When we buy cheap clothes and accessories made in developing countries, are we supporting a developing economy or taking advantage of underpaid workers?

Fast fashion has become engrained in our society and being current is now weekly, versus previously seasonally. Cheap clothes, shoes, and accessories have become a must to keep up with these trends. The cost of these clothes make consumers able to rid their closest of last weeks styles just as fast as they made the decision to buy it, which in turn leads to more purchases. This obsession by society to have the newest, latest and greatest is inexpensive but comes at a high ethical price. There are two sides to every argument. Are these cheap fashion items being made in developing countries taking advantage of and exploiting people, or are these fashion companies providing jobs and a better economy for a struggling society?

In the western world it has become well known that many large corporations outsource their factory operations to China. There have been many movements over the years to boycott clothes made in China, or for that matter, anything made in China. However, on April 24, 2013 a factory in Bangladesh collapsed killing more than 1,130 people. Many people in the western world had no idea that potentially every piece of clothing they were purchasing was being made not in China but in places such as Bangladesh, Vietnam, or India. Bangladeshi journalist Zafar Sobhan commented, it is this dehumanizing, soul-destroying, exploitative trade that has provided employment to over 3 million impoverished Bangladeshis, the vast majority of them women, and utterly transformed the economic and social landscape of the country. In the 40 years since independence, the poverty rate has plummeted from 80 percent down to less than 30 percent today, GDP growth has averaged around 5-6 percent for over 20 years, and the garment industry has had a lot to do with it. This statement within itself is conflicting. He states that it is dehumanizing, soul-destroying, and exploitative but then touches on the positive it has done for the economy.

This shines light on the fact that there are two reasons for concern pertaining to overseas factories. The human rights side which only looks at how the workers are being treated and paid; and the business side which only looks at how the economy of the country may actually be improving by the factory being there, as well as being financially efficient for the company employing the workers. Comparing the two is in some sense a conflict of interest. As the workers work longer hours, make less money, and take fewer breaks, the margins of the business strengthen and the business owner in turn makes more money. On the flip side the more workers are paid and more time off they are given, the smaller the margins become and the business grows less efficient. However, looking at the sides as a whole is the only way these issues could have a resolution.

Benjamin Powell and David Skarbek have become known as sweatshop experts. They state that numerous studies have shown that multinational firms pay more than domestic firms in Third World countries. Economists who criticize sweatshops have responded that multinational firms’ wage data do not address whether sweatshop jobs are above average because many of these jobs are with domestic subcontractors. We compare apparel industry wages and the wages of individual firms accused of being sweatshops to measures of the standard of living in Third World economies. We find that most sweatshop jobs provide their workers an above average standard of living. This data only supports the economics of the activity it does not address the possibility of these workers not being compensated. There are also dangers of the job that would require health benefits to pay for health care due to work place injuries or sicknesses. Powell and Skarbek go on to dicuss that most of the scholarly work on sweatshops is not done by an economist but a human rights activist. Again, providing only one view of the situation. Acitivists while not wrong that there are human rights and ethical issues with these sweatshops can tend to look at the situation with a narrow scope. Writing their scholarly articles on computers, with access to anything and everything. They assume that because they have a better alternative to working in a sweatshop that so must the people working in these sweatshops. But in many cases, that is wrong pointed out by Zafar Sobhan. These factories are actually improving many aspects of the country.

Gethin Chamberlain in Bengaluru who reports on human rights reported that workers in a high end clothing factory in India are paid so little that an entire months worth of wages could not purchase even one of the garments they are producing. Chamberlain reports on statements from women testifying to being treated worse than animals, physically and verbally abused. These women also state that the reason for this treatment was due to not meeting work quotas, which in turn resulted in loss of wages. In the western world, if you continually underperformed at your job, you would eventually be fired. Abuse is wrong; however dealing with underperformance of employees is necessary in any business.

 In the western world it is the companies obligation to treat and pay all workers fairly adhering to national standards. If there was a problem an employee could contact human resources. However, human resources does not exist for these wronged factory workers and that is why it has become an international topic of discussion. The debate continues, are these cheap fashion items being made in developing countries taking advantage of and exploiting people, or are these fashion companies providing jobs and a better economy for a struggling society?