Chelsea Follett

During the student activity fair for freshmen, you may have
noticed organizations like United Students Against Sweatshops urging you to
protest so-called sweatshops in poor countries. Maybe you’ve
seen posters around campus calling for boycotts of goods made in
such factories. Perhaps you yourself have engaged in anti-factory
activism alongside your classmates.

Yet experts across the political spectrum—including Nobel
Prize winning economist Paul Krugman, Pulitzer Prize-winning journalist
Nicholas Kristof, and Columbia University
professor Jeffrey Sachs—have argued that opposition
to “sweatshops” in poor countries hurts the very
workers that activists seek to help. Student activists would do
well to read Benjamin Powell’s concise and persuasive defense
of such factory work, “Out of Poverty: Sweatshops in the Global
,” published by Cambridge University Press in
2014. The book focuses solely on the well-being of factory
workers—not what would be best for factory owners or economic

People in developing
nations deserve the chance to industrialize and achieve the same
prosperity the West gained through its own Industrial

Factory workers routinely garner more publicity than the
world’s poorest people, who are overwhelmingly rural and live
lives of destitution precisely because they are largely untouched
by global capitalism. Powell devotes his second chapter to showing
that anti-factory activism receives generous funding from labor
unions in the United States and Europe. These unions pay lip
service to “solidarity” with workers in poor countries
but are primarily focused on keeping manufacturing jobs away from
poor countries. Powell suggests that unions manipulate idealistic
student activists to push for high labor standards that only rich
countries can meet, including “sweat-free” labeling for
clothing made under those standards.

Powell presents two main arguments for why activists should
change their approach: (1) taking away the option of factory work
harms factory workers, and (2) factories can serve as a step in the
process of economic development that ultimately cures poverty.

If someone chooses to work in a factory, she must see that as
her best option. Taking away her best option without offering
anything better makes her worse off. As Powell shows, prematurely
raising of labor standards and wages by governments results in
worse options for factory workers. In the early 1990s, Indonesia
more than doubled the real value of its minimum wage in response to
U.S. threats of trade restrictions—a policy pushed by U.S.
student activists. This led to the closure of many manufacturing
plants, and Indonesian employment fell by at least 12 and as much as 36 percent.
Similarly, when Nike and Adidas limited working hours at Chinese
supplier factories to ease the consciences of U.S. activists,
“many workers quit, complaining that the overtime pay was no
longer enough.” In South Africa, when government officials
tried to shut down rural garment factories for failing to comply
with minimum wage laws in 2010, “desperate clothing workers threatened to assault
and burn their vehicles rather than lose their

As Paul Krugman has eloquently put it, “Bad jobs at bad
wages are better than no jobs at all.” (Or, as in the Chinese
example, jobs at bad wages are better than jobs at even worse
wages.) Yet the campaign against factories in poor countries
routinely ignores the wishes of the workers themselves, limiting
workers’ options.

Factory work is not only a stepping-stone out of extreme poverty
for workers, but can help grow an entire economy and eradicate
extreme poverty altogether. Remember, today’s wealthy
countries once had their own factories with conditions often worse
than those in poor countries today. In the United Kingdom, the
first country to industrialize, “the process of development
involving sweatshops lasted from 130 to 160 years. In the United
States, the process was faster, taking around 100 years.”
Powell notes that legal labor standards and the introduction of a
minimum wage in those countries largely mirrored what factories
were already doing—essentially codifying preexisting norms
instead of prompting a change in industry practices.

The development process has gotten faster. In South Korea,
Taiwan, Hong Kong, and Singapore, the process of moving from
industrialization to First World living standards took less than
two generations, as opposed to a century in the United States.
Factories helped workers in those countries escape poverty and
their children achieve postindustrial prosperity. As Powell says,
“Sweatshops themselves are part of the very process of
development that will lead to their own elimination.”

Instead of opposing factories, activists might consider
campaigns to buy goods manufactured in impoverished parts of the
world, such as sub-Saharan Africa, in the name of ending poverty.
“My concern is not that there are too many sweatshops but
that there are too few,” Jeffrey Sachs has stated.
“Those are precisely the jobs that were the steppingstone for
Singapore and Hong Kong, and those are the jobs that have to come
to Africa to get them out of their backbreaking rural
poverty.” Foreign aid has never lifted a single country out
of poverty, and in Africa aid may actually discourage needed reforms by propping up
dictators. “If Africa’s economies are to take off,
Africans will have to start making a lot more things,”
The Economist declared three years ago. “Few
countries … have escaped poverty without putting a lot of workers
through factory gates.” Unfortunately, despite its growing population and need for jobs, Africa
has been deindustrializing. The continent’s poor
business environment and faulty institutions are partially to blame
for reducing Africa’s competitiveness relative to the rest of
the world.

Activists who want to help the poor should refocus their efforts
on ending forced labor (slavery), corruption, and economic
restrictions that stifle growth and perpetuate poverty. Governments
in many poor countries score poorly
in economic freedom
and may violate their citizens’
property rights. Africa, the world’s poorest continent, also
has the worst record on economic freedom and business

People in developing nations deserve the chance to industrialize
and achieve the same prosperity the West gained through its own
Industrial Revolution. Infringements upon economic freedom hinder
the process of development and prevent people from lifting
themselves out of poverty. That is an injustice worth

is the managing editor of, a project
of the Cato Institute.

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