Friday, January 16, 2009

Sweatshops FTW

Kristof at the NY Times has just written a column and a follow-up post about sweatshops. His argument is that while sweatshops are distasteful, they're better than what many are forced to do for a living (eg. scavenging in garbage dumps), and they help lead a country to higher wages and productivity. Sweatshops are a necessary evil.

This issue is to me emblematic of my disillusionment with some of the left's orthodoxy. Obviously anti-sweatshop campaigners have their hearts in the right place - no one should have to work painful, humiliating, dangerous and low-paid jobs. Wishing it so however isn't enough. Boycotting products from sweatshops just contributes to keeping people in poverty.

This is one reason economists get a little frustrated when people argue trade deals should be accompanied by labor regulations. These are effectively protectionist measures that prevent the greatest benefits of trade to reach the world's poor. (They also, incidentally, hurt us in rich countries - trade is one of those nice realms where everyone can benefit.)

Kristof's NY Times video:

(I'm somehow disappointed with Kristof's voice - does that make sense?)


  1. Good post! I agree with you on boycotts, but I'm not sure I see why attaching labour rules to trade deals keeps companies from setting up shop in the poorest countries. Would basic labour standards, such as safety and human rights, take away their competitive advantage: cheap labour?

  2. While the cost may seem minimal to us, maintaining labour standards (and perhaps more importantly monitoring them) are important in relative terms. If you're hiring cheap factory labour for the equivalent of $1 an hour, maintaining safety codes or setting maximum weekly working hours could easily increase those costs by 50%. While $1.50 seems cheap to us, labour in poor countries is not very productive. They don't have capital, infrastructure, shipping is often expensive, workers are uneducated, etc.

    I'm about to do a follow-up post to illustrate this.

  3. this article is getting a lot of play. andrew sullivan, matt yglesias, oh, and the folks at jeune street and ovularity are all posting on it.

    btw, i love that you guys comment on each other's posts -- very adorable!