides of this issue. Questions are raised concerning the methods recommended by anti-sweatshop groups in a letter to college presidents prepared by the members of this consortium. This group consists of a well-respected collection of economists and lawyers who specialize in international trade issues.

  • Scholars Against Sweatshop Labor
    This organization is composed of academics (primarily economists) who endorse the use of boycotts of products produced under sweatshop working conditions. The main arguments of this group may be found in their October, 2000 statement written in response to the letter to college presidents issued by the Academic Consortium on International Trade. It is argued that boycotts of products produced by sweatshop workers indicate a willingness by American consumers to pay more for products produced under humane working conditions. This suggests that companies relying on sweatshop working conditions could increase wages without a substantial reduction in the sales of their products. If this is the case, higher wages could result in higher employment rather than lower' levels of employment.

  • AFL-CIO, "Stop Sweatshops"
    This page, provided by the AFL-CIO, provides information on the anti-sweatshop movement from a union perspective. Links to other resources in the anti-sweatshop movement are provided from this site.

  • Union of Needletrades, Industrial and Textile Employees (UNITE)
    The Union of Needletrades, Industrial and Textile Employees (UNITE) was one of the first groups to lobby for boycotts of products produced under sweatshop working conditions. This union helped to develop and coordinate student protests against sweatshops. The website of this organization contains information on their Buy Union campaign, a campaign that encourages groups from buying products produced by foreign sweatshops (or for that matter, by any non-union manufacturer).

  • International Confederation of Free Trade Unions, "Trade & Labour Standards"
    This web page presents the positions of the International Confederation of Free Trade Unions on international labor standards. It is argued that globalization has resulted in a shift in many types of labor from high-wage to low-wage economies. Child labor and forced labor are also cited as problems in some of these low-wage countries.

  • International Labour Organization
    The International Labour Organization is an international organization that is concerned with issues such as child labor, working conditions, and labor standards. This web site contains a large collection of information and studies dealing with these and related issues.

  • Doris Hajewski, "The Unsettling Price of Low-Cost Clothes"
    In this December 29, 2000 JSOnline article, Doris Hajewski examines sweatshop working conditions in Nicaragua. She notes that employees in the Chentex Garments factory are paid a little over $7 a day for a 10-hour workday. Hajewski presents arguments on both sides of this issue in this article.

  • Paul Krugman, "In Praise of Cheap Labor: Bad Jobs at Bad Wages are Better Than No Jobs at All"
    Paul Krugman, in this March 20, 1997 Slate article, argues that sweatshops play an important role in improving the economic wellbeing of workers in developing economies. He argues that sweatshop labor is a preferable alternative to lower-wage employment. Krugman suggests that sweatshop industries offer higher wages than workers could receive elsewhere and create multiplier effects that stimulate the rest of the economy.

  • William Anderson, "Kathie Lee's Children"
    In this September 1996 Free Market article, William Anderson argues that sweatshops provide better working conditions for foreign workers than is available in alternative occupations. He indicates that the introduction of sweatshops in Honduras has resulted in substantial increases in wages and job opportunities. Anderson argues that prohibitions of child labor in less developed economies make children less valuable to their parents. He suggests that pressure from Oxfam resulted in the layoff of 30,000 children, causing thousands to starve or turn to prostitution. Anderson argues that U.S. unions support bans on sweatshops because this increases the earning prospects for U.S. union members.

  • James K. Galbraith, "Making the case for higher numbers"
    In this June 24, 2001 Boston Globe article, James K. Galbraith argues in support of boycotts of materials produced under sweatshop working conditions. Critics of this movement, he suggests, are relying on simplistic demand and supply models of competitive markets that are not appropriate for describing many labor market processes. Galbraith indicates that, under more realistic economic models (e.g., efficiency wage and monopsony models), higher wages may lead to higher levels of employment. He argues, though, that international agreements reached through the WTO would be more effective in eliminating sweatshop working conditions and child labor. Boycotts of specific manufacturers are less likely to achieve the broader goal of improving working conditions in low-wage economies.

