Sweatshop (or sweat factory) is a negatively connoted term for any working environment considered to be unacceptably difficult or dangerous. Sweatshop workers often work long hours for very low pay, regardless of laws mandating overtime pay or a minimum wage. Child labour laws may be violated. Sweatshops may have hazardous materials and situations. Employees may be subject to employer abuse without an easy way to protect themselves.
The U.S. Government Accountability Office defines a sweatshop as an employer that violates more than one federal or state labor law governing minimum wage and overtime, child labor, industrial homework, occupational safety and health, worker’s compensation or industry regulation.
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While many workplaces through history have been crowded, dangerous, low-paying, and without job security, the concept of a sweatshop has its origins between 1830 and 1850 as a specific type of workshop in which a certain type of middleman, the sweater, directed others in garment making (the process of producing clothing), under arduous conditions.The terms sweater for the middleman and sweating system for the process of subcontracting piecework were used in early critiques like Charles Kingsley‘s Cheap Clothes and Nasty, written in 1850, which described conditions in London, England. The workplaces created for the sweating system were called sweatshops, and variously comprised workplaces of only a few workers, or as many as 100 or more.
In the sweatshop of 1850, the role of the sweater as middleman and subcontractor (or sub-subcontractor) was considered key, because he served to keep workers isolated in small workshops. This isolation made workers unsure of their supply of work, and unable to organize against their true employer through collective bargaining. Instead, tailors or other clothing retailers would subcontract tasks to the sweater, who in turn might subcontract to another sweater, who would ultimately engage workers at a piece rate for each article of clothing or seam produced. Kingsley asserted that the middleman made his profit by finding the most desperate workers, including immigrants from Ireland, women and children, who could be paid an absolute minimum. While workers who produced many pieces could earn more, less productive workers earned so little that critics termed their pay starvation wages. Employment was risky: injured or sick workers would be quickly replaced by others.
Between 1850 and 1900, sweatshops attracted the rural poor to rapidly-growing cities, and attracted immigrants to places like London, England and New York City‘s garment district, located near the tenements of New York’s Lower East Side. Wherever they were located, sweatshops also attracted critics and labour leaders who cited them as crowded, poorly ventilated, and prone to fires and rat infestations, since much of the work was done by many people crowded into small tenement rooms.
In the 1890’s a group calling itself the National Anti-Sweating League was formed in Melbourne, Australia and campaigned successfully for a minimum wage via trade boards. A group with the same name campaigned from 1906 in the UK, resulting in the Trade Boards Act 1909.
In 1910, the International Ladies’ Garment Workers’ Union was founded in an effort to improve the condition of these workers.
Criticism of garment sweatshops became a major force behind workplace safety regulation and labor laws. As some journalists strove to change working conditions, the term sweatshop came to describe a broader set of workplaces whose conditions were considered inferior. In the United States, investigative journalists, known as Muckrakers, wrote exposés of business practices, and progressive politicians campaigned for new laws. Notable exposés of sweatshop conditions includeJacob Riis‘ photo documentary How the Other Half Lives and Upton Sinclair‘s book, The Jungle about the meat packing industry.
In 1911, negative public perceptions of sweatshops were galvanized by the Triangle Shirtwaist Factory Fire in New York City. The pivotal role of this time and place is chronicled at the Lower East Side Tenement Museum, part of the Lower East Side Tenement National Historic Site. While trade unions, minimum wage laws, fire safety codes, and labour laws have made sweatshops (in the original sense) rarer in the developed world, they did not eliminate them, and the term came to be increasingly associated with factories in the developing world.
In a report issued in 1994, the United States Government Accountability Office found that there were still thousands of sweatshops in the United States, using a definition of a sweatshop as any “employer that violates more than one federal or state labour law governing minimum wage and overtime, child labour, industrial homework, occupational safety and health, workers’ compensation, or industry registration”. This recent definition eliminates any historical distinction about the role of a middleman or the items produced, and focuses on the legal standards of developed country workplaces. An area of controversy between supporters of outsourcing production to the Third World and the anti-sweatshop movement is whether such standards can or should be applied to the workplaces of the developing world.
Sweatshops are also sometimes implicated in human trafficking when workers have been tricked into starting work withoutinformed consent, or when workers are kept at work through debt bondage or mental duress, all of which are more likely in cases where the workforce is drawn from children or the uneducated rural poor. Because they often exist in places without effective workplace safety or environmental laws, sweatshops sometimes injure their workers or the environment at greater rates than would be acceptable in developed countries. Sometimes penal labor facilities (employing prisoners) are grouped under the sweatshop label.
