In the industrial era, sweatshops exploitation is a serious issues that happening in developing countries such as India, Indonesia, Bangladesh, and China. Contemporary, global labor practices raising public awareness to debate about it regarding globalization. Sweatshops exist in a variety of industries most of that are apparel, footwear, electronics and toy making. Sweatshops are much practicing by apparel and footwear manufacturers such as Nike and Gap Inc. Apparel retailers mostly contracting out their production to the contractor apparel industries in developing countries and so companies just concentrated on product design and marketing then rely on contractors to deliver quality products thus less concentrate on labor issues in factories. Companies are pursuing cheap labors around the globe and aiming to lowest the cost of production hence manufacturers and their contractors exploiting the workers in the developing countries. Sweatshops exploit the workers in various ways such as paying them fairly low wages for long working hours per day in unsafe conditions, restricted for toilet break, coercion, deception, etc.
Pros and Cons of Sweatshops
Some economists debate that the existence of sweatshops in developing countries is critical for their economic development. Multinational countries (MNCs) employ cheap labors in developing countries is usually beneficial because the wages is much higher than the local works and sweatshops improve their standard of living. Some other economists have another view and argue that sweatshops in developing nations should not be tolerated and should enforce law to restrict the use of sweatshops and set a minimum of wages standards for the local workers to improve their living. MNCs are under pressure to increase the wages, improve health and safety standards, and working environment standards in their operation outside home country and also operation of suppliers and contractors. So far there are many arguments on sweatshop issues, some of the economists perceived sweatshops as a beneficial to the developing countries’ economic and their local workers but other economists may viewed it as a violation of human right of workers. Hence, there are pros and cons for sweatshops.
Many studies have shown MNCs are paying higher than domestic companies in the developing countries. Apart from this, many economists argue that sweatshops raise the standard of living in the developing countries and also economic development. Powell and Skarbek (2004) found that sweatshops improve the standard of living and provide an above average wages for their workers relative to the domestic works in third world countries. According to the research, apparel industry average pay is exceeding the average income per worker compare to those who work more than 10 hours per day (Figure 1). Another data demonstrate that workers who work exceeding 10 hours a day earning $2 a day which earn an average above 30% to those who living...