Sweatshop is a term often used to describe a manufacturing facility that is physically or mentally abusive, or that crowds, confines, or compels workers, or forces them to work long and unreasonable hours, commonly placed in comparison with slave labor. There exists a fierce debate over the use of factories that have come to be known as sweatshops, especially in relation to globalization. Proponents of free trade claim such factories benefit the citizens of developing nations who would otherwise have no legal employment opportunities. Opponents claim inhumane treatment of workers and abhorrent working conditions.
Whether sweatshops are ultimately considered a step on the way to improving the opportunities, and standard of living, of those otherwise facing poverty, or an obstacle to that same goal, the resolution is the same—sweatshops should be temporary. The standard of working conditions for all should reach an acceptable level, but the process by which this is achieved must also take into account the real situation of the workers.
While many workplaces in history may have been relatively crowded, dangerous, low-paying, and without job security, the concept of a sweatshop has its origins between 1830 and 1850 as a specific type of workshop in which a certain type of middleman, the "sweater," directed others in garment making (the process of producing clothing), under arduous conditions.
The terms "sweater" for the middleman and "sweating system" for the process of subcontracting piece work were used in early critiques like Charles Kingsley's Cheap Clothes and Nasty written in 1850. The workplaces created for the sweating system were called "sweatshops," and variously comprised workplaces of only a few workers up to as many as a hundred or more.
Prior to 1830, fine clothing had been an expensive, custom item produced primarily by male members of the organized tailors' guild. But between 1830 and 1850, as the Industrial Revolution gave way to the Second Industrial Revolution, sweatshop production of inexpensive clothing displaced members of the tailors' guild, and replaced them with lower-skilled workers performing piece work at lower wages and in inferior conditions. The trend away from tailors was accelerated by the advent of a practical, foot-powered sewing machine in 1846.
In the sweatshop of 1850, the role of the sweater as middleman and subcontractor (or sub-subcontractor) was considered key, because he served to keep workers isolated in small workshops. This isolation made workers unsure of their supply of work and unable to organize against their true employer through collective bargaining. Instead, tailors or other clothing retailers would subcontract tasks to the sweater, who in turn might subcontract to another sweater, who would ultimately engage workers at a piece rate for each article of clothing or seam produced. Many critics asserted that the middleman made his profit by finding the most desperate workers, often women and children, who could be paid an absolute minimum. While workers who produced many pieces could earn more, less productive workers earned so little that critics termed their pay "starvation wages." Employment was risky because sweatshop workers that became injured or sick would be quickly replaced by others.
Between 1850 and 1900, sweatshops attracted the rural poor to rapidly-growing cities, and attracted immigrants to places like East London, in England and New York City's garment district, located near the tenements of New York's Lower East Side. Wherever they were located, sweatshops also attracted critics and labor leaders who cited them as crowded, poorly ventilated, and prone to fires and rat infestations, since much of the work was done by many people crowded into small tenement rooms.
In 1900, the International Ladies' Garment Workers' Union was founded in an effort to improve the condition of these workers.
Criticism of garment sweatshops became a major force behind workplace safety regulation and labor laws. As some journalists strove to change working conditions, the term "sweatshop" came to describe a broader set of workplaces whose conditions were considered inferior. In the United States, investigative journalists, known as Muckrakers, wrote exposés of business practices, and progressive politicians campaigned for new laws. Notable exposés of sweatshop conditions include Jacob Riis' photo documentary How the Other Half Lives (1914) and Upton Sinclair's 1906 novel, The Jungle, about the meat packing industry.
In 1911, negative public perceptions of sweatshops were galvanized by the Triangle Shirtwaist Factory Fire in New York City. The pivotal role of this time and place is chronicled at the Lower East Side Tenement Museum, part of the Lower East Side Tenement National Historic Site.
While trade unions, minimum wage laws, fire safety codes, and labor laws have made sweatshops (in the original sense) rarer in the developed world, they did not eliminate them, and the term came to be increasingly associated with factories in the developing world.
Jeffrey Sachs, an economist and adviser to developing nations has said, "My concern is not that there are too many sweatshops, but that there are too few." Sachs and other proponents of sweatshops cite the economic theory of comparative advantage, which states that international trade will, in the long run, make most parties better off. The theory holds that developing countries improve their condition by doing something that they do "better" than industrialized nations (in this case, they charge less but do the same work). Developed countries will also be better off because their workers can shift to jobs that they do better. These are jobs that some economists say usually entail a level of education and training that is exceptionally difficult to obtain in the developing world. Thus, economists like Sachs say developing countries have factories and jobs that they would not otherwise have had. Developed countries are better off because of the decreased cost of producing various goods drives down prices at home. Also, developed countries can specialize in the areas in which they do best.