  • Green Party of Aotearoa, New Zealand, "Greens Return Sweat Shop 'Spots' to Telecom"
    This September 20, 2000 press release describes a situation in which members of New Zealand's Green Party return gifts produced in a sweat shop to their donor. Child labor and poor working conditions in Chinese factories are described in this document.

  • Northwestern University, University Services, "Statement by Northwestern University on the Fair Labor Association and the Worker Rights Consortium"
    As a result of lobbying efforts by Northwestern Students Against Sweatshops, Northwestern University became one of the early members of the Fair Labor Association, a group that certifies that products are not produced under sweatshop working conditions. It has also joined the Collegiate Licensing Company and is affiliated with the Worker Rights Consortium, two other groups that attempt to certify that working conditions at participating firms meet basic standards.

  • University of Wisconsin at Madison, "UW-Madison and Sweatshops"
    This web site contains information of the official position of the University of Wisconsin at Madison on the use of sweatshop labor in producing university licensed apparel. This institution has been particularly active in requiring disclosure and adherence to and monitoring of international labor standards.

  • Thomas L. Friedman, "Knight is Right"
    Thomas L. Friedman, in this June 20, 2000 New York Times op-ed, discusses the decision by Phil Knight (the chairman of Nike) to withdraw a contemplated $30 million donation to the University of Oregon. This decision was made in response to the University of Oregon's decision to join the Worker Rights Consortium instead of the Fair Labor Association. Friedman argues that the approach of the Fair Labor Association is more likely to result in positive impacts in working conditions for sweatshop workers. He suggests that the Worker Rights Consortium is backed by unions to further protectionist objectives.

    This website contains online information on sweatshops from an anti-sweatshop perspective.

  • Boycott Nike Home Page
    This online article suggests that Nike has relied on sweatshop labor in Vietnam. A CBS News study of working conditions in Nike factories in Vietnam is cited as evidence of these conditions.

  • Nike, "Workers and Factories: Compliance"
    This Nike web site discusses Nike's Code of Conduct and its responses to criticism over the use of sweatshop labor.

  • The Collegiate Living Wage Working Group
    The Collegiate Living Wage Working Group is a UNC-Chapel Hill group organized to attempt to raise ensure that a living wage is received by workers in companies that produce college-licensed products. Links to several online research studies are provided at this site.

  • Ajit Singh and Ann Zammit, "The Global Labour Standards Controversy: Critical Issues for Developing Countries"
    This policy study examines the effect of the imposition by industrialized countries of global labour standards. Singh and Zammit argue that these standards are often seen by developing economies as being protectionist in nature. They suggest that such standards would harm developing economies without providing substantial benefits to industrialized countries. It is argued that a better strategy is to encourage economic growth and structural change in less developed economies.

  • Kimberly Ann Elliot and Richard B. Freeman, "White Hats or Don Quixotes? Human Rights Vigilantes in the Global Economy"
    Kimberly Ann Elliot and Richard B. Freeman, in this online study, investigate the willingness of consumers to pay a higher price for products produced under better working conditions. Survey evidence is presented that indicate that consumers respond to information about working conditions and are willing to pay a higher price for products that are not produced under sweatshop conditions. In particular, it was found that consumers, on average, were willing to pay a premium of 28% on $10 items and 15% on $100 items for goods produced under good working conditions. The authors use results from experimental economics to provide further support for these survey results. (The Adobe Acrobat viewer plugin is required to view this document. You may download this viewer by clicking here.)

  • Mary Bull, "Boycott the Gap: 'Tis the Season to E_S_C_A_L_A_T_E!!!"
    This December 8, 2000 online document discusses the boycotts that were used to encourage the Gap to not sell products produced under sweatshop working conditions. It is argued that previous boycotts resulted in a substantial reduction in the Gap's profits.

