Does the anti-sweatshop movement help or harm workers in low-wage economies?
Issues and Background
The advantages of established First World industries are still formidable. The only reason
developing countries have been able to compete with those industries is their ability to offer
employers cheap labor. Deny them that ability, and you might well deny them the prospect of
continuing industrial growth, even reverse the growth that has been achieved. And since
export-oriented growth, for all its injustice, has been a huge boon for the workers in those
nations, anything that curtails that growth is very much against their interests. A policy of
good jobs in principle, but no jobs in practice, might assuage our consciences, but it is no
favor to its alleged beneficiaries.
~Paul Krugman, Slate, 3/20/97
While caution is clearly needed in setting minimum decent standards for workplace conditions, workers
rights, and wage levels, there is still no reason to assume that a country or region that sets reasonable
standards must experience job losses. Additional policy measures will also be crucial for enhancing any
region’s overall employment opportunities and competitiveness. Such initiatives include: measures to
expand the overall number of relatively high quality jobs; relief from excessive foreign debt payments; raising
worker job satisfaction and productivity and the quality of goods they produce; and improving the capacity to
bring final products to retail markets. Moreover, as long as consumers in wealthier countries are willing to
pay somewhat higher retail prices to ensure that garments are produced under non-sweatshop
conditions—as recent polling data for the U.S. suggests is the case—the higher revenues within the
industry could be used to improve workplace conditions and wages for production-level workers, without
creating pressures for manufacturers to reduce their number of employees.
~Scholars Against Sweatshop Labor
The anti-sweatshop movement in the U.S. and other industrialized economies has, in recent years, attempted to
use consumer boycotts to eliminate sweatshop working conditions and child labor in less
developed economies. Unions and college student groups have been leading the drive for
The anti-sweatshop movement received a great deal of popular attention when it was discovered
that Kathie Lee Gifford's clothing company had employed Honduran sweatshop workers to produce
her line of clothing for Walmart. Approximately 10% of the workers employed in this task were
between the ages of 13 and 15. A 75-hour workweek was the norm in these factories. When this
became publicized, Kathie Lee Gifford denounced these sweatshops and stated that she was unaware
of the working conditions in these factories.
In response to the anti-sweatshop movement, several organizations have been created or have
expanded their roles to monitor working conditions in less developed countries. Among the
major organizations serving this function are the Workers Rights Consortium (WRC), the
Fair Labor Association (FLA), Verité, and Social Accountability International (SAI).
Advocates of boycotts of items produced in sweatshop working conditions argue that these boycotts
will force foreign companies to improve pay and working conditions. This argument is sometimes
based on a belief that firms operating sweatshops are receiving positive economic
profits as a result of the exploitation of their workers. In this case, improvement in working
conditions could be made without a substantial reduction in employment.
Those in the anti-sweatshop movement also cite surveys that indicate that consumers in
industrialized economies are willing to pay higher prices for products produced under better
working conditions. This suggests that the adherence by firms to "codes of conduct" may allow
firms in low-wage economies to pay higher wages to their workers without losing profits.
Opponents of boycotts argue that workers choose to work in sweatshops only
if the utility associated with the pay and working conditions exceed that of
their next-best alternative use of time. They suggest that a boycott that reduces
demand for output produced in these factories will reduce the demand for labor in
these economies, resulting in lower average wages for workers.
Much of the public attention in the anti-sweatshop movement has been focused on multinational
businesses. When operating
their own factories in less developed countries, these firms generally offer higher wages and
better working conditions than are the norm in these countries. These companies also, however,
subcontract much of the work to local businesses. These subcontracting firms account for a
substantial share of documented sweatshop working conditions. One of the divisive issues in the
anti-sweatshop movement is whether multinational firms should be a part of the regulating and
Unions tend to be among the strongest advocates of boycotts of products produced in
sweatshops. This may be due to legitimate concerns over the wellbeing of foreign workers.