When asked about the working condition in sweatshops, proponents say that although wages and working conditions may appear inferior by the standards of developed nations, they are actually improvements over what people in developing countries had before. If jobs in such factories did not improve their workers' standard of living, those workers would not have taken the jobs when they appeared. It is also often pointed out that, unlike in the industrialized world, sweatshops are not replacing high-paying jobs. Rather, sweatshops offer an improvement over subsistence farming and other back-breaking tasks, or even prostitution, trash-picking, or no work at all. This is the case since most under-developed countries have weak labor markets and little (if any) economic growth. They also often lack sufficient infrastructure, education, and unemployment insurance. Thus, absence of the work opportunities provided by sweatshops can quickly lead to poverty with accompanying malnourishment and even starvation.
Wages in sweatshops are clearly below nominal wage rates in other countries. For example, in 2003, Honduran factory workers were paid 15 cents to make a brand name t-shirt that cost its U.S. bulk importer $3.65 and sold at retail for 40 dollars. Critics have pointed out that the irony of sweatshops is that the workers do not earn enough money to buy the products that they make, even though such items are often commonplace goods such as t-shirts, shoes, and toys. However, defenders of such practices respond that critics of sweatshops are comparing wages paid in one country to prices set in another. Although the wages paid to workers in Honduras would hardly be enough to live in the United States, it could very well be enough to live in Honduras, where prices are much lower. For example, the 15 cents that the Honduran worker might be paid to produce a shirt, is comparable, in terms of purchasing power, to three dollars in the United States.
Johan Norberg, a proponent of market economics, points out the irony in sweatshop critics: "'Look, you are too poor to trade with us. And that means that we won't trade with you. We won't buy your goods until you're as rich as we are.' That's totally backwards. These countries won't get rich without being able to export goods."
Defenders of sweatshops also cite a 1997 UNICEF study to show that any alternatives to such labor are far worse. The study estimated that five to seven thousand Nepalese children turned to prostitution after the US banned that country's carpet exports in the 1990s, and that after the Child Labor Deterrence Act was introduced in the US, an estimated fifty thousand children were dismissed from their garment industry jobs in Bangladesh, leaving many to resort to jobs such as "stone-crushing, street hustling, and prostitution." The UNICEF study found these alternative jobs to be "more hazardous and exploitative than garment production."
Some of the earliest sweatshop critics were found in the nineteenth century abolitionist movement that had originally coalesced in opposition to chattel slavery, as many abolitionists saw similarities between slavery and sweatshop work. As slavery was successively outlawed in industrial countries between 1794 (in France) and 1865 (in the United States), some abolitionists sought to broaden the anti-slavery consensus to include other forms of harsh labor, including sweatshops. The first significant law to address sweatshops (the Factory Act of 1833) was passed in the United Kingdom at about the same time that slavery was outlawed there (1834), and the anti-sweatshop movement drew from much the same reservoir of supporters and social thinkers. Similarly, once the United States had ended slavery during the American Civil War, the reconstruction period saw social reformers turning their attention to the plight of the urban workforce.
For those groups that remained focused on slavery per se, sweatshops became one of the primary objects of controversy. Workplaces across multiple sectors of the economy were categorized as "sweatshops."
In the United Kingdom, the Factory Act was revised six further times between 1844 and 1878 to help improve the condition of workers by limiting work hours and the use of child labor. The formation of the International Labor Organization in 1919 under the League of Nations and later under the United Nations sought to address the plight of workers the world over. Concern over working conditions as described by muckraker journalists during the Progressive Era in the United States saw the passage of new workers rights laws and ultimately resulted in the Fair Labor Standards Act of 1938, passed during the New Deal.
The anti-globalization movement has risen in opposition to corporate globalization, a process by which multinational corporations move their operations overseas in order to lower their costs and increase profits. The anti-sweatshop movement has much in common with the anti-globalization movement. Both consider sweatshops harmful, and both have accused many major companies of using sweatshops. The movement charges that neoliberal globalization is similar to the sweating system. They assert that outsourcing and subcontracting of manufacturing has made abuses of sweatshop workers more likely, and that the companies show the same disregard that was shown by past clothing retailers. Furthermore, they argue that there tends to be a "race to the bottom," as multinationals leap from one low-wage country to another searching for lower production costs, in the same way that "sweaters" would have steered production to the lowest cost sub-contractor.
