Tough questions (The Flemish Beerdrinker)

Interesting new research tells us what most economists from left to right already knew. Being exploited by international companies is better than not being exploited at all. Immoral as this may sound, it doesn’t make it less true:

We examined the apparel industry in 10 Asian and Latin American countries often accused of having sweatshops and then we looked at 43 specific accusations of unfair wages in 11 countries in the same regions. Our findings may seem surprising. Not only were sweatshops superior to the dire alternatives economists usually mentioned, but they often provided a better-than-average standard of living for their workers. The apparel industry, which is often accused of unsafe working conditions and poor wages, actually pays its foreign workers well enough for them to rise above the poverty in their countries. While more than half of the population in most of the countries we studied lived on less than $2 per day, in 90 percent of the countries, working a 10-hour day in the apparel industry would lift a worker above - often far above - that standard. For example, in Honduras, the site of the infamous Kathy Lee Gifford sweatshop scandal, the average apparel worker earns $13.10 per day, yet 44 percent of the country’s population lives on less than $2 per day. In 9 of the 11 countries we surveyed, the average reported sweatshop wages equaled or exceeded average incomes and in some cases by a large margin. In Cambodia, Haiti, Nicaragua, and Honduras, the average wage paid by a firm accused of being a sweatshop is more than double the average income in that country’s economy.

Forthcoming in a serious peer-reviewed jounal this is not lightly to be dismissed. Protesters against sweatshop labour really need to start asking themselves some tough questions. For instance, is it right to take the moral highstand while the alternative is even worse for the people they are trying to defend?(For more, here is an excellent Paul Krugman piece, in the time he still was an economist).