Domestic union workers, however, may benefit from a boycott of products produced
by foreign sweatshop workers. The demand for domestic union workers will rise (and become more
inelastic) if the goods produced by low-wage sweatshop workers are no longer perceived as being
close substitutes to the goods produced by union workers. Therefore, a boycott of this sort will
be expected to increase the wage and employment levels for union workers.
While much of the anti-sweatshop movement is directed at foreign sweatshops, activists
note that sweatshops still exist in the U.S. Studies suggest that a substantial proportion of
plants in the domestic textile industry are in violation of laws concerning the minimum wage,
overtime pay, or OSHA regulations. Illegal aliens are especially likely to be the victims of
sweatshop working conditions in the U.S. since they are unlikely to initiate legal action
against their employers.
Primary Resources and Data
- Alexander Gourevitch, "No Justice, No Contract: The Worker Rights Consortium Leads the Fight Against Sweatshops"
In this June 29, 2001 online American Prospect article, Alexander Gourevitch examines
the role of the Worker Rights Consortium in the anti-sweatshop movement. As part
of this discussion, he investigates the history of the recent anti-sweatshop movement in the U.S.
Gourevitch argues that one of the most important issues in the anti-sweatshop movement has been
the full public disclosure of the location of factory sights. Monitoring is not possible without
this disclosure. He also argues that the effectiveness of the Fair Labor Association is limited by its
willingness to allow companies to monitor themselves. Gourevitch argues that the independent
monitoring service provided by the Worker Rights Consortium is better able to illuminate
- The Smithsonian Institution, "Between a Rock and a Hard Place: A History of American
Sweatshops, 1820 - Present"
This website contains pictures of materials from the Smithsonian Institution's exhibit on the
history of sweatshops in the U.S.
- Business for Social Responsibility Education Fund, Investor Responsibility Research Center, and
Dara O'Rourke, "Independent University Initiative Final Report"
This report examines the working conditions in firms at which university-licensed
clothing is manufactured. The study was conducted through a joint initiative
by Harvard University, the University of Michigan, Notre Dame University,
Ohio State University, and the University of California. It was found
that working conditions were relatively poor in apparel factories located
in China, El Salvador, Mexico, Pakistan, South Korea, Thailand, and
the United States. This study suggests that the use of a variety of
monitoring agencies with alternative "Codes of Conduct" results in duplicative
monitoring effort and does not encourage greater compliance. Since different
firms often adopt different standards, monitoring and compliance costs
are higher for manufacturing firms that perform subcontract work for
several companies that adopt different standards. The Adobe Acrobat
viewer plugin is required to view this document. You may download this
viewer by clicking here.
- Pilot Project for Licensing Labor Code Implementation, "Final Report"
This October 3, 2000 report summarizes the result of a pilot program
on labor code licensing implemented by representatives of Boston College,
Duke University, Georgetown University, the University of North Carolina
at Chapel Hill, the University of Southern California, and the University
of Wisconsin at Madison. In this pilot program, monitoring programs
for five licensees were implemented on a trial basis. The five factories
that were monitored were located in Costa Rica, El Salvador, Korea,
Mexico, and Taiwan. The audits found some shortcomings in each of the
factories examined. Some, but not all, of these issues were corrected
before follow-up audits. The Adobe Acrobat viewer plugin is required
to view this document. You may download this viewer by clicking here.
- International Labour Organization, "Labour Practices in the Footwear, Leather, Textiles, and Clothing Industries"
This October 2000 report on labour practices in the footwear, leather, textiles and clothing industries
examines the effect of globalization on these industries. It is noted that production in these
industries increased dramatically in the 1980s and 1990s in Asia and in both South and Central America while
production fell in Europe. These industries have been a major source of employment for women in
low-wage economies (74% of the workers in the global clothing industry were women in 1995).
It is noted that wages had increased in these industries in the 1990s and the male-female wage gap
This report indicates that child labor appears to have been declining, but not eliminated, in the 1990s.
A recent study was cited that indicates that there were approximately 250 million children aged 5
through 14 who were working in the late 1990s. A substantial share of this child labor appears to be
in the footwear, leather, textiles and clothing industries. National governments, however, have
been taking a more active role in restricting the use of child labor in most economies.
