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The One Minute Case for “Sweatshops”

The opposition to sweatshops

Opposition to “sweatshops” originated with the socialist movement and the first labor unions, and these groups remain their most vocal critics today. For labor unions, sweatshops are both competition and evidence that unions are not needed to raise wages and improve working conditions. For socialists, sweatshops are their last, best hope, that somewhere, somehow, capitalism causes suffering. Here are some of their loudest arguments against sweatshops:

“Sweatshops pay low wages and subject workers to harsh conditions”

It is ignorant and misleading to hold businesses in the developing world to the same standards as those in the West. Multinational companies face entirely different challenges and expenses than in the West: oppressive, unpredictable, and corrupt governments, long distances, language and cultural barriers, lack of a skilled or educated workforce, primitive infrastructure, and labor activists back at home.

Consider the condition of third world countries before the multinationals arrival. The majority of people live in the same state as they have for all of human history – in a permanent state of near-starvation, with no jobs and no future to look forward to other than the backbreaking labor of subsidence farming. Everyone works from almost from the time that he or she can walk, and most children die young from starvation or malnutrition. If they are lucky, they find work as scavengers, farm hands, prostitutes, beggars, petty criminals, or trash collectors.1

Sweatshops” offer a considerable improvement from this state: Sweatshop wages are more than double the national average in Cambodia, Haiti, Nicaragua, and Honduras. In Honduras, where almost half the working population lives on $2/day, “sweatshops” pay $13.10/day.2

“Sweatshops use child labor”

Child labor is not caused by markets, but a universal fact of human society throughout history.  It  is  necessary in the developing world because given the low productivity of their parents, the alternative is starvation.  It is only the unprecedented wealth generated by capitalism which created the possibility of most children (rather than a small elite) spending their childhood with play and learning rather than labor.

According to a 1997 UNICEF study, 5,000 to 7,000 Nepalese children turned to prostitution after the US banned that country’s carpet exports in the 1990s.  After the Child Labor Deterrence Act was introduced in the US, an estimated 50,000 children were dismissed from their garment industry jobs in Bangladesh, leaving many to resort to jobs such as “stone-crushing, street hustling, and prostitution.” The UNICEF study found these alternative jobs “more hazardous and exploitative than garment production.

The only way to eradicate child labor is the same as in was eliminated the West – by raising the productivity of adults sufficiently to feed their families.

“Sweatshops are coercive environments”

Workers in sweatshops are free to quit or look for another job anytime, but they remain because they consider it the next best alternative. Their pay and working conditions seem low to us, but they are an economic step forward compared to subsistence farming. Real slavery exists today not due to economic development, but due to totalitarian regimes that do not recognize basic human rights such as North Korea, Cuba, and the Islamist militias of Sudan.

“Sweatshops destroy local cultures”

One criticism with a kernel of truth, is that globalization obliterates local cultures by exporting Western values. Capitalism does encourage certain values such as productivity, rationality, independence, and equality of opportunity, which are incompatible with the fatalism, tribalism, caste-based discrimination, and misogyny of most primitive societies. Rather than condemn these values, we should recognize that they are responsible for the tremendous material success of Western civilization and urge their adoption worldwide.


  1. UNICEF: State of the World’s Children 1997
  2. Ben Powell and David Skarbek: Sweatshops and Third World Living Standards: Are the Jobs Worth the Sweat? Journal of Labor Research; Spring 2006.

Further reading:

  • Robert W. Tracinski: The “Sweatshop” Scam
  • Thomas DiLorenzo: How “Sweatshops” Help the Poor
  • Benjamin Powell and David Skarbek: Don’t get into a lather over sweatshops
  • Wikipedia: Sweatshop


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