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Moving Up or Moving Out? Anti-Sweatshop Activists and Labor Market Outcomes


  • Ann Harrison
  • Jason Scorse


During the 1990s, human rights and anti-sweatshop activists increased their efforts to improve working conditions and raise wages for workers in developing countries. These campaigns took many different forms: direct pressure to change legislation in developing countries, pressure on firms, newspaper campaigns, and grassroots organizing. This paper analyzes the impact of two different types of interventions on labor market outcomes in Indonesian manufacturing: (1) direct US government pressure, which contributed to a doubling of the minimum wage and (2) anti-sweatshop campaigns. The combined effects of the minimum wage legislation and the anti-sweatshop campaigns led to a 50 percent increase in real wages and a 100 percent increase in nominal wages for unskilled workers at targeted plants. We then examine whether higher wages led firms to cut employment or relocate elsewhere. Although the higher minimum wage reduced employment for unskilled workers, anti-sweatshop activism targeted at textiles, apparel, and footwear plants did not. Plants targeted by activists were more likely to close, but those losses were offset by employment gains at surviving plants. The message is a mixed one: activism significantly improved wages for unskilled workers in sweatshop industries, but probably encouraged some plants to leave Indonesia.

Suggested Citation

  • Ann Harrison & Jason Scorse, 2004. "Moving Up or Moving Out? Anti-Sweatshop Activists and Labor Market Outcomes," NBER Working Papers 10492, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:10492
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    References listed on IDEAS

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    Cited by:

    1. David Neumark & William Wascher, 2006. "Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research," NBER Working Papers 12663, National Bureau of Economic Research, Inc.
    2. Hyejin Ku, 2014. "Fair Trade in the Fields of Florida: The Impact of the Penny-Per-Pound on Tomato Pickers," CReAM Discussion Paper Series 1416, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    3. repec:ilo:ilowps:374997 is not listed on IDEAS
    4. Pinelopi K. Goldberg & Nina Pavcnik, 2004. "Trade, Inequality, and Poverty: What Do We Know? Evidence from Recent Trade Liberalization Episodes in Developing Countries," NBER Working Papers 10593, National Bureau of Economic Research, Inc.
    5. S. Sethi & Emre Veral & H. Shapiro & Olga Emelianova, 2011. "Mattel, Inc.: Global Manufacturing Principles (GMP) – A Life-Cycle Analysis of a Company-Based Code of Conduct in the Toy Industry," Journal of Business Ethics, Springer, vol. 99(4), pages 483-517, April.
    6. Bird, Kelly & Manning, Chris, 2008. "Minimum Wages and Poverty in a Developing Country: Simulations from Indonesia's Household Survey," World Development, Elsevier, vol. 36(5), pages 916-933, May.
    7. Pinelopi Koujianou Goldberg & Nina Pavcnik, 2007. "Distributional Effects of Globalization in Developing Countries," Journal of Economic Literature, American Economic Association, vol. 45(1), pages 39-82, March.
    8. repec:ilo:ilowps:374452 is not listed on IDEAS
    9. Ann Harrison, 2007. "Globalization and Poverty: An Introduction," NBER Chapters,in: Globalization and Poverty, pages 1-32 National Bureau of Economic Research, Inc.
    10. Michael Clemens & Claudio Montenegro & Lant Pritchett, 2008. "The Place Premium: Wage Differences for Identical Workers across the U.S. Border," Working Papers 148, Center for Global Development.
    11. Nguyen, Cuong, 2009. "Do Minimum Wage Increases Matter to Profitability of Private Firm? The Case of Vietnam," MPRA Paper 48655, University Library of Munich, Germany.
    12. Kyvik Nord°as, Hildegunn., 2005. "Labour implications of the textiles and clothing quota phase-out," ILO Working Papers 993744523402676, International Labour Organization.
    13. Richard B. Freeman, 2013. "One Ring to Rule Them All? Globalization of Knowledge and Knowledge Creation," NBER Working Papers 19301, National Bureau of Economic Research, Inc.
    14. Drusilla K. Brown & Thomas Downes & Karen Eggleston & Ratna Kumari, 2006. "Human Resource Management Technology Diffusion Through Global Supply Chains: Productivity and Workplace Based Health Care," Discussion Papers Series, Department of Economics, Tufts University 0616, Department of Economics, Tufts University.
    15. Nguyen Viet, Cuong, 2010. "The Impact of a Minimum Wage Increase on Employment, Wages and Expenditures of Low-Wage Workers in Vietnam," MPRA Paper 36751, University Library of Munich, Germany, revised 15 Aug 2011.

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    JEL classification:

    • F1 - International Economics - - Trade
    • F2 - International Economics - - International Factor Movements and International Business

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