- U.S. Department of Labor, "Wages, Benefits, Poverty Line, and Meeting Workers' Needs
in the Apparel and Footwear Industries of Selected Countries"
This February 2000 study examines working conditions in the apparel
and footwear industries in 35 of the major countries involved in these
forms of production. This document provides very detailed information
on laws governing working conditions (including laws governing the minimum
wage and overtime) in each economy. Measurement problems in establishing
poverty levels and poverty rates are also discussed. Wage rates, the
length of the workweek, and poverty rates for workers in these industries
are compared across economies. The Adobe Acrobat viewer plugin is required
to view this document. You may download this viewer by clicking here.
- U.S. Department of Labor, Employment Standards Administration
The web site of the Employment Standards Administration of the U.S. Department of Labor
contains information on compliance with U.S. laws governing wages, hours, and working conditions.
- Kheel Center for Labor-Management Documentation and Archives, Cornell University, "Triangle Factory Fire"
The Triangle Shirtwaist Factory Fire in New York City on March 25, 1911, resulted in the deaths of 146 of
500 workers who had been laboring under sweatshop working conditions. The publicity and investigations
that resulted from this fire resulted in a public outcry over poor working conditions.
- World Trade Organization
The World Trade Organization monitors and enforces international trade agreements. Opponents of
sweatshops argue that the globalization that has resulted from the relaxation of trade barriers
has resulted in a shift of employment in several manufacturing industries from industrialized
economies to low-wage economies in which sweatshop production is commonplace. Advocates of free
trade argue that globalization has increased the demand for labor and wages in these low-wage
economies, improving the position of low-income households.
- Worker Rights Consortium
The Worker Rights Consortium (WRC) has established a code of conduct. It monitors firms for
compliance with this code. This organization has been used by many colleges and universities to
ensure that college-licensed products are not produced under sweatshop working conditions.
- Fair Labor Association
The Fair Labor Association (FLA) is another nonprofit organization that has established a code of
conduct. It monitors firms for compliance with this code. This organization has also been used by
many colleges and universities in their attempts to ensure that college-licensed products are not
produced under sweatshop conditions. Some activist groups have criticized this organization for
allowing firms to participate in their process. Others argue that this enhances their effectiveness
in achieving their goals.
- Social Accountability International
Social Accountability International (SAI) is a human rights organization that monitors firms for compliance
with workplace standards. This website provides a detailed description of the process by which their standards
are developed and monitored.
- Human Rights Watch
Human Rights Watch is an international organization that works to publicize and eliminate
human rights abuses. The human rights issues investigated by this organization include child
labor and poor working conditions.
- Sweatshop Watch
Sweatshop Watch is a coalition or organizations that are opposed to sweatshop working conditions.
Their website provides numerous examples of sweatshop working conditions, primarily in the
garment industry. An extensive collection of links to anti-sweatshop resources is provided on
Different Perspectives in the Debate
- United Students Against Sweatshops
United Students Against Sweatshops is an international coalition of student groups that are
working to eliminate sweatshops. One of their main strategies is to attempt to prohibit
campus purchases from firms that operate sweatshops. It is argued that colleges should
only purchase materials from companies in which all workers are paid a "living wage" (a wage
that is set at a level at which a full-time worker will be able to support a family at or
above the poverty level).
Detailed information on this organization may be found on its
- Students Against Sweatshops - Canada
The web site of the Canadian branch of Students Against Sweatshops contains information on
the Canadian anti-sweatshop movement on college and university campuses.
- Academic Consortium on International Trade
The Academic Consortium on International Trade argues that boycotts of firms relying on sweatshop
labor ultimately harm the very workers the boycotts are intended to assist. The
page at this web site contains links to an extensive collection of online resources containing
viewpoints from both sides of this issue. Questions are raised concerning the methods recommended
by anti-sweatshop groups in a
letter to college presidents prepared by the members of
this consortium. This group consists of a well-respected collection of economists and lawyers who
specialize in international trade issues.
