SWEATSHOPS: A NECESSARY EVIL?

Sweatshops: A Necessary Evil?

Balancing Morality with Economic Realities
Alexander J. Perrigo
Global Studies and World Languages Academy
Tallwood High School

SWEATSHOPS: A NECESSARY EVIL?

Cover Page

Table of Contents

Introduction

Methodology

Body
Defining Sweatshops

Origin of Sweatshops

Early Opposition to Sweatshops

Sweatshops in the United States

The Advent of International Trade

Return of the Sweatshop

10

Economic Theory and Sweatshops

10

Utility of Sweatshops

11

Abuse, Choice, and Coercion

12

Conclusion

13

References

14

Introduction

SWEATSHOPS: A NECESSARY EVIL?

If you were to ask any stranger on the street to describe the conditions of a sweatshop, the
response would be swift and condemning: dark, dirty, and cramped. Ask the same stranger what
alternative the workers have, and the answer becomes less clear. Modern sweatshops exist as a
consequence of economic globalization, a phenomenon that allows companies to manufacture goods
cheaply overseas before shipping them to market. Cheap labor and looser safety regulations make
sweatshops profitable for corporations, but many activists condemn the relationships between companies
and developing nations as inherently exploitative. Conversely, economists and economic historians form
both sides of the ideological spectrum contest that this relationship is an integral part of a nations
growth, leading to a drastic increase in standard of living and quality of life. This research paper seeks to
explore this debate, particularly the case made by advocates of globalized labor, in order to determine if
sweatshops are a necessary stage in the economic, social, and political advancement of societies.
Criticisms of sweatshop focus primarily around the low wages and poor working conditions, as
compared to Western labor standards. What many critics fail to recognize, however, is that laborers
choose to work in these facilities because they offer the best possible alternative to traditional
agriculture. While low by American or European norms, sweatshop wages can be double or almost triple
the local average. Efforts to improve working conditions can easily backfire, forcing businesses to lay off
workers, who then resort to other, more dangerous occupations so that they may feed their families.
Conversely, sweatshops in certain regions have a history of coercing workers to take lower wages and
to operate in excessively dangerous conditions, a clear violation of their human rights. In short, the
question of sweatshop labor is complex, and the line between right or wrong is not always clear.

Methodology
Research of the topic was derived relatively equally from both quantitative and qualitative
sources. Information from quantitative sources primarily consists of economic data, which is used to

SWEATSHOPS: A NECESSARY EVIL?

illustrate basic facts, such as average incomes, cost of living, and other assertions that provide a basis of
knowledge on which the rest of the paper is built. Qualitative sources consist mainly of analysis by
economists and other trusted academics within the fields of economics, international trade, and labor
relations.
The majority of the sources used in this paper were found online through databases or with
advanced internet browser searches. Journal entries and newspaper articles are the most academically
reliable, and are hosted online by reputable establishments like the Independent Review, the Library of
Economics and Liberty, and the National Catholic Reporter. Other sources, like blog posts and opinion
pieces, are not presented as factual evidence, but rather as outlines for common economic philosophies
and paradigms. Groups like the Center For a Stateless Society, for instance, support a left-libertarian
view of sweatshops, and their opinionated articles are utilized to present a counterbalance to the author's
personal analysis on the subject.
Some sources are the result of surveys personally conducted by the author within their institution
of learning. The results of these individual response questionnaires are used to demonstrate the common
perceptions of sweatshops in the Western world (and more specifically, the United States) as it relates to
their utility to host nations and to the workers themselves. Although the sample size of said survey is
small, the demographic questioned will be the most influential in West's future treatment and
understanding of low-wage labor and industry, as they will soon be entering the age of political
relevancy and activism.

