Sweatshops: A Way Out of Poverty - Benjamin Powell - Mises Daily

Sweatshops: A Way Out of Poverty - Benjamin Powell - Mises Daily: "I found 83 cases of supposedly exploitative sweatshop wages reported in popular press sources and compared those earnings to the living standards in the countries where they were found. In every country where the sweatshops were located, more than 10 percent of the population lived on less than $2 per day. In more than half of the countries, more than 40 percent did. Yet, in 77 of the 83 cases, the sweatshop wages exceeded the $2 a day threshold. Five of the six exceptions occurred in Bangladesh, where the workers earned more than $1.25 per day — something that more than half the population of that country failed to achieve at the time."



"sweatshop earnings even compared favorably to the average incomes in the countries where they were located. In six of the 17 countries, the average reported sweatshop wage exceeded the average income in the country — in Haiti, Honduras, and Nicaragua it was more than twice the national average. In another six countries, the average reported sweatshop wages were around the national average. In four of the five countries where sweatshop wages were 50 percent below the national average, the workers were immigrants (sometimes illegal) from other countries and their sweatshop wages exceeded the average wage in their native country.



In short, sweatshops provide the least-bad option for the workers who work in them."



"That process of development took roughly 150 years in Great Britain, because much of the capital had to be created anew and the technology invented. The United States transformed from a pre-industrial society to a post-sweatshop society more rapidly, because it imported technology and capital from Great Britain.



In 1950, Hong Kong, Singapore, Taiwan, and South Korea were just beginning the process of development with sweatshops. In about a generation and a half, they catapulted from pre-industrial levels of development to first world living standards."



"In countries with average incomes above $12,000, there is virtually no child labor. But for countries whose incomes are below $2,000, more than 30 percent of children work.



As families escape poverty, they remove their children from the labor force. Child labor laws go unenforced or force children to work in informal sectors when they are passed prior to achieving a level of development that would have removed children from the labor force anyway."