- Scholars Against Sweatshop Labor
This organization is composed of academics (primarily economists) who endorse the use of boycotts
of products produced under sweatshop working conditions. The main arguments of this group may be
found in their
statement written in response to the letter to college presidents issued by the
Academic Consortium on International Trade. It is argued that boycotts of products produced
by sweatshop workers indicate a willingness by American consumers to pay more for products
produced under humane working conditions. This suggests that companies relying on sweatshop
working conditions could increase wages without a substantial reduction in the sales of their
products. If this is the case, higher wages could result in higher employment rather than lower'
levels of employment.
- AFL-CIO, "Worker-Friendly Products"
This page, provided by the AFL-CIO, provides information on the anti-sweatshop movement from
a union perspective. Links to other resources in the anti-sweatshop movement are provided from
- Union of Needletrades, Industrial and Textile Employees (UNITE)
The Union of Needletrades, Industrial and Textile Employees (UNITE) was one of the first groups
to lobby for boycotts of products produced under sweatshop working conditions. This union helped
to develop and coordinate student protests against sweatshops. The website of this organization
contains information on their anti-sweatshop
- International Confederation of Free Trade Unions, "Trade & Labour Standards"
This web page presents the positions of the International Confederation of Free Trade Unions on
international labor standards. It is argued that globalization has resulted in a shift in many types
of labor from high-wage to low-wage economies. Child labor and forced labor are also cited as
problems in some of these low-wage countries.
- International Labour Organization
The International Labour Organization is an international organization that is concerned with
issues such as child labor, working conditions, and labor standards. This web site contains
a large collection of information and studies dealing with
these and related issues.
- Doris Hajewski, "The Unsettling Price of Low-Cost Clothes"
In this December 29, 2000 JSOnline article, Doris Hajewski examines sweatshop
working conditions in Nicaragua. She notes that employees in the Chentex Garments factory are
paid a little over $7 a day for a 10-hour workday. Hajewski presents arguments on both sides of
this issue in this article.
- Paul Krugman, "In Praise of Cheap Labor: Bad Jobs at Bad Wages are Better Than No Jobs at All"
Paul Krugman, in this March 20, 1997 Slate article, argues that sweatshops play an important role in
improving the economic wellbeing of workers in developing economies. He argues that sweatshop labor
is a preferable alternative to lower-wage employment. Krugman suggests that sweatshop industries
offer higher wages than workers could receive elsewhere and create multiplier effects that stimulate the
rest of the economy.
- William Anderson, "Kathie Lee's Children"
In this September 1996 Free Market article, William Anderson argues that sweatshops
provide better working conditions for foreign workers than is available in alternative occupations.
He indicates that the introduction of sweatshops in Honduras has resulted in substantial increases
in wages and job opportunities. Anderson argues that prohibitions of child labor in less developed
economies make children less valuable to their parents. He suggests that pressure from Oxfam resulted
in the layoff of 30,000 children, causing thousands to starve or turn to prostitution. Anderson
argues that U.S. unions support bans on sweatshops because this increases the earning prospects
for U.S. union members.
- James K. Galbraith, "Making the case for higher numbers"
In this June 24, 2001 Boston Globe article, James K. Galbraith argues in support of
boycotts of materials produced under sweatshop working conditions. Critics of this movement, he
suggests, are relying on simplistic demand and supply models of competitive markets that are not
appropriate for describing many labor market processes. Galbraith indicates that, under more realistic
economic models (e.g., efficiency wage and monopsony models), higher wages may lead to higher
levels of employment. He argues, though, that international agreements reached through the WTO would
be more effective in eliminating sweatshop working conditions and child labor. Boycotts of
specific manufacturers are less likely to achieve the broader goal of improving working conditions
in low-wage economies.
- Green Party of Aotearoa, New Zealand, "Greens Return Sweat Shop 'Spots' to Telecom"
This September 20, 2000 press release describes a situation in which members of New Zealand's
Green Party return gifts produced in a sweat shop to their donor. Child labor and poor working
conditions in Chinese factories are described in this document.