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5
Defining Sweatshops

The widespread cultural abhorrence the wealthy Western world holds for sweatshops makes it
difficult to find a definition that is not entangled with emotionally critical language. Adding to the
confusion, different groups define sweatshops with focuses respective to their own organizational goals
or motives; the Union of Needletrades Industrial and Textile Employees, for example, claims that
sweatshops are any factory that does not respect the workers' right to create an independent trade union,
while Global Exchange claims that a sweatshop is any factory that does provide workers with a living
wage (Sweatfree FAQs). The most universally acceptable definition, and the one that shall be used for
the remainder of this paper, comes from the United States' Government Accountability Office.
Establishments employing workers at low wages, for long hours, under poor conditions. according to
contemporary Western standards are considered sweatshops (Government Accountability Office [GAO],
1988).

Origin of the Sweatshop

Cheap, industrial labor has a long history in the United States and other Western nations, most
notably the United Kingdom. The origin of the term sweatshop, in fact, has its roots in the textile
industries of Industrial Revolution era Britain (Kingsley, 1850). Before the invention of devices like the
spinning jenny and the spinning mule, both of which are integral components of an industrialized textile
factory, most of Britain's cloth was produced by artisans operating from within their own homes. While
these local weavers were skilled in their craft, they could not produce enough to meet the growing
demand for clothing, fabrics, and other related materials. Driven to find ways to increase their
productivity, some artisans began to innovate upon their old manufacturing methods. Incorporating
parallel inventions in the fields of metallurgy and steam power, some began to centralize their efforts by
concentrating their work at large mill complexes. First powered by horses, then water, and finally steam,
these mills dominated the textile industry, forcing the old cottage manufacturers into obsolescence.
Labor for the new mills arrived from the countryside in droves, the result of another tremendous

SWEATSHOPS: A NECESSARY EVIL?

upheaval, the British Agricultural Revolution.

For much of English history, land usage was dictated by ancient, feudal customs. Manor owners
leased some land for farmers, but large areas of pasture were reserved for communal use. Beginning in
th

the late 17 century, wealthy landowners bought up common land in order to enclose it, or divide it into
privately owned parcels. While this was agriculturally efficient, meaning more food was produced per
acre than had been before, it resulted in the creation of a large, landless working class from the former
subsistence farmers (McElroy, 2012). Seeking to find employment, these untethered laborers migrated
to the towns and cities just as the technologies that would make factories feasible were invented.

Early Opposition to Sweatshops

Working conditions in early sweatshops were, by modern standards, horrendous. Tens to
hundreds of laborers were packed in small, cramped, often poorly lit and ventilated rooms, and worked
upwards of twelve hours a day. Dangerous equipment meant the rate of injury was high, and maimed
workers did not receive compensation for physical damages. Perhaps most frightening to socially and
economically conservative thinkers, sweatshops were altering the old family structure; instead of rearing
children, women were often working in order to supplement their husbands' income (Fitzgerald, 2000).
These radical changes endured by the British people were a cause of alarm for many, the opponents of
said changes being the first in a long line of anti-industrialization and anti-sweatshop activists whose
advocacy continues even today.
Early movements to oppose sweatshop labor divided into three distinctive camps. The first were
sweatshop workers who sought to improve living conditions for themselves within the factories. The
second were cottage workers and artisans who saw the new manufacturers as a threat to their traditional
source of income, and sought to remove or destroy the new technologies which had disturbed the status
quo. The third were members of the emerging, politically conscious middle and upper classes who saw
sweatshops as an affront to humanitarian values. Each combated their perceived injustice in different
ways. Members of the second group were dubbed Luddites after the folkloric hero Ned Ludd, a worker

SWEATSHOPS: A NECESSARY EVIL?

who was mythologized after supposedly destroying two knitting frames in a fit of anger. Taking after
their namesake, Luddites destroyed factory equipment and other capital goods used by the mill owners,
and were often stopped only after troops arrived to quell the unrest (Conniff, 2011). Those employed in
sweatshops, however, agitated for better working conditions less violently than the Luddites, favoring
instead to form underground unions in order to collectively bargain with their employers. Although
banned by the Combination Act of 1799, unions wielded considerable power among the laborers they
represented (Simkin, 1997). Finally, wealthy patrons who were sympathetic with the plight of the lowwage worker wrote in journals, newspapers, and public forums assailing the horror of the sweatshop,
and encouraged their powerful friends to present their grievances to Parliament.

