benjamin powell director, free market institute texas tech university and senior fellow independent...

Benjamin PowellDirector, Free Market Institute

Texas Tech Universityand

Senior Fellow Independent Institute

Sweatshop Working Conditions

• Low Pay (by Western Standards)

• Long Hours• Health and Safety

Risk• Poor Conditions

• NOT: Forced Labor

http://www3.mcps.k12.md.us/clipart/jpeg/IndiaLarge/sweatshop_mumbai.jpeg

Anti-Sweatshop Movement

• AFL-CIO, Unite, USAS, NLC, ILO, Celebs • Minimum (Living) Wage, Improved Safety and

Working Conditions, Unionization, Enforced Labor Laws, No Child Labor.

• “Everybody wants to have a living wage. Everybody wants to be able to take care of themselves and their family. Everybody wants to retire and feel good, enjoy life. Breathe. Live. Eat. You know, the regular shit. We’re not asking for nothing extra special.” Sheri Davis, Ohio State.

Wage Determination

• Upper Bound– About 85% of Cross Country Variation

• Lower Bound

• Can’t it just come out of “huge” profits?

Table 1: Sweatshop Wages Reported in the PressCountry Year Company Reported Wage Per

Bangladesh 2010 $23.52 monthBangladesh 2010 $30.89 month

Bangladesh 2010 $31.24 month

Bangladesh 2009 $3.50 weekBangladesh 2009 $0.06 hour

Bangladesh 2008 $0.10 hour




Bangladesh 2004 Mary Kate & Ashley $0.18 hour

Bangladesh 2004 H&M $0.07 hourBangladesh 2004 Mary Kate & Ashley $0.08 hour


Brazil 2007 $170.00 month

Brazil 2004 $65.00 month

Burma 2004 NBA $0.14 hour

Burma 2004 NBA $0.07 hour

Cambodia 2004 $2.00 day

China 2007 Apple, Compaq, Nokia, Sony $50.00 monthChina 2006 Apple $50.00 month

China 2005 Disney $0.32 hour

China 2005 $120.70 monthChina 2005 Make Poverty History Campaign $0.17 hour

China 2005 $0.69 hour

China 2004 NFL, NBA, MLB $0.17 hour

China 2004 NBA $0.16 hourChina 2004 $1.00 day






China 1997 Nike $1.75 day

China 1997 $16.00 monthChina 1996 $25.00 month

Costa Rica 1998 Rawlings Baseball $1.12 hour

Dominican Republic 2008 $7.29 day

Dominican Republic 2000 $0.69 hour

El Salvador 2001 Gap $0.55 hour

El Salvador 2001 Gap $0.60 hour

El Salvador 2001 Gap $30.00 weekHaiti 2010 $14.39 week

Haiti 2004 $0.55 hour

Haiti 1996 Disney $0.28 hourHonduras 1996 Levi's and Nike $5.40 day

Honduras 1995 $0.30 hour

Honduras 2003 P Diddy $0.75 hour

Honduras 1996 Wal-Mart/Kathie Lee $0.31 hour

India 2010 $0.41 hourIndia 2010 $130.54 month

India 2010 $107.00 month


India 2008 $0.32 hour

India 2008 $0.40 hour

India 2008 Banana Republic $0.30 hour

India 2007 $34.16 monthIndia 2007 $2.47 day

India 2007 $2.41 day


Indonesia 2004 H&M $1.00 day

Indonesia 2004 Adidas, Jansport $110.19 month

Indonesia 2004 Nike $2.00 day

Indonesia 2002 Nike $0.27 hour

Indonesia 1997 Nike $2.46 dayIndonesia 1996 Nike $2.28 dayIndonesia 1996 $117.00 month

Indonesia 1996 Nike $115.00 month




Laos 2010 $1.60 dayMauritius 2007 Topshop (Designer Kate Moss) $8.02 day

Mauritius 2007 $0.62 hour

Nicaragua 2004 Talbots, JC Penney, Eddie Bauer, Kmart $0.50 hour

Nicaragua 2001 $135.50 week

Nicaragua 2000 Kohl's dept. stores $3.00 day

Nicaragua 2000 $0.17 hour

Nicaragua 2000 $0.19 hourNicaragua 2000 $0.20 hourSouth Africa 2010 $11.10 week

South Africa 2010 $14.39 week

Thailand 2006 $2.00 day

Vietnam 2004 NBA $0.15 hour

Vietnam 2000 Nike $564.00 year

Vietnam 1997 Nike $1.60 day

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

Figure 2. Percent of Population Living on Less than $1.25 and $2 Per Day (PPP)

