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Can sweatshops improve lives and economic growth?

September 16, 2010

Flickr / lovstromp

Benjamin Powell, a Stafford University professor of economics, thinks so!

In his book No Sweat: How Sweatshops Improve Lives and Economic Growth he argues that we should rejoice when we buy apparel made in sweatshops because it creates jobs and provides a living for people in poorer countries. He states that sweatshop workers usually earn at least the national average and therefore make a good living that should be supported by our consumption.

But Powell is “arguing in support of the lesser evil.” The other piece of the puzzle that Powell seems to ignore is that the same companies that are using sweatshops could continue to invest in developing economies, bring jobs to the same nations, and improve economic welfare, while at the same time refusing to support sweatshops conditions.

The fact is, whether or not workers earn a decent wage, the human rights of sweatshop workers are consistently violated, making Powell’s argument hard to swallow. Many factories workers suffer forced overtime, terrible factory conditions and often receive less than they were promised, in salary or food. In some case children are exploited and are not able to receive an education as a result.

At Reeve Consulting, we believe lives can be improved and economies can grow by engaging with suppliers and manufacturers to improve labour conditions in production facilities. Addressing ethics in supply chains does not mean closing down factories and laying off staff; it means working to improve the lives of factory workers, increasing profits for factory owners, and stimulating economic growth.

Whatever the potential economic arguments for sweatshops may be, one should not forget that “an economy” is a human construct and is therefore interconnected to human wellbeing. Some sweatshops may pay decent wages (relatively speaking) in some or even many cases, but a factory where staff are sick and tired is not a place where lives can be improved and profits can be maximized.

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