Sweatshops and third world living standards: are the jobs worth the sweat?

This paper agrees that multinational countries pay more than domestic firms in developing countries, but questions the widely accepted assumption that domestic sweatshops are necessarily exploitative. The authors compare apparel industry wages and the wages of individual firms accused of being sweatshops to measures of the standard of living in developing economies. They find that most sweatshop jobs provide an above average standard of living for their workers.

Key points are:

• apparel industry wages are low by U.S. standards, but they compare favorably with the average standard of living in most developing countries
• according to their study, In nine out of ten nations, average apparel industry income exceeds the national average at only 50 hours per week. Apparel workers in the Dominican Republic, Haiti, Honduras, and Nicaragua earn three to seven times the national average
• consequently sweatshop wages raise workers' standard of living higher than a significant fraction of the population
• the authors concede that some caution should be used when looking at the data for China. A few articles reported that the Chinese government "forced" people to work in sweatshops. If this is true, they concede that we cannot assume that the jobs make the workers better off.

The paper concludes that, despite data limitations, individual firms accused of paying sweatshop wages often still compare favourably with other standard of living measures.