Naked Economics: Undressing the Dismal Science pdfdrive com

The comparative advantage of workers in poor countries is cheap labor. That
is all they have to offer. They are not more productive than American workers;
they are not better educated; they do not have access to better technology. They
are paid very little by Western standards because they accomplish very little by
Western standards. If foreign companies are forced to raise wages significantly,
then there is no longer any advantage to having plants in the developing world.
Firms will replace workers with machines, or they will move someplace where
higher productivity justifies higher wages. If sweatshops paid decent wages by
Western standards, they would not exist. There is nothing pretty about people
willing to work long hours in bad conditions for a few dollars a day, but let’s not
confuse cause and effect. Sweatshops do not cause low wages in poor countries;
rather, they pay low wages because those countries offer workers so few other
alternatives. Protesters might as well hurl rocks and bottles at hospitals because
so many sick people are suffering there.
Nor does it make sense that we can make sweatshop workers better off by
refusing to buy the products that they make. Industrialization, however
primitive, sets in motion a process that can make poor countries richer. Mr.
Kristof and Ms. WuDunn arrived in Asia in the 1980s. “Like most Westerners,
we arrived in the region outraged at sweatshops,” they recalled fourteen years
later. “In time, though, we came to accept the view supported by most Asians:
that the campaign against sweatshops risks harming the very people it is
intended to help. For beneath their grime, sweatshops are a clear sign of the
industrial revolution that is beginning to reshape Asia.” After describing the
horrific conditions—workers denied bathroom breaks, exposed to dangerous
chemicals, forced to work seven days a week—they conclude, “Asian workers
would be aghast at the idea of American consumers boycotting certain toys or
clothing in protest. The simplest way to help the poorest Asians would be to buy
more from sweatshops, not less.”
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You’re not convinced? Paul Krugman offers a sad example of good
intentions gone awry:
In 1993, child workers in Bangladesh were found to be producing
clothing for Wal-Mart and Senator Tom Harkin proposed legislation
banning imports from countries employing underage workers. The direct
result was that Bangladeshi textile factories stopped employing children.
But did the children go back to school? Did they return to happy homes?
Not according to Oxfam, which found that the displaced child workers
ended up in even worse jobs, or on the streets—and that a significant
number were forced into prostitution.
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Oops.