Sweatshops have proved a difficult issue to resolve because their roots lie in the conceptual foundations of the world economy. Developing countries like India, China, Vietnam, Bangladesh and Honduras encourage theoutsourcing of work from the developed world to factories within their borders in order to provide employment for their people and profits to their employers. The shift of production to developing countries is part of the process known as globalization, but may also be described as neoliberal globalization to emphasize the role that free marketeconomics plays in outsourcing.
Positions on sweatshops
Some of the earliest sweatshop critics were found in the 19th century abolitionist movement that had originally coalesced in opposition to chattel slavery, and many abolitionists saw similarities between slavery and sweatshop work. As slavery was successively outlawed in industrial countries between 1794 (in France) and 1865 (in the United States), some abolitionists sought to broaden the anti-slavery consensus to include other forms of harsh labor, including sweatshops. As it happened, the first significant law to address sweatshops (the Factory Act of 1833) was passed in the United Kingdom at the same time that the slave trade (1807) and ownership of slaves (1833) were made illegal.
Ultimately, the abolitionist movement split apart. Some advocates focused on working conditions and found common cause with trade unions and Marxists and socialist political groups, or progressive movement and the muckrakers. Others focused on the continued slave trade and involuntary servitude in the colonial world. For those groups that remained focused on slavery, sweatshops became one of the primary objects of controversy. Workplaces across multiple sectors of the economy were categorized as sweatshops. However, there were fundamental philosophical disagreements about what constituted slavery. Unable to agree on the status of sweatshops, the abolitionists working with the League of Nations and the United Nations ultimately backed away from efforts to define slavery, and focused instead on a common precursor of slavery —human trafficking.
Those focused on working conditions included Friedrich Engels, whose book The Condition of the Working Class in England in 1844 would inspire the Marxist movement named for his collaborator, Karl Marx. In the United Kingdom the Factory Act was revised six further times between 1844 and 1878 to help improve the condition of workers by limiting work hours and the use of child labor. The formation of the International Labour Organization in 1919 under the League of Nations and then the United Nations sought to address the plight of workers the world over. Concern over working conditions as described by muckraker journalists during the Progressive Era in the United States saw the passage of new workers rights laws and ultimately resulted in the Fair Labor Standards Act of 1938, passed during the New Deal.
More recently, the anti-globalization movement has arisen in opposition to corporate globalization, a process by which multinational corporations move their operations overseas in order to lower their costs and increase profits. The anti-sweatshop movement has much in common with the anti-globalization movement. Both consider sweatshops harmful, and both have accused many companies (such as the Walt Disney Company, The Gap, and Nike) of using sweatshops. Some in these movements charge that neoliberal globalization is similar to the sweating system, arguing that there tends to be a “race to the bottom“, as multinationals leap from one low-wage country to another searching for lower production costs, in the same way that sweaters would have steered production to the lowest cost sub-contractor.
Various groups support or embody the anti-sweatshop movement today. TheNational Labor Committee brought sweatshops into the mainstream media in the 1990s when it exposed the use of sweatshop and child labor to sew Kathie Lee Gifford’s Wal-Mart label. United Students Against Sweatshops is active on college campuses. The International Labor Rights Fund filed a lawsuit on behalf of workers in China, Nicaragua, Swaziland, Indonesia, and Bangladesh against Wal-Mart charging the company with knowingly developing purchasing policies particularly relating to price and delivery time that are impossible to meet while following the Wal-Mart code of conduct. Labor unions, such as the AFL-CIO, have helped support the anti-sweatshop movement out of concern both for the welfare of workers in the developing world and those in the United States. 
Critics point out that sweatshop workers often do not earn enough money to buy the products that they make, even though such items are often commonplace goods such as t-shirts, shoes, and toys. In 2003, Honduran garment factory workers were paid US$0.24 for each $50 Sean John sweatshirt, $0.15 for each long-sleeved t-shirt, and only five cents for each short-sleeved shirt – less than one-half of one percent of the retail price. Even comparing international costs of living, the $0.15 that a Honduran worker earned for the long-sleeved t-shirt was equal in purchasing power to $0.50 in the United States.
Critics of sweatshops cite high savings, increased capital investment in developing nations, diversification of their exports and their status as trade ports as the reason for their economic success rather than sweatshops and cite the numerous cases in the East Asian “Tiger Economies” where sweatshops have reduced living standards and wages. They believe that better-paying jobs, increased capital investment and domestic ownership of resources will improve the economies of sub-Saharan Africa rather than sweatshops. They point to good labor standards developing strong manufacturing export sectors in wealthier sub-Saharan countries such as Mauritius and believe measures like these will improve economic conditions in developing nations.