Anti-globalization activists and environmentalists also deplore transfer of heavy industrial manufacturing (such as chemical production) to the developing world. Although chemical factories have little in common with sweatshops in the original sense, detractors describe them as such and claim that they have negative environmental and health impacts (such as pollution and birth defects) on workers and the local community.
Various groups support or embody the anti-sweatshop movement. The National Labor Committee brought sweatshops into the mainstream media in the 1990s when it exposed the use of sweatshop and child labor to sew Kathie Lee Gifford's Wal-Mart label. United Students Against Sweatshops is active on college campuses. The International Labor Rights Fund filed a lawsuit  on behalf of workers in China, Nicaragua, Swaziland, Indonesia, and Bangladesh against Wal-Mart, charging the company with knowingly developing purchasing policies particularly relating to price and delivery time that are impossible to meet while following the Wal-Mart code of conduct. Labor unions, such as the AFL-CIO, have helped support the anti-sweatshop movement out of concern both for the welfare of people in the developing world and that companies will move jobs from the United States elsewhere in order to capitalize on lower costs. The only garment production facilities that remain in the US are small, disconnected workplaces.
Arguments that suggest that sweatshops provide skills and a boost to the economy are sometimes criticized for not taking into account the gendered nature of sweatshop employees. The vast majority of workers in sweatshops are young women and, as a result, the negative aspects of sweatshops have a disproportionate impact on women. Although company-led attempts to improve the working conditions in sweatshops, such as the Ethical Trading Initiative (ETI), have had some successes, they have also been accused of being "gender-blind," that is not recognizing the needs of the majority of the workers—the women. Successful improvement of the conditions of these workers demands a clear understanding of the issues facing them.
Because of the relatively higher value placed on male education, young women are often encouraged by their families to leave school and migrate to urban areas or Export Processing Zones (EPZ) to obtain employment. As outsiders in a new community, these young women lack the legal or family support they might receive in their own community and therefore have to spend a larger amount of income on supporting themselves. Consequently, these young women who are no longer receiving an education often find it hard to earn enough money to send back to their family.
In a report issued in 1994, the United States Government Accountability Office found that there were still thousands of sweatshops in the United States, using a definition of a "sweatshop" as any "employer that violates more than one federal or state labor law governing minimum wage and overtime, child labor, industrial homework, occupational safety and health, workers’ compensation, or industry registration." This definition eliminates any historical distinction about the role of a middleman or the items produced, and focuses on the legal standards of developed country workplaces. An area of controversy between supporters of outsourcing production to the Third World and the anti-sweatshop movement is whether such standards can or should be applied to the workplaces of the developing world.
Sweatshops have been implicated in human trafficking, when workers have been tricked into starting work without informed consent, or when workers are kept at work through debt bondage or mental duress, all of which are more likely in cases where the workforce is drawn from children or the uneducated rural poor. Because they often exist in places without effective workplace safety or environmental laws, sweatshops sometimes injure their workers or the environment at greater rates than would be acceptable in developed countries.
Some companies have acceded to public pressure to reduce or end their use of sweatshops. Such firms often publicize the fact that their products are not made with sweatshop labor; a number of organizations publish lists of companies that pay their workers a living wage. In the United States, several clothing companies have changed their policies after intense pressure from campus anti-sweatshop groups, including the development of a Code of Vendor Conduct based on internationally accepted labor standards.
Sweatshops have proved a difficult issue to resolve because their roots lie in the conceptual foundations of the world economy. Developing countries like India, China, Vietnam, Bangladesh, and Honduras have encouraged the outsourcing of work from the developed world to factories within their borders in order to provide employment for their people and profits to the employers.
The World Bank has estimated that 1/5th of human beings live under the international poverty line. The poverty situation in the world has improved due in a large part to the economic success of China and India, the two countries with the largest number of workers in sweatshops. Against this progress in the developing world, the economic inequality between the richest and poorest also increased:
The income gap between the fifth of the world's people living in the richest countries and the fifth in the poorest was 74 to 1 in 1997, up from 60 to 1 in 1990 and 30 to 1 in 1960. Earlier the income gap between the top and bottom countries increased from 3 to 1 in 1820 to 7 to 1 in 1870 to 11 to 1 in 1913.
Whether sweatshops ultimately exacerbate inequalities, or whether the shift of production to developing countries as part of the globalization process that has led to their increase is an appropriate tool for raising living standards, remains a hotly-contested question.
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