Sweatshops in the United States

The speed at which ideas spread across the Atlantic meant the United States was one of the first
countries outside of Continental Europe to receive the technologies which had fermented the British
Industrial Revolution. Samuel Slater, pejoratively known in his ancestral home as Slater the Traitor,
stole the plans for the water powered spinning machine, at that time a secret closely guarded by the
British government, and brought them to the United States. This design would prove to be instrumental
in laying the foundations of America's industrial base, especially in textiles. Thanks to Slater, by 1835
America was producing 80m worth of cotton a year. In 1790, it had been just 2m (Heath, 2011, para.
14). Upon arriving in the United States, Slater quickly established a system of textile mills dependent
largely on the labor of children aged between seven and fifteen. These children would perform tasks of
varying difficulty and danger, from cleaning the cotton to operating the spinning and carding machines.
This system would be replicated across New England, with mill owners hiring young local women to
live in dormitories near the factory in order to better control when they arrived and for how long they
remained at work (New England Mill Workers). Following the Civil War, the demographic make-up of
America's factories began to change. An influx of immigrants first from Ireland and Germany, and later
from Southern Europe and Russia provided entrepreneurs near the large cities with a cheap,

SWEATSHOPS: A NECESSARY EVIL?

inexhaustible supply of labor. Instead of building their facilities in the countryside, the new factory
owners often operated in the densely packed urban areas that the immigrants called home. At
approximately the same time immigrants started pouring into America's coastal cities, the byproducts of
the Second Industrial Revolution, most notably the railroad, electrification, and the steam-powered ship,
meant mass production was not only possible, but also extremely profitable. Almost every conceivable
consumer good was re-engineered to be made in a factory; everything from glassware to underwear was
produced by wage laborers, most of them sweatshop workers. Safety regulations and labor laws in these
sweatshops were practically nonexistent, causing some of the most well-known industrial catastrophes in
modern memory. The Triangle Shirtwaist Fire, the deadliest factory-related disaster in New York's
history, was particularly damaging to anti-regulatory and pro-business supporters (The Story of the Fire
Introduction). The investigation and subsequent trial and acquittal of the factory owners decisively
swung public opinion in favor of more stringent government oversight and the right for workers to
organize collectively. Union membership grew exponentially, the Department of Labor was formed, and
the government implemented a rudimentary compensation system of sick or injured workers; sweatshops
in the United States had effectively disappeared by the beginning of the Second World War.

The Advent of International Trade

For much of history, companies were relegated to producing goods in their country of origin.
Swedish companies manufactured in Sweden, Japanese companies in Japan, and American companies in
the United States. Even though businesses may have wanted to produce overseas because of increasing
labor costs at home, the slow, rudimentary communication and transportation networks available to
them would make such an ordeal unbearably complex and expensive. A combination of international
trade agreements, domestic policies, and technological advancements from the Sixties onward would
remove these obstacles.
The General Agreement on Tariffs and Trade, or GAAT, was a comprehensive, first of its kind
trade agreement between the world's most important economic powers that was drafted to significantly

SWEATSHOPS: A NECESSARY EVIL?

reduce tariffs and other barriers to trade. Although the first iteration of the Agreement was drafted in
1947, the important round of negotiations, known as the Kennedy Round, took place between 1963 and
1967. The Kennedy Round reduced tariffs on agricultural products, chemicals, and consumer goods,
though not textiles, which were instead managed through a separate treaty, the Multi-Fibre
Arrangement. The institution of GAAT rules on the international marketplace made the business of
importing and exporting raw materials and finished goods far simpler and much cheaper (The GATT
years: from Havana to Marrakesh).
Various domestic policies passed in the United States, most significantly the Trade Expansion Act
of 1962, worked to internally shift the balance of trade by reducing tariffs and taxes on foreign-made
products (Kennedy, 1962). An influx of cheap goods from other developed nations, the barriers to trade
lifted by the newly passed laws, financially squeezed American companies. The easiest way for these
companies to reduce costs in order to better compete with foreign competitors was to cut labor
expenses, but because of laws set in place to protect workers, they were unable to do so.
The widespread use of the telephone, and later cellular telephones and the internet, allowed for
corporations to coordinate economic activities across vast distances and geographic obstacles. Before
the advent of mass communication, messages could take days or weeks to reach their destination, an
eternity where the market is concerned. With a telephone or email, that time lag shrinks to hours or
minutes, making cross regional operations possible.

