What are the Arguments for Sweatshops?

The ethical and Economic case against Sweatshop

Labor: a critical assessment

2012

This paper goes through the arguments against sweatshops and dismantles them. A key part of its arguments revolves around the lack of other alternative and therefore the mutually beneficial nature of these enterprises and the relatively low cases of moral impropriety.

In its final remarks, the idea that “no economic mechanisms have been identified which would allow higher wages or better working conditions” that would not also harm the worker. This neatly summaries how sweatshops are the best alternatives that people have (as long as they are voluntary). The economic and social situation is already dire in these countries that have sweatshops, and which is in fact due to lack of provisions of government or other powers. Regardless, the MNE (multinational enterprises) that sub-contract them are not to blame and clearly are providing a mutually beneficial exchange between both parties.

The broader point that is then tackled is how even offering someone an unfair deal is better than the alternative can be moral. In this example, A proposes B an unfair marriage agreement, we intuitively feel that it is morally objectionable. However, a brilliant point made is that our intuitions are not informed of the alternatives to this marriage. It is up to anti-sweatshop critics to prove why our intuitions ought to see this as immoral and also to justify their paternalistic interference with this proposal (which as of yet has not been done).

A further exploration of the mutually beneficial nature of sweatshops is seen in this commonly used example. If A is drowning, and B offers to save them but only for £10,000, it feels intuitively wrong. However, the reason this cannot be applied to sweatshops is that MNE have deliberately come to a country seeking to hire workers, so the analogy would be more like B deliberately and at great expense being in the right place to save people like A. additionally, a more complex look at the price that companies are willing to pay and workers are willing to work shows that it is better that workers are payed less well than not well at all. Companies should not need to take responsibility for the economic state of the country that allowed such wages to be payed.

The exploitation of MNE’s is also clearly not that lucrative as the profits that they deliver are fairly in line with other industries, and they have many other costs other than workers to manage.

They also show how threats of co-coercion are agreed on both sides to be wrong. The idea also that “rational compulsion” (“when an agent is forced to choose between two actions one of which is plainly superior.”) is not inherently wrong as shown by the idea that offering someone 1 million for their car is beneficial to them despite them essentially being forced to taking you up on an obviously good offer.

Overall, having dismantled some of sweatshops critics, they in fact seem to benefit and help all parties involved and the resultant higher employment leads to far greater welfare.

Note; also talked about future generations and the benefits that they will receive.

Mathew Coakley and Michael Kates

The Ethical and Economic case for Sweatshop Regulation

2013

This paper is based as a response to the previous one, and the crux of its argument is that employment alone is not a measure of whether certain economic policies increase welfare or not. Instead it advocates for regulation such as minimum wages and decreasing working hours to increase overall welfare and local economies.

The first point is how minimum wages would in fact increase welfare by increasing the spending power of those workers that receive the rise, succeeded by other benefits. It looks at some of the research at the extent to which a 50% rise on worker wages would have on the retail cost for consumers and thus the overall sales. It argues that the numbers are so small that it would only increase the cost of a product (on average) by a few percent, meaning that the impact of the consumers would be minimal but the impact for workers would be great.

It is a brilliant system of wealth distribution from the global wealthy to the global poor. Though the authors agree that it may lead in a decrease in number of people employed, those that continued to be would be able to have a better standard of living and also spend and stimulate more in local economies, further increasing wealth.

The second point is how regulating the number of hours worked could increase number of people improved. Instead of having 100 people working 16 hours a day, you could have 200 working 8 hours, which would increase overall employment. Whether these measures would increase welfare is another matter, but the concept of giving more people more work is one that clearly could be beneficial through regulation.

The essay concludes on the idea that in fact contrary to the previous paper, regulation can bring about greater overall welfare and that looking at employment alone as a means of measurement is not enough.

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