$1.25 Per Day

$2 Per Day

$0.00$2.00$4.00$6.00$8.00

$10.00$12.00$14.00$16.00$18.00$20.00

Figure 3. Average Sweatshop Earnings Per Day (PPP)

0.00%

50.00%

100.00%

150.00%

200.00%

250.00%

300.00% Figure 4. Average Sweatshop Earnings as a Percent of Average Incomes

40 Hours

50 Hours

60 Hours

70 Hours

Working Conditions

• Mix of Compensation

Sam Bridge and Nicotex

• Inadequate Pay• Long Hours• Poor Working

Conditions• Lack of Mandated

Health Insurance• Lack of Mandated

Vacation Time• Verbal Abuse

Survey of Guatemalan Sweatshops

Table 2. Desirability of the Mix of Compensation

Are You Willing to Work for Lower Pay if Your Employer: Yes No Yes No Yes No

Reduced the number of hours you have to work 17.1% 82.9% 2.9% 97.1% 10.0% 90.0%

Made your hours more predictable 14.3% 85.7% 2.9% 97.1% 8.6% 91.4%

Gave you more bathroom breaks 2.9% 97.1% 2.9% 97.1% 2.9% 97.1%

Gave you longer lunch breaks 5.7% 94.3% 2.9% 97.1% 4.3% 95.7%

Made your working conditions more pleasant 17.1% 82.9% 0.0% 100.0% 8.6% 91.4%

Made your working conditions safer 5.7% 94.3% 2.9% 97.1% 4.3% 95.7%

Provided health insurance 20.0% 80.0% 8.6% 91.4% 14.3% 85.7%

Gave you paid vacation 31.4% 68.6% 5.7% 94.3% 18.6% 81.4%

Treated you more fairly 20.0% 80.0% 0.0% 100.0% 10.0% 90.0%

Reduced the risk of sexual harassment 0.0% 100.0% 0.0% 100.0% 0.0% 100.0%

Nicotex Sam Bridge Total

Save the Children?

• Why Children Work

• 1993 Child Labor Deterrence Act– Oxfam

Where Children Work

62.1

55.1

79.2

40.3

18.5

50.5

62.5

71.3

66.4

23.3

34.1

15.4

49.0

57.5

35.3

24.9

12.0

25.8

12.7

8.2

4.6

9.5 9.812.9

9.4

14.2

7.3

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

Bangladesh Brazil Cambodia Costa Rica Dominican Republic

El Salvador Honduras India Nicaragua

Figure 1. Percent of Economically Active Children Employed by Sector

Agriculture

Services

Manufacturing

Cure for Child LaborFigure 2. Percent of Children Age 10-14 in Labor Force by Country Income Quintile

0.01% 0.16%

4.58%

7.35%

31.04%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

Richest 2nd 3rd 4th Poorest

What About Labor Laws?Table 1: U.S. Income & Labor Standards Compared to Sweatshop Countries

Date of U.S. U.S. GDP/Capita # Year Until Avg. SweatshopLabor Standard Adoption Introduced Country Reaches U.S. Income

Level at Time of AdoptionCollective Bargaining 1935 $9,123 29Child Labor 1938 $10,223 35Minimum Wage 1938 $10,223 35Occup. Safety & Health 1970 $25,081 80Unemploment Insurance 1935 $9,123 29Equality of Opportunity 1964 $21,314 72Working Time 1940 $11,698 42Maternity Leave 1993 $39,176 102Source: Hall and Leeson 2007.

The Process of Development

• Sweatshops Not New• Proximate Causes

– Capital– Technology– Human Capital

• Process in Great Britain and U.S.• Sweatshop Countries in 1950

What Good Can Activists Do?

What Good Can Activists Do

• Branding?• Free Trade• Immigration• Institutional Reform

• Do No Harm

www.fmi.ttu.edu

benjamin powell director, free market institute texas tech university and senior fellow independent...

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compensation slide

harm slide

child labor slide

labor laws

conditions low pay

safety risk poor conditions

sweatshop countries

celebs minimum living