Return of the Sweatshop

With the elimination of most of the financial costs associated with overseas production, Western
businesses started to shift the less intricate stages of fabrication and assembly to plants in developing
nations where low skilled labor was abundant. These poorly paid workers typically came from rural
areas, and had previously practiced traditional ways of living, such as agriculture and herding.
Companies typically favored countries with either existing industrial infrastructure, such as Korea,
Taiwan, and Japan, or countries without regulatory bodies that put limits on private economic activity,

SWEATSHOPS: A NECESSARY EVIL?

10

such as Bangladesh and Honduras. It is important to note that locally owned and operated companies
also participated in this practice, most noticeably in Japan and its former conquests. The Peace Market in
Seoul, Korea, for instance, was one of the most concentrated areas of sweatshop activity in the world,
with the majority of the factories controlled by domestic corporations (Han, 2012).
Each successive round of negotiations for the GAAT succeeded in cutting tariffs ever lower,
speeding up the process of outsourcing. Many governments in developing nations encouraged this
practice by setting up Special Economic Zones to attract foreign investment. Millions are now employed
in sweatshops, some small, some massive in scope.

Economic Theory and Sweatshops

The theoretical basis for opening up to free trade with developing nations originates in the
th

concept of comparative advantage. Formulated by 19 century economist David Ricardo, the

comparative advantage principle states that nations should focus on making goods that they can produce
relatively more efficiently, even if another nation has an absolute advantage in the production of those
goods. Take the relationship between the United States and El Salvador, for instance. The United States
has an absolute advantage in producing both garments and computer software, meaning it can produce
both more efficiently than El Salvador; however, El Salvador has a relative advantage in producing
garments. This is because the United States, while better than El Salvador at producing garments and
computer software, is more efficient at making computer software than garments. Therefore, it benefits
the United States to produce computer software and import garments from El Salvador, which itself
benefits from selling clothing to America (Ciment, 2006). Free trade policies assist in this process by
removing or reducing the costs of moving goods across borders, thereby giving developing nations like
El Salvador a comparative advantage to manufacture certain types of products, usually low-grade
consumer items. Over time, the infrastructure created to produce low-grade goods can be converted to
the production of high-tech goods, elevating the standard of living. It is through this series of industrial
retrofitting and adaptation that developed nations achieved their own high qualities of life. The issue

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11

many have with this sequence of industrial evolution, however, is that in its early stage, that of lowgrade production, this infrastructure most often takes the form of a sweatshop.

Utility of Sweatshops
An important distinction to make when studying sweatshops is their role as an indicator, or a
symptom, of poverty, not a cause. Many assume that sweatshops create poverty by forcing workers to
labor in underpaid and inhumane conditions. If sweatshops create poverty, then how can the earliest
adopters of industrial production have the highest standards of living in the world, even among its
lowest earners? The answer to the question of the West's current, though declining, dominance is
complicated, and lies at the intersection of demographics, religion, ideology, and a host of other factors.
For the sake of simplicity, however, industrialization will be the focus of this response.
Sweatshops help nations as a whole to cultivate an entrepreneurial culture that encourages future
industrial expansion. This is not to say that societies that hold non-Western values are inferior, rather
they are not suited to competing against others in a world that is increasingly dominated by Western
systems of governance, thought, and economics. The additional incomes provided by sweatshops to
their workers increases spending in their local economies, encouraging the founding of new ventures.
The physical capital needed in future, more complex, is also developed. A country cannot go from
preindustrial practices to building high-grade televisions without the base of industrial knowledge that
operating sweatshops provides. A country with sweatshops is not becoming poorer, it is merely in the
nascent phase of its growth.

