Consider this situation: Jack earns AUD3500 a month. He doesn’t go shopping much: let’s say he purchases on average two shirts every month. With each shirt costing around AUD30, spending AUD60, which corresponds to less than 2% of his monthly income, every month on these shirts is far from burning a hole in his pocket. This, 2 shirts a month, is a rather conservative figure, and most of the people I know have the habit of shopping for items they only get to wear once or twice. Let’s face it; if you live in a developed country chances are that you’re spoiled. This is the golden age for the middle class. Consumer items are cheap, so why bother keeping an eye on your consumption anyway?
Globalization is very much our saving grace today. How do you fill the many shelves in our local department store? You source the items from all over the world. By all over the world, we’re talking about many different companies competing with each other to stay relevant. They compete for some space on the store’s shelves. Competitive (read: low) pricing is necessary here. As competition stiffened and the cost of production in the traditionally vibrant manufacturing belts in their home countries became prohibitive, the companies started to take advantage of the huge pool of cheap labor in the Third World countries. Sweatshops mushroomed in South Korea and Taiwan in the 60s, and they are now an inescapable feature in China, Thailand and even the poorer Cambodia and Bangladesh, to name a few. Sweatshops are notorious for the precarious working conditions the workers have to work in; accidents aren’t uncommon and wages are a fraction of that earned by the workers in the West. They are defined by social activists Charles Booth and Sidney and Beatrice WebbÂ as aÂ variety of labour environments all containing these two essential elements: hard or excessive work and contracting.
This leads to many anti-globalization activists to say that the prosperous First World lifestyle consumers in the West are currently enjoying is actually built upon the fact that the rest of the World are actually poor, and with this, easily manipulated. Sweatshops are alleged as a tool of the rich’s manipulation of the poor. Some go to the length of calling it reminiscent to modern-day slavery. Rising wages seen in China and several other countries where many sweatshops have for years thrived however raises a new concern among economists of how the developed world will need to adapt to paying more in the future for what they use. Is our dependence on cheap merchandises produced in these countries sustainable?
Another big question remains: Is using products manufactured at sweatshops morally ethical?
I personally think that it’s okay to do so. It’s perfectly fine to shop at IKEA or wear an Abercrombie & Fitch sweater. While the working conditions at sweatshops are admittedly bad by international standards, a job at one of those establishments is considered anÂ escalator out of poverty, the kind of gauzy if probably unrealistic ambition that parents everywhere often have for their childrenÂ (Kristof, 2009). Just imagine this scenario: failing crops forced a Cambodian peasant out of his land to the city. He has no money, no job, no prospects. Contrary to what is the norm in the developed nations, he receives no doles or welfare benefits from the government, so his daily life is a struggle. His insufficiency revolves around everything basic; food, shelter, clean water. A job at a sweatshop paying USD40 a monthÂ (in 2000 dollar)Â will not only greatly improve his living standards, it is a life-saver. It keeps him away from hunger and the feeling of helplessness. It is also to be noted that USD40 goes a long way in a country like Cambodia. Putting it into PPP (Purchasing Power Parity) term, USD40 in Phnom Penh actually buys USD100 worth of items; as miniscule as it sounds to us, many Cambodians will be very grateful to be paid that much. With some extra cash he can even send his children to school and the cycle of poverty that has been running in the family for many generations will finally end one day as a result.
Historically, industrialized nations went through the sweatshop phase when their modern economic base was still at its infancy. Sweatshops were present in England during the first few decades following the advent of the Industrial Revolution. These establishments also thrived near at New York’s Lower East Side between 1850s to 1900s.
However, the biggest success story of previously sweatshop-dependent economies are to be found in East Asia. South Korea didn’t start up big; they didn’t magically start producing Samsung electronics and Hyundai cars and turn rich overnight. They started small. The country was known in the 60s to produce cheap apparels, shoes and other consumer items. Much of its exports as the country was industrializing rapidly in the 60s and 70s were produced in sweatshops where labor law was nearly nonexistent and wages were low. The Sweatshop belt, which refers to a region spanning from South Korea to Malaysia, Indonesia and Bangladesh, is today one of the most economically vibrant regions in the world. The Asian tigers and tiger cubs have had years of solid economic growth- their GDP per capita doubled every 10 years. These countries have benefited from years of fast industrialization backed by a relatively lax labor law, low wages and export-led growth. As the society became more industrialized and the people became more educated these economies drifted further from the sweatshop economy and started to foray into heavy industry and higher value-added sectors. South Korea and Taiwan are no longer known for their sweatshops today. They are instead known for their high-quality products and their high standard of living; an average worker in South KoreaÂ earns more than his friend in Spain does, with a much lower unemployment rate than the rest of the industrialized world.
With the success of the Asian economies, it should make more sense now to the international community that trade and industrialization are actually better means of bettering a country’s fortune than Live Aid. Sub-Saharan Africa, which has been receiving aids from the rest of the world for many decades might actually be better off if the donor countries were to focus on building factories and training the local people instead. After all, both parties will benefit from this: the producers will be able to produce things cheaply, and the locals can finally enjoy a quantum leap in their standard of living. This should actually be the next agenda of any aid agencies of the world: to replicate the success of a labor intensive industries in Asia in Africa.
So, if you have any qualms about buying one of those cheap ‘Made in Bangladesh’ sweatshirts at Big W out of fear of supporting something so ethically incorrect, feel bad no more. By buying goods from the developing countries, you are not only helping the workers sustain their living, you are also helping a poor country make its first few baby steps towards a better economic future.
Rather than plaguing-up the economies, sweatshops actually help build-up economies.