Abstract
This study surveys workers at two firms accused of being sweatshops by the National Labor Committee. We find that the wages and working conditions are superior to the workers’ prior employment. The mix of compensation between wages and working conditions reflects employee preferences and employees found their conditions less satisfactory when a firm capitulated to activist demands.
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Notes
For scholarly articles making these claims, see Arnold and Bowie (2003, 2007), Arnold and Hartman (2005, 2006), Arnold (2010), and Miller (2003). Anti-sweatshop activists also often make these claims. See the websites of the National Labor Committee, United Students Against Sweatshop Labor, and UNITE for examples. Powell (forthcoming) surveys the claims and demands of the anti-sweatshop groups in Chapter 2.
See Zwolinski (2007) for an article that counters the philosophical arguments made by some of these scholars.
Powell (forthcoming) expands that study to cover more recent years and a total of 85 sweatshops in 18 countries. He also offers a more comprehensive examination of the economics of sweatshops.
A fifth firm, Legumex, was also identified by the NLC. We did not include Legumex in our study because it is an agro-industrial plant rather than an apparel producer. The vast majority of the debate around sweatshops has focused on the apparel industry, and virtually none of the debate has included firms in the agricultural sector.
It was originally named Sam Lucas and again recently changed its name to SAM SOL but ownership has remained the same.
Surveys were completed over a period of three days from 19 May to 22 May.
Aragón y Associatesis headquartered in Guatemala City. Founded in 1972 they have conducted more than 5,000 research studies that have analyzed or gathered the opinions of more than 2.5 million people across Central America, the Caribbean, and South America.
This is a larger sample than prior published surveys of sweatshop workers (Esbenshade, 2004; Skarbek et al., 2011).
Excluding the six employees who worked in some form of supervisory role does not significantly change any of our results.
The exceptions were that all of our supervisory workers and most packers worked for Sam Bridge while most inspectors and pressers worked for Nicotex.
We did not find significant differences in improvement between our whole sample and just those who had voluntarily left their prior employment in either the wages or number of hours worked.
A finding that is consistent with many examples found in Powell and Skarbek (2006).
See Hall and Leeson (2007) for more on the dire consequences that would likely result from imposing more stringent working conditions standards on poorer countries. They compare the level of development of many countries where sweatshops are located today with the level of development the United States had achieved when they adopted similar standards and find that many of these countries are years away from reaching a similar level of development.
We followed up these surveys by visiting Sam Bridge and meeting with the owner/director, Myung Chul Kim, 27 April 2011. We asked him if he would be willing to give paid vacation if the workers were willing to accept less in wages. He replied ‘People need money, not vacations. Guatemala is very poor’. When asked about shortening the hours his employees worked he responded that the workers desired the hours but that he would like to avoid paying overtime because it costs him more money but he has to use overtime because of the late penalty clauses attached to US orders. When asked directly if he cared whether he paid a worker the equivalent of $4 an hour in wages or whether he paid $3 in wages in $1 in other benefits, not surprisingly, he answered that it did not matter to him.
Although not the main focus of their study, Harrison and Scorse (2010) report that non-wage benefits were not decreased in Indonesian firms when wages were increased in response to minimum wage laws and activist pressure. However, they include a single variable for all non-wage benefits and they never say what this measure is comprised of or how it might aggregate all possible non-wage working conditions. They did find that mandated minimum wage increases led to large decreases in employment.
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Acknowledgements
We thank David Skarbek, the editor, and an anonymous referee for comments on a previous draft, Nicolas Cachanosky for valuable research assistance and translation services, Giancarlo Ibarguen and Carla Castillo de Hess for helping to arrange the surveys and Edgar Rene Ortiz Romero for assistance with factory site visits.
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Clark, J., Powell, B. Sweatshop Working Conditions and Employee Welfare: Say It Ain’t Sew. Comp Econ Stud 55, 343–357 (2013). https://doi.org/10.1057/ces.2012.38
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DOI: https://doi.org/10.1057/ces.2012.38