Abuse, Choice, and Coercion

As stated earlier in this paper, sweatshops are terrible places to work. Wages are low, the
likelihood of injury is high, and hours are extremely long. That being said, people throughout the
developing world continue to work in sweatshops. Some of them are coerced through the threat of
physical or psychological violence, but many are employed in sweatshops of their own accord,

SWEATSHOPS: A NECESSARY EVIL?

12

prompting the question, why would anyone want to work in a sweatshop?

Despite the conditions, sweatshops are often the best possible option for an individual living in
the periphery. Wages, by Western standards, may be meager, but they can be more than double, and, in
some cases, triple the national average (Powell & Skarbek, 2006). This is because sweatshop employers
need to offer better payment than the local average in order to make up for any danger incurred while
working at their factories. Potential employees factor in the cost of injury, the long hours, and other
negative impacts associated with industrial employment, and will agree to work if the money offered
outweighs said costs. We in the West do the same sort of impact calculus on reality T.V. shows like Fear
Factor. A contestant weighs the reward of performing a feat, fifty-thousand dollars, with the cost of said
feat, psychological discomfort. If the contestant deems the reward to be greater than the cost, he or she
would be willing to complete the task.

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13
Conclusion

Sweatshops, both in theory and in practice, are often poorly understood by those in the
developed world. Although by no means utopian or ideal, sweatshops are an essential part of the early
stages of economic growth that eventually culminate in an elevated standard of living. Each of the
world's most affluent nations, including the United States, was home to factories that we today would
deem sweatshops. The return of sweatshops in developing regions should be neither deplored nor
celebrated, but rather taken as a sign that the same processes that transformed Europe, the United
States, and Japan a hundred years ago are now steadily underway. Complementing and propelling these
changes are liberalizing international economic policies that tear down barriers to trade. Although today
these treaties and agreements better benefit the already developed nations, the current economic
underdogs will reap the rewards as they too rise to prominence.
On an individual level, sweatshops, for the most part, greatly enhance the life prospects of their
workers. Although abuse and physical coercion does occur, and should rightly be exposed and
reprimanded, simply because a business pays its workers poorly by our own Western standards does not
mean that these workers are being exploited. In fact, for many in the developing world, sweatshops are
by far the highest paying jobs. Just because an affluent American would not want to work in a sweatshop
does not mean that a Bangladeshi or a Indonesian would not want to. Many of those opposed to
sweatshops are well intentioned in their goals, but unrealistic in how they seek the achieve them. Closing
down sweatshops negatively impacts the same people they are trying to help, while other proposals,
such as the global living wage, are unlikely to efficiently address the root causes of poverty.
They are an uncomfortable reminder that we are among the privileged few. They are testaments
to humanity's greed and corruptibility. Yet they are also symbols of growth, possibility, and opportunity
for those who freely choose to work in them. We don't want sweatshops, but we need them.

SWEATSHOPS: A NECESSARY EVIL?