- Northwestern Students Against Sweatshops, "Sweatshop Monitoring: NU's Campus Debate"
This April 2001 Northwestern Students Against Sweatshops document describes their main arguments
against sweatshops. It is argued that sweatshops exist throughout the world, including over
11,000 sewing shops in the U.S. that violate one or more labor laws. This group argues that
Northwestern University should only buy products from companies that meet the standards of the
Workers' Rights Consortium. (This document is provided in Microsoft Word format. To read it,
you must have Microsoft Word, a compatible wordprocessing package, or an appropriate browser
- University of Wisconsin at Madison, "UW-Madison and Sweatshops"
This web site contains information of the official position of the University of Wisconsin at
Madison on the use of sweatshop labor in producing university licensed apparel. This institution
has been particularly active in requiring disclosure and adherence to and monitoring of
international labor standards.
- Thomas L. Friedman, "Knight is Right"
Thomas L. Friedman, in this June 20, 2000 New York Times op-ed, discusses the
decision by Phil Knight (the chairman of Nike) to withdraw a contemplated $30 million donation
to the University of Oregon. This decision was made in response to the University of Oregon's decision
to join the Worker Rights Consortium instead of the Fair Labor Association. Friedman argues that
the approach of the Fair Labor Association is more likely to result in positive impacts in working
conditions for sweatshop workers. He suggests that the Worker Rights Consortium is
backed by unions to further protectionist objectives.
This website contains online information on sweatshops from an anti-sweatshop perspective.
- RAISETHEFIST.COM, "Boycott Nike"
This online article suggests that Nike has relied on sweatshop labor in Vietnam. A CBS News study
of working conditions in Nike factories in Vietnam is cited as evidence of these conditions.
- Nike, "Transparency 101 Continues: North Asia"
This Nike web site discusses Nike's Code of Conduct and its responses to criticism over
the use of sweatshop labor.
- The Collegiate Living Wage Association
The Collegiate Living Wage Council is a group organized to attempt to raise ensure that a
living wage is received by workers in companies that produce college-licensed products. Links to
several online research studies are provided at this site.
- Ajit Singh and Ann Zammit, "The Global Labour Standards Controversy: Critical Issues for
This policy study examines the effect of the imposition by industrialized countries of global
labour standards. Singh and Zammit argue that these standards are often seen by developing
economies as being protectionist in nature. They suggest that such standards would harm developing
economies without providing substantial benefits to industrialized countries. It is argued that
a better strategy is to encourage economic growth and structural change in less developed economies.
- T.N. Srinivasan, "Living Wage in Poor Countries"
T.N. Srinivasan discusses some of the problems associated with attempting to require that a
"living wage" be received by workers in low-wage economies. He notes that enforcement is not a
feasible goal in South Asia since more than half of the labor force is self-employed. Those
workers who work for pay work in a very large number of small firms, making monitoring and
enforcement very costly. Workers in multinational firms generally receive relatively high
levels of wages and benefits, so there is little need for a living wage requirement for workers
in this category. Srinivasan suggests that the more serious problem is the poverty of both
working and non-working individuals in less developed economies. He suggests that more effective
methods of improving the wellbeing of the poor include: reducing trade barriers, reducing restrictions
on immigration in industrialized economies, and a reduction in government intervention in the economy.
- Kimberly Ann Elliot and Richard B. Freeman, "White Hats or Don Quixotes? Human Rights Vigilantes in the Global Economy"
Kimberly Ann Elliot and Richard B. Freeman, in this online study, investigate
the willingness of consumers to pay a higher price for products produced
under better working conditions. Survey evidence is presented that indicate
that consumers respond to information about working conditions and are
willing to pay a higher price for products that are not produced under
sweatshop conditions. In particular, it was found that consumers, on
average, were willing to pay a premium of 28% on $10 items and 15% on
$100 items for goods produced under good working conditions. The authors
use results from experimental economics to provide further support for
these survey results. The Adobe Acrobat viewer plugin is required to
view this document. You may download this viewer by clicking here.
