Free to choose

Most people write off what is called “sweatshop” labor as a closed subject. They see it as an evil practice – low wages for long hours in unfavorable conditions. But the reality of the issue is far more complex, and often, the more one intervenes to try and help, the worse the situation gets. \nIt’s imperative to remember that low-wage laborers agree to work under these conditions because it is their best option. However, boycotting over low wages forces business to shut down factories and provide fewer jobs. Workers are paid the market value of what they produce, and were their wages to be artificially raised through social coercion, companies would be forced to hire less people. “You can demand someone be paid more, but you cannot demand that what they produce be more valuable,” said Peter Olson, an IU professor of economics. Estimates for the elasticity of labor demand at plant level put the ratio of percentage wage increase to job loss at anywhere from 1: 0.93 to 1: 1.4 in the long run, he said.\nSome people would counter this with the suggestion that companies who use this labor, such as Nike, should simply cut into profits and pay their workers more. But textiles is a competitive industry, and if a company has to pay higher wages, it might as well not go to poor countries at all. What is the use of doing business in Sri Lanka if the advantage of employing workers who demand only a small wage is prohibited? Then, the best option these poor workers once had is gone. It’s their best option for a variety of reasons, but it’s mainly the money. “U.S. companies doing business in the third world typically pay wages that are two times the local wage,” Olson said. \nSo why the poor conditions, why the long hours? \nWell, the fact that people want these jobs shows they are superior to their other options. Farming can be unreliable and just as physically taxing. The amount of people without even the option to farm are often reduced to begging or digging in the trash. Plants operate at a bare minimum of operating costs because contracting with large companies is so competitive. People want these jobs badly enough that they’re willing to endure such conditions. If people want these jobs and are willing to endure the conditions, is it our place to take them away? \nOver time, these low-wage laborers can improve their lot. When many companies create jobs in a country, it creates the need for specialized worker skills and creates competition for employees, both of which raise wages. \nThis view isn’t something you hear advanced very often. Especially in a college environment, people often opt instead to cast labor relations as a human drama in which there are villains and the oppressed. But low-wage laborers do not need to be shepherded, they need to be given the freedom to choose. When you intervene, you take this away from them.