Critics of sweatshops argue that the minor gains made by employee of some of these institutions are outweighed by the negative costs such as lowered wages to increase profit margins and that the institutions pay less than the daily expenses of their workers. They also point to the fact that sometimes local jobs offered higher wages before trade liberalization provided tax incentives to allow sweatshops to replace former local unionized jobs. They further contend that sweatshop jobs are not necessarily inevitable. Eric Toussaint claims that quality of life in developing countries was actually higher between 1945-1980 before the international debt crisis of 1982 harmed economies in developing countries causing them to turn to IMF and World Bank-organized “structural adjustments” and that unionized jobs pay more than sweatshop ones overall – “several studies of workers producing for US firms in Mexico are instructive: workers at the Aluminum Company of America’s Ciudad Acuna plant earn between $21.44 and $24.60 per week, but a weekly basket of basic food items costs $26.87. Mexican GM workers earn enough to buy a pound of apples in 30 minutes of work, while GM workers in the US earn as much in 5 minutes.” People critical of sweatshops believe that “free trade agreements” do not truly promote free trade at all but instead seek to protect multinational corporations from competition by local industries (which are sometimes unionized). They believe free trade should only involve reducing tariffs and barriers to entry and that multinational businesses should operate within the laws in the countries they want to do business in rather than seeking immunity from obeying local environmental and labor laws. They believe these conditions are what give rise to sweatshops rather than natural industrialization or economic progression.
Critics also point to the fact that sweatshops often do not pay taxes and thus don’t pay for the public services they use for production and distribution and don’t contribute to the country’s tax revenue. In some countries, such as China, it is not uncommon for these institutions to withhold workers’ pay.
|“||“According to labor organizations in Hong Kong, up to $365 million is withheld by managers who restrict pay in exchange for some service, or don’t pay at all.”||”|
Furthermore, critics of sweatshops point to the fact that those in the West who defend sweatshops show double standards by complaining about sweatshop labor conditions in countries considered enemies or hostile by Western governments, such as China, while still gladly consuming their exports but complaining about the quality. They contend that multinational jobs should be expected to operate according to international labor and environmental laws and minimum wage standards like businesses in the West do.
While East Asia has embraced large numbers of sweatshops, sub-Saharan Africa has not. This graph shows that the percentage of the population living on less than $1 per day (adjusted for inflation) has fallen substantially in East Asia, while remaining relatively unchanged in sub-Saharan Africa. The graph shows the 1981-2001 period. Data source: “How Have the World’s Poorest Fared Since the Early 1980s?” by Shaohua Chen and Martin Ravallion.  Table 3, p. 28.
In 1997, economist Jeffrey Sachs said, “My concern is not that there are too many sweatshops, but that there are too few.” Sachs and other proponents of sweatshops cite the economic theory of comparative advantage, which states that international trade will, in the long run, make all parties better off. The theory holds that developing countries improve their condition by doing something that they do “better” than industrialized nations (in this case, they charge less but do the same work). Developed countries will also be better off because their workers can shift to jobs that they do better. These are jobs that some economists say usually entail a level of education and training that is exceptionally difficult to obtain in the developing world. Thus, economists like Sachs say, developing countries get factories and jobs that they would not otherwise. Some[who?] would say with this situation occurs when developing countries try to increase wages because sweatshops tend to just get moved on to a new state that is more welcoming. This leads to a situation where states often will not try to get increased wages for sweatshop workers for fear of losing investment and boosted GDP. However, this only means average wages around the world will increase at a steady rate. A nation only gets left behind if it demands wages higher than the current market price for that labor.
When asked about the working condition in sweatshops, proponents say that although wages and working conditions may appear inferior by the standards of developed nations, they are actually improvements over what the people in developing countries had before. It is said that if jobs in such factories did not improve their workers’ standard of living, those workers would not have taken the jobs when they appeared. It is also often pointed out that, unlike in the industrialized world, the sweatshops are not replacing high-paying jobs. Rather, sweatshops offer an improvement over subsistence farming and other back-breaking tasks, or even prostitution, trash picking, or starvation by unemployment.
