Wednesday, 4 April 2012

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
sweatshop, sweatshops, economics for teens, economics for teenagers, teenage economist, teen economist

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! 


8 comments:

  1. Wow, this is such a thorough investigation! I think that you're right in saying that standards of living are different everywhere and I'm surprised that Gethin Chamberlain from The Guardian didn't pick up on that.

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    Replies
    1. Thanks, Sarah! I was thinking the same thing when I read his article so I compiled some data to show by exactly how much standards of living differ between the UK and India.

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  2. Fantastic job. Thoroughly investigated, and wonderfully executed. To respond to Sarah’s above question, the reason why Gethin Chamberlain didn’t pick up on this information is because he/ she did not want to because it would hurt his point to do so.

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    1. Thanks, Ross! When we were looking at this topic at school a couple of years ago, I felt that the argument they provided us with was too one-sided and so I gathered some evidence to support the idea that sweatshops certainly have some benefits. Thanks for taking the time to read and comment upon this post :)

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  3. sweatshops are all over the world and the workers, in most cases, cannot "demand better pay" because they are in extreme poverty and if they do so they will be abused, as you mentioned about human rights abuses. how can the workers in "sweatshops" demand anything or get anything when their human rights are abused. the reason they are paid seamingly reasonable rates, in your opinion, is so they can survive and continue providing labour. the issue around sweatshops is not solely focused on pay but rather on the abusive situation these people live and work in. How is it okay for businesses to treat their workers bad just because those employees live in bad conditions?

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  4. Thanks for commenting. Of course it is terrible that in some cases workers' human rights are being abused, but it's important to remember that the workers still have the option of going to work at a different, more friendly factory. In fact, factories would capitalise on this opportunity by providing a better working experience to attract more workers. They wouldn't even have to pay the workers higher wages, but could still expect good levels of labour because the workers would appreciate not being abused.

    In China, in particular, this has become the norm as workers' unions demand higher wages and better working conditions. This has resulted in the Chinese government having to rethink China's economic plans for the future. They now plan to develop their high-tech (quaternary)industries because they aren't able to manufacture at as competitive rates as before.

    I agree that it is unfortunate that workers have to be abused when a country first becomes industrialised as was the case in China earlier and further back in history during the Industrial Revolution of 19th century Britain. However, it seems that it is through manufacturing that countries are able to gain enough skills and capital to invest in improving citizens' quality of life. It's not that it's okay to treat workers badly, but that eventually the country and its citizens are able to live lives of a much better quality, I think. Being able to develop a strong manufacturing base has historically been the first step towards a country becoming more developed and sensitive towards the wishes of its citizens.

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  5. First of all; I'd like to say that this is a great article, with very thorough investigations. Great work!

    But I have a fundamental disagreement with you when you said in your conclusion that their pay is good relative to where they would be spending it. For instance, if we took the minimum wage of the workers in india per month, and we examine your lists of the prices of various objects that you'd need to live, we need to keep in mind that, if they were to buy only one of all of those items, that would be all they had for the month. Can you live for a whole month on just a litre of milk, a loaf of bread, and a small portion of tea and sugar and flour?

    Yes, I understand that they won't be buying everything on that list; it will obviously change according to their need at the time. But still; that does not leave them with a very large margin to spend money if any unexpected expense happens to occur. On top of that, as you said in your fantastic article, is that many children in third-world, underdeveloped countries work int sweatshops to support their families, which is not only a violation of international law, but it also means these kids have no opportunity for an education.

    But that's just my take on it, please correct me if I misunderstood anything! :) Like I said earlier, great article :D

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  6. Thanks, Eyrie! :D

    The idea that I've tried to argue here is that actually, many factory workers are paid higher wages than the minimum wage. If they are just semi-skilled, they can expect to earn 7000 Rs., which is 2800 Rs. greater than the minimum wage. The chart showing the salaries explains this idea in more detail. Looking at these figures and comparing them to the cost of living, it is clear that the workers are not forced to starve, or live in terribly impoverished conditions, as Gethin Chamberlain seems to argue in his article on sweatshops in India. (http://www.guardian.co.uk/world/2010/aug/08/gap-next-marks-spencer-sweatshops)

    What I'm really trying to achieve with this article is simply to point out that sweatshops shouldn't be demonised, because they are part of the transition a country makes from developing to developed country. We mustn't forget that it was the Industrial Revolution that, although it wasn't brilliant for workers at the time, has allowed our modern society to exist. To me it seems unfair to prolong the suffering of countries by not allowing them to develop in the ways that the western countries did in the past. A country cannot develop its welfare system if it does not have the money to be able to invest into it. Now that China, for example, has become an economic superpower, it has started to massively improve the standard of living for ordinary Chinese people. One of the greatest reasons why it was able to achieve this was through initially providing cheap labour and allowing the existence of "sweatshops".

    In terms of the fact that children need to work to support their families, I agree that it is sad, and it would be wonderful if they could be educated. However, at the moment, working in factories is a better alternative to scavenging through rubbish for things to sell or eat, or going into child prostitution. Until the governments of countries where this is a problem develop a sustainable scheme to tackle this problem (which they might have, but of which I am not currently aware), working in factories appears to be the best option for these children.

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