  • Michael T. Rock, "Public Disclosure of the Sweatshop Practices of American Multinational Garment/Shoe Makers/Retailers: Impact on Their Stock Prices
    This online paper uses event study analysis to examine the effect of public disclosure of sweatshop working conditions on a firm's stock price. Rock finds that the disclosure of sweatshop practices has resulted in an adverse effect on firms' stock prices. In the case of Reebok, it is found that the introduction of anti-sweatshop practices has resulted in a positive effect on the firm's stock price. (The Adobe Acrobat viewer plugin is required to view this document. You may download this viewer by clicking here.)

  • Clean Clothes Campaign
    This website argues for the abolition of sweatshop labor in the clothing industry. Newsletters, online articles, a discussion of their campaign, and other related materials are available on this site.

  • Young Chang, "Behind-the-Scenes Fashion: Exploitation in Today's Garment Industry"
    Young Chang, in this October 8, 1998 Johns Hopkins Newsletter article, describes an alternative fashion show at Johns Hopkins University. Students at this show wore clothes produced under sweatshop working conditions. It is argued that the globalization that has resulted from NAFTA, the GATT, and other trade agreements have encouraged the use of sweatshop labor in low-wage economies.

  • National Labor Committee
    The National Labor Committee argues for the elimination of sweatshop working conditions. An extensive collection of online resources that describe working conditions in sweatshops is available on this site.

  • Jews for Racial and Economic Justice, "Campaign Against Sweatshops and for Decent Jobs at Living Wages"
    Jews for Racial and Economic Justice provides a historical perspective on the use of sweatshops in the U.S. They argue for a boycott of products produced using sweatshop labor.

  • Mark Weisbrot, Robert Naiman, and Natalia Rudiak, "Can Developing Economies Afford to Ban or Regulate Child Labor?"
    This online article examines whether low-income economies can afford to ban child labor. This study presents estimates of the real per capita income levels in industrialized economies at the time at which they imposed a ban on child labor. It is observed that most low-wage economies have achieved a level of per capita income that is comparable to the levels received in industrialized economies at the time at which their child labor ban was instituted. This suggests that a child labor ban could be imposed with no greater cost than had been experienced in industrialized economies. (The Adobe Acrobat viewer plugin is required to view this document. You may download this viewer by clicking here.)

  • Robert Pollin, Justine Burns, and James Heintz, "Global Apparel Production and Sweatshop Labor: Can Raising Retail Prices Finance Living Wages?"
    In this 2001 (revised in 2002) Political Economy Research Institute working paper, Robert Pollin, Justine Burns, and James Heintz investigate the possibility of financing living wages through higher retail prices. The authors note that surveys indicate that consumers are willing to pay higher prices for products that are produced under humane working conditions. They find that the retail price increases needed to provide "living wages" in less developed economies are within the range that surveys indicate that U.S. consumers are willing to pay. This suggests that sweatshop working conditions could be eliminated without a significant adverse employment effect. (The Adobe Acrobat viewer plugin is required to view this document. You may download this viewer by clicking here.)

  • John Miller, "Nike to the Rescue? Africa Needs Better Jobs, Not Sweatshops."
    John Miller makes a case for the anti-sweatshop movement in this September 6, 2006 Dollars and Sense article. He accepts the argument that sweatshops are often better than alternative employment in many low-wage economies, but these jobs do not generally go to the poorest of the poor in these economies. The higher wages paid to sweatshop workers are often the result of skill premiums associated with higher levels of human capital. Miller indicates that the slightly higher wages paid to sweatshop workers "is no excuse for sweatshop abuse: that conditions are worse elsewhere does nothing to alleviate the suffering of workers in export factories. They are often denied the right to organize, subjected to unsafe working conditions and to verbal, physical, and sexual abuse, forced to work overtime, coerced into pregnancy tests and even abortions, and paid less than a living wage."

  • Maquila Solidarity Network
    On this web site, the Maquila Solidarity Network provides information about sweatshop practices. Case studies, reports, press releases, and links to related online resources are available on this site.


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