14
References

Bole, W. (2001, September 7). Anti-sweatshop campaign mixes ethics, economics. National Catholic
Reporter, p. 9.
This article details the beginnings of a grassroots movement that opposes the sale of garments
produced in sweatshops. The National Catholic Reporter is a reputable secular news source
that focuses on events pertaining to the Catholic Church.
Ciment, J. (2006). Sweatshops - Definitions, History, and Morality. In Social issues in America: An
encyclopedia. Armonk, NY: M.E. Sharpe.
Conniff, R. (2011, March 1). What the Luddites Really Fought Against. Retrieved December 2, 2014,
from http://www.smithsonianmag.com/history/what-the-luddites-really-fought-against-264412/?
no-ist=&page=2
Fitzgerald, R. (2000). The Social Impact of the Industrial Revolution. In Science and its times:
Understanding the social significance of scientific discovery (Vol. 4). Detroit: Gale Group.
Han, S. (2012, October 28). South Korean workers campaign against apparel sweatshop conditions in
Pyunghwa Market, 1969-1970. Retrieved December 11, 2014, from
http://nvdatabase.swarthmore.edu/content/south-korean-workers-campaign-against-apparelsweatshop-conditions-pyunghwa-market-1969-1970
Heath, N. (2011, September 22). Samuel Slater: American hero or British traitor? Retrieved December
11, 2014, from http://www.bbc.co.uk/news/uk-england-derbyshire-15002318
Kennedy, J. (1962, October 11). John F. Kennedy: Remarks Upon Signing the Trade Expansion Act.
Retrieved December 3, 2014.
Kingsley, C. (1850). Cheap clothes and nasty. London: W. Pickering.
Kleen, M. (2011, March 18). Do Sweatshops Belong in a Free Market. Retrieved October 26, 2014,
from http://c4ss.org/content/6454

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This article provides a counter argument to the opinion piece published by Matt Zwolinkski,
and defends the left libertarian opposition to sweatshop labor. The Center for a Stateless
Society is a self described think tank for anarchist economic ideals.
McElroy, W. (2012, March 8). The Enclosure Acts and the Industrial Revolution. Retrieved December
10, 2014, from http://fff.org/explore-freedom/article/enclosure-acts-industrial-revolution/
New England Mill Workers. (n.d.). Retrieved December 5, 2014, from
http://vermonthistory.org/educate/online-resources/an-era-of-great-change/religion-reform/newengland-mill-workers
Powell, B., & Skarbek, D. (2006). Sweatshops And Third World Living Standards: Are The Jobs Worth
The Sweat? Journal of Labor Research, 27(2), 263-274.
Powell, B. (2008, June 2). In Defense of "Sweatshops" Retrieved October 15, 2014, from
http://www.econlib.org/library/Columns/y2008/Powellsweatshops.html
The article provides a brief overview of the argument for the continued existence and growth
of sweatshops. The author, Benjamin Powell, is a respected academic in the field of
economics, and currently teaches at Texas Tech University.
Powell, B. (2014). Meet the old sweatshops: Same as the new. Independent Review, 19(1), 109-109.
This article provides an in depth look into the history of sweatshops in the West and East Asia
in order to demonstrate that higher safety standards can impede the health of sweatshop
workers in the long term.
Simkin, J. (1997, September 1). Combination Acts. Retrieved December 9, 2014, from http://spartacuseducational.com/Lcombination.htm
Story of the Fire - Introduction. (n.d.). Retrieved December 9, 2014, from
http://www.ilr.cornell.edu/trianglefire/story/introduction.html

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Sweatfree FAQs. (n.d.). Retrieved December 5, 2014, from

http://www.globalexchange.org/fairtrade/sweatfree/faq
Sweatshops in the U.S. (1988, August 1). Retrieved December 11, 2014, from
http://www.gao.gov/assets/80/77185.pdf
The GATT years: From Havana to Marrakesh. (n.d.). Retrieved December 7, 2014, from
http://www.wto.org/english/thewto_e/whatis_e/tif_e/fact4_e.htm
Triangle Shirtwaist Factory Fire. (n.d.). Retrieved December 2, 2014, from
http://www.history.com/topics/triangle-shirtwaist-fire
Zwolinski, M. (n.d.). Answering the Left-Libertarian Critique of Sweatshops. Retrieved October 26,
2014, from http://bleedingheartlibertarians.com/2011/10/answering-the-left-libertarian-critiqueof-sweatshops/
This article offers a critique of the left-libertarian view on sweatshops, and provides responses
to some of the common points made by opponents of sweatshops. While the site on which this
article was published is not well known, reputable source, Matt Zwolinski is a respected
academic and professor at the University of San Diego