After finishing up The Undercover Economist I found the highlight of the last five chapters to be about sweatshops in poor countries, as many of us did. I think the reason I found this particular point so fascinating (although there were others that came close) was because this issue is so controversial and yet so under researched. Who are these protesters against sweatshops and why are they trying to get rid of all these jobs in underdeveloped countries? First off, this is not the first time I have heard the argument for sweatshops, but it compels me nonetheless. I feel the need to write on this subject to inform people the positive impact that outsourcing has on poor countries, even though my audience clearly already knows the benefits.
I’ll start by saying it is undeniable that the conditions in these sweatshops, to us Americans, seems cruel and unbearable. Minimal pay, poor conditions, long hours with few breaks and strict management. I wouldn’t want to work there. Well, I wouldn’t want to work there if this sweatshop was in America anyway. This however should be acknowledged as a step up from the other working environments. First of all the wages are better than most other companies in these countries can offer and so are the conditions. I think Harford mentioned that many other people we out prostituting themselves or digging in landfills and avoiding landslides. I would choose the sweatshop in this case.
Next, the sweatshop provides jobs that were not once available. Now this country has not only more jobs, but better jobs. After a while this makes the other local competing companies raise their wages and improve their conditions to get workers. Net result: all around better working environments and more jobs with higher pay.
Now, what about the Americans? Many people view outsourcing as negative because it takes away from American job opportunities. If Nike only hired American workers to make their shoes we would probably pay $400 for a pair of Air Jordans. Very few people would pay that for a pair of tennis shoes from Nike when they could buy a similar pair from New Balance, or Rebok or anyone else that produces shoes. So, Nike would go out of business and all the jobs that Americans had with Nike would now be lost. Not only that, but when companies like Nike and Gap move to other countries it provides an alternative for these people as well. Not only are they making our clothes they are now buying these products as well which saves money but also makes more money by selling products to their workers and families and the rest of the country.
I think having read Harford’s book we can all agree that we have different views on the world and may reconsider some of our beliefs and decisions. But that is the point of the class, now isn’t it?
Also, I few years ago I read, The World is Flat by Thomas Friedman which also offers some great insight to globalization if anyone is interested.