- Mary Bull, "Boycott the Gap: 'Tis the Season to E_S_C_A_L_A_T_E!!!"
This December 8, 2000 online document discusses the boycotts that were used to encourage the
Gap to not sell products produced under sweatshop working conditions. It is argued that previous
boycotts resulted in a substantial reduction in the Gap's profits.
- Michael T. Rock, "Public Disclosure of the Sweatshop Practices of American Multinational Garment/Shoe Makers/Retailers:
Impact on Their Stock Prices
This online paper uses event study analysis to examine the effect of
public disclosure of sweatshop working conditions on a firm's stock
price. Rock finds that the disclosure of sweatshop practices has resulted
in an adverse effect on firms' stock prices. In the case of Reebok,
it is found that the introduction of anti-sweatshop practices has resulted
in a positive effect on the firm's stock price. The Adobe Acrobat viewer
plugin is required to view this document. You may download this viewer
by clicking here.
- Clean Clothes Campaign
This website argues for the abolition of sweatshop labor in the clothing industry. Newsletters,
online articles, a discussion of their campaign, and other related materials are available on this
- Young Chang, "Behind-the-Scenes Fashion: Exploitation in Today's Garment Industry"
Young Chang, in this October 8, 1998 Johns Hopkins Newsletter article, describes an
alternative fashion show at Johns Hopkins University. Students at this show wore clothes produced
under sweatshop working conditions. It is argued that the globalization that has resulted from
NAFTA, the GATT, and other trade agreements have encouraged the use of sweatshop labor in low-wage
- National Labor Committee
The National Labor Committee argues for the elimination of sweatshop working conditions. An extensive
collection of online resources that describe working conditions in sweatshops is available on this
- Jews for Racial and Economic Justice, "Campaign Against Sweatshops and for Decent Jobs at Living Wages"
Jews for Racial and Economic Justice provides a historical perspective on the use of sweatshops
in the U.S. They argue for a boycott of products produced using sweatshop labor.
- Mark Weisbrot, Robert Naiman, and Natalia Rudiak, "Can Developing Economies Afford to
Ban or Regulate Child Labor?"
This online article examines whether low-income economies can afford
to ban child labor. This study presents estimates of the real per
capita income levels in industrialized economies at the time at
which they imposed a ban on child labor. It is observed that most low-wage
economies have achieved a level of per capita income that is
comparable to the levels received in industrialized economies at the
time at which their child labor ban was instituted. This suggests that
a child labor ban could be imposed with no greater cost than had been
experienced in industrialized economies. The Adobe Acrobat viewer plugin
is required to view this document. You may download this viewer by clicking
- Heritage Foundation Issue Brief, "Child Labor"
In this online document, the Heritage Foundation argues that child labor standards adopted in
industrialized countries may have adverse unintended effects when imposed on less developed
economies. It is suggested that such bans may harm children in these countries by sending them less regulated
workplaces in the underground economy. Child labor exists primarily as a result of poverty.
This labor by children, it is noted, "often helps ensure the survival of their family and themselves.".
- Robert Pollin, Justine Burns, and James Heintz, "Global Apparel Production and Sweatshop Labor: Can Raising Retail Prices Finance Living Wages?"
In this 2001 Political Economy Research Institute working paper, Robert
Pollin, Justine Burns, and James Heintz investigate the possibility
of financing living wages through higher retail prices. The authors
note that surveys indicate that consumers are willing to pay higher
prices for products that are produced under humane working conditions.
They find that the retail price increases needed to provide "living
wages" in less developed economies are within the range that surveys
indicate that U.S. consumers are willing to pay. This suggests that
sweatshop working conditions could be eliminated without a significant
adverse employment effect, The Adobe Acrobat viewer plugin is required
to view this document. You may download this viewer by clicking here.
- Maquila Solidarity Network
On this web site, the Maquila Solidarity Network provides information about sweatshop practices.
Case studies, reports, press releases, and links to related online resources are available on this