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Sweatshops and Third World Living Standards: Are the Jobs Worth the Sweat?

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  • BENJAMIN POWELL
  • DAVID SKARBEK

Abstract

Many studies have shown that multinational firms pay more than domestic firms in Third World countries. Economists who criticize sweatshops have responded that multinational firms' wage data do not address whether sweatshop jobs are above average because many of these jobs are with domestic subcontractors. We compare apparel industry wages and the wages of individual firms accused of being sweatshops to measures of the standard of living in Third World economies. We find that most sweatshop jobs provide their workers an above average standard of living.

Suggested Citation

  • Benjamin Powell & David Skarbek, 2006. "Sweatshops and Third World Living Standards: Are the Jobs Worth the Sweat?," Journal of Labor Research, Transaction Publishers, vol. 27(2), pages 263-274, April.
    • Handle: RePEc:tra:jlabre:v:27:y:2006:i:2:p:263-274
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    Citations

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    Cited by:

    1. Brown, Drusilla & Dehejia, Rajeev & Robertson, Raymond, 2016. "Laws, Costs, Norms, and Learning: Improving Working Conditions in Developing Countries," IZA Discussion Papers 10025, Institute of Labor Economics (IZA).
    2. Anthony J. Evans & Vlad Tarko, 2014. "Contemporary Work in Austrian Economics," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 29(Fall 2014), pages 135-157.
    3. Alejandro Donado, 2021. "Why do they JUST DO IT? A Theory of Outsourcing and Working Conditions," Open Economies Review, Springer, vol. 32(3), pages 559-586, July.
    4. Diana Weinert Thomas & Michael Thomas, 2010. "Encouraging a Productive Research Agenda: Peter Boettke and the Devil's Test," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 26(Fall 2010), pages 103-115.
    5. Boettke, Peter J. & Coyne, Christopher J. & Leeson, Peter T., 2013. "Comparative historical political economy," Journal of Institutional Economics, Cambridge University Press, vol. 9(3), pages 285-301, September.
    6. András Miklós, 2019. "Exploiting Injustice in Mutually Beneficial Market Exchange: The Case of Sweatshop Labor," Journal of Business Ethics, Springer, vol. 156(1), pages 59-69, April.
    7. Grier, Kevin & Mahmood, Towhid & Powell, Benjamin, 2023. "Anti-sweatshop activism and the safety-employment tradeoff: Evidence from Bangladesh's Rana Plaza disaster," Journal of Economic Behavior & Organization, Elsevier, vol. 208(C), pages 174-190.
    8. Chau, Nancy H., 2009. "Sweatshop Equilibrium," IZA Discussion Papers 4363, Institute of Labor Economics (IZA).
    9. Rouge Jean-François, 2016. "Sweet Sweatshops - A Reflexion about the Impact of Sweatshops on Countries’ Competitiveness," Economics, Sciendo, vol. 4(1), pages 7-36, June.
    10. Solomon Stein & Virgil Storr, 2013. "The difficulty of applying the economics of time and ignorance," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 26(1), pages 27-37, March.
    11. J R Clark & Benjamin Powell, 2013. "Sweatshop Working Conditions and Employee Welfare: Say It Ain’t Sew," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 55(2), pages 343-357, June.
    12. Paharia, Neeru & Vohs, Kathleen D. & Deshpandé, Rohit, 2013. "Sweatshop labor is wrong unless the shoes are cute: Cognition can both help and hurt moral motivated reasoning," Organizational Behavior and Human Decision Processes, Elsevier, vol. 121(1), pages 81-88.
    13. Chau, Nancy H., 2016. "On sweatshop jobs and decent work," Journal of Development Economics, Elsevier, vol. 121(C), pages 120-134.
    14. Robertson, Raymond, 2020. "Pioneering a New Approach to Improving Working Conditions in Developing Countries: Better Factories Cambodia," IZA Discussion Papers 13095, Institute of Labor Economics (IZA).
    15. Sandra Kristine Halvorsen, 2021. "Labour turnover and workers' well-being in the Ethiopian manufacturing industry," WIDER Working Paper Series wp-2021-36, World Institute for Development Economic Research (UNU-WIDER).
    16. Benjamin Powell, 2018. "Sweatshop Regulation: Tradeoffs and Welfare Judgements," Journal of Business Ethics, Springer, vol. 151(1), pages 29-36, August.
    17. Benjamin Powell & Matt Zwolinski, 2012. "The Ethical and Economic Case Against Sweatshop Labor: A Critical Assessment," Journal of Business Ethics, Springer, vol. 107(4), pages 449-472, June.

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