The absence of the work opportunities provided by sweatshops can quickly lead to malnourishment or starvation. After theChild Labor Deterrence Act was introduced in the US, an estimated 50,000 children were dismissed from their garment industry jobs in Asia, leaving many to resort to jobs such as “stone-crushing, street hustling, and prostitution.” UNICEF‘s 1997 State of the World’s Children study found these alternative jobs “more hazardous and exploitative than garment production.”
|“||(sweatshop critics) say that we shouldn’t buy from countries like Vietnam because of its labor standards, they’ve got it all wrong. They’re saying: “Look, you are too poor to trade with us. And that means that we won’t trade with you. We won’t buy your goods until you’re as rich as we are.” That’s totally backwards. These countries won’t get rich without being able to export goods.||”|
In their Wal-Mart episode, Penn & Teller interview Benjamin Powell, a Professor of Economics from San Jose State University. Professor Powell argues that sweatshop-type jobs in a developing country are often a significant improvement over other employment options (for example, subsistence farming). He further notes that the United States went through its own period of sweatshop labor during its development. According to an article in Gale Opposing Viewpoints in Context, a premier online resource covering today’s hottest social issues, sweatshops became prevalent in the United States during the Industrial Revolution. As new jobs in factories began to appear, people left the hard life of farming to work in these factories. Although the working conditions and wages in these factories were very poor, the agricultural nature of the economy shifted into a manufacturing one because of this industrialization. Through this new industrialized economy, sufficient wealth was created and a large middle class began to emerge. The labor movement came about with this rise in the average level of income and factory workers began to demand better wages and working conditions. Through much struggle, workers and advocates were able to achieve basic rights for workers, which included the right to form unions, and negotiate terms such as wages, overtime pay, health insurance, and retirement pensions; and eventually they were also able to attain legal protections such as minimum wage standards, and discrimination and sexual abuse protections. Furthermore, Congress set forth to ensure a minimum set of safety standards were followed in workplaces by passing the Occupational Safety and Health Act (OSHA) in 1970. These developments were able to improve working environments for Americans but it was through sweatshops that the economy grew and people were able to accumulate wealth and move out of poverty. As Nobel prize-winning economist Paul Krugman states in a 1997 article for Slate, “as manufacturing grows in poor countries, it creates a ripple effect that benefits ordinary people: ‘The pressure on the land becomes less intense, so rural wages rise; the pool of unemployed urban dwellers always anxious for work shrinks, so factories start to compete with each other for workers, and urban wages also begin to rise.’ In time average wages creep up to a level comparable to minimum-wage jobs in the United States.”
In an article about a Nike sweatshop in Vietnam, Johan Norberg wrote, “But when I talk to a young Vietnamese woman, Tsi-Chi, at the factory, it is not the wages she is most happy about. Sure, she makes five times more than she did, she earns more than her husband, and she can now afford to build an extension to her house. But the most important thing, she says, is that she doesn’t have to work outdoors on a farm any more… Farming means 10 to 14 hours a day in the burning sun or the intensive rain… The most persistent demand Nike hears from the workers is for an expansion of the factories so that their relatives can be offered a job as well.”
According to a November 2001 BBC article, in the previous two months, 100,000 sweatshop workers in Bangladesh had lost their sweatshop jobs. The sweatshop workers wanted their jobs back, and the Bangladeshi government was planning to lobby the U.S. government to repeal its trade barriers so the sweatshop workers could have their jobs back.
A 2005 article in the Christian Science Monitor states, “For example, in Honduras, the site of the infamous Kathy Lee Giffordsweatshop 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 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.”
On three documented occasions during the 1990s, anti-sweatshop activists in rich countries have apparently caused increases in childhood prostitution in poor countries. In Bangladesh, there was a closure of several sweatshops which had been run by a German company, and as a result, thousands of Bangladeshi children who had been working in those sweatshops ended up working as prostitutes, turning to crime, or starving to death. In Pakistan, several sweatshops, including ones run by Nike, Reebok, and other corporations, were closed, which caused those Pakistani children to turn to prostitution. In Nepal, a carpet manufacturing company closed several sweatshops, resulting in thousands of Nepalese girls turning to prostitution.
An October 19, 2008 Associated Press article reported about the Chinese citizens complaining about how the current U.S. economic crises had caused them to lose their sweatshop jobs. The article quoted Wang Wenming, who had lost his job at aDongguan sweatshop, as saying, “This financial crisis in America is going to kill us. It’s already taking food out of our mouths.” 
Organizations working on the issue
- Clean Clothes Campaign international alliance of labor unions and non-governmental organizations
- International Labor Rights Fund
- International Labour Organization a specialized agency of the United Nations
- National Labor Committee founded to combat sweatshop labor and US government policy in El Salvador and Central America.
- Green America membership organization based in the United States
- United Students Against Sweatshops a student organization in the United States and Canada
- Free the Children A Canadian organization that helps raise awareness and put a stop to Child Labour – Also helps other children in need.
- Reason Foundation Founded in 1968, Reason Foundation is a nonprofit organization advancing “free minds and free markets.”
- Not for Sale Campaign