Cheap, Exploitative Labour in Developing Nations

Many of us often hear horror stories of workers in countries like Bangladesh or India working hours on end in terrible conditions and wonder what we can do? Some of us try to raise awareness, others boycott products produced in sweatshops. While this is a natural reaction, unfortunately, it’s a mistaken one. Despite low wages, Haiti’s textile workers see salaries of 3 dollars a day and Bangladeshi workers make less than 40 dollars a day, so called “exploitative” work is actually necessary and taking steps to simply halt it would actually be devastating to much of the world.

In criticizing labour in the developing world most analyze the work these individuals perform in a vacuum. In our concern for these people, in some cases being beaten and tragically overworked, we forget that the world doesn’t exist one dimensionally. We assume that if people didn’t work in these exploitative manufacturing industries they would work somewhere else in better and safer conditions. Thus, it is important to remember that in fact these people often have no other alternative. A poor textile worker in Bangladesh cannot work in a specialized factory, nor can they enter the world of business, law or medicine. They do not have the prerequisite skills. Comparatively, in Haiti, a country where 6-7 million people are not even literate in one language, the vast majority of the people in manufacturing simply cannot do anything else. Consequently, the choice is not between a job in manufacturing, in particularly dangerous conditions, versus a safer job, in a tertiary or quaternary industry; rather the choice is far more simple and clear; the choice is between working in a sweatshop, risking injury, but at least providing food for your self or not working at all and subsequently dying of starvation. This also addresses the nature of the work being exploitative - it’s not exploitative, from the workers’ perspective, all of them would make the choice to work in the factories over and over again because even if they are being taken advantage of, food and risk is better than certain death; the work makes these people’s lives better.

In response to the previous dichotomy people typically ask, well why is this the only alternative for these people; can we not make it so they have some other, better, choice? While this seems a promising plan at first, in reality the existence of so called “exploitative” labour is actually the only option for these countries. The reasons for this are twofold, but related. Nations, throughout the course of history, always go through periods of economic evolution. Eventually they get to a level where creative destruction happens, or if it has already happened elsewhere in the world, the countries workers are skilled enough for the economic revolution to happen. Throughout history, in the development of countries like the UK, US, Singapore, and South Korea, there has always been a marked period of time where manufacturing was the staple of these countries economies. Moreover, in the pursuit of development, as best illustrated perhaps by Hong Kong, Singapore and South Korea, cheap manufacturing is often a countries only true comparative advantage. South Korea, Singapore and Hong Kong, all were large manufactures 50-60 years ago, back then, before they had specialized workers and achieved their current prosperity, this was the driving force of their development. Unfortunately, and in no way their fault, Haiti can provide little of note to the international community. In fact, all they can truly provide is cheap labour. Thus, they need to have these textile industries, these factories of mass production, because it’s the only place they have an advantage - their low wages make them competitive and give them the money they so desperately need.

Best of all, the type of labour we currently see in nations like Bangladesh is actually setting the platform for future success. We hear about fires in factories and poor working conditions, and these do exist; however, conditions are getting better. Workers are seeing rights guaranteed and the best workers work in safer factories. This has to deal with the natural economic evolutions of countries; as they become more prosperous and more productive they can afford safer methods of production. Once they become productive enough they no longer can even have these type of sweatshops and hubs of manufacturing because putting workers in them isn’t allocatively efficient. That’s exactly what happened with South Korea; now it is one of the most productive countries in the world and it no longer manufactures textiles but now innovates and creates some of the best technology in the world.

While it may seem greater to argue for better working conditions and refuse to buy goods made in sweatshops, this kind of consumer action is actually to be discouraged. First of all, while perhaps an unfortunate reality, the kind of labour that happens in many developing countries is a necessary part of their evolution. More importantly, if we boycott the products, the massive corporate conglomerates are not the ones that will suffer most meaningfully. The poor factory workers will feel the brunt of any change in purchasing behaviour, only making their already poor lives even worse.

By,

Peter Koczanski