NCPA - National Center for Policy Analysis

Sweatshops Offer Ways To Survive

June 22, 1997

When Harvard University economist Jeffrey D. Sachs was recently asked whether there were too many sweatshops in poor nations, he replied that his concern was "not that there are too many sweatshops, but that there are too few."

Many other economists are also coming to recognize that low-wage plants overseas making clothing and shoes for export to America and other industrialized-world markets are actually providing an important service to their workers. These plants are a necessary first step toward prosperity in developing countries.

  • Sachs says these types of jobs eventually led to prosperity in Hong Kong and Singapore and are what is now needed in Africa to facilitate the transition to increased prosperity from today's backbreaking rural poverty in many areas.
  • Within a generation, apparel-assembling and similar jobs in Hong Kong, Singapore, South Korea and Taiwan took national incomes from about 10 percent of that of the U.S. to 40 percent.
  • According to economist Paul Krugman of the Massachusetts Institute of Technology, even in a nation as corrupt as Indonesia, industrialization originally based on sweatshops has reduced the portion of malnourished children from more than half in 1973 to one-third today.

Krugman says the "overwhelming mainstream view among economists is that the growth of this kind of employment is tremendous good news for the world's poor." When American corporations cut their ties to sweatshops in response to media criticism, the victims are the very people sweatshop opponents say they want to help.

In Honduras, where the legal working age is 14, girls toiled 75 hours a week for the 31 cent hourly minimum wage to make the Kathie Lee Gifford clothing line for Wal-Mart. When Wal-Mart canceled its contract, the girls lost their jobs and blamed Mrs. Gifford.

Source: Alan R. Myerson, "In Principle, a Case For More 'Sweatshops,'" New York Times, June 22, 1997.


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