Sweatshops are workplaces run by unscrupulous employers who pay low wages to workers for long hours under unsafe and unhealthy conditions. For example, in a clothing sweatshop in California in the early 2000s, Asian women sewed for ten to twelve hours per day, six or seven days per week, in a dim and unventilated factory loft where the windows were sealed and the emergency doors locked.
The workers had no pension or health-care benefits and were paid at a piece rate that fell far below the legal minimum wage. When the company went bankrupt, the owner sold off the inventory, locked out the workers without paying them, moved his machines in the middle of the night to another factory, and reopened under a different name.
The term “sweatshop” is derived from the “sweating system” of production and its use of “sweated labor.” (Gibson, 67) At the heart of the sweating system are the contractors. A large company distributes its production to small contractors who profit from the difference between what they charge the company and what they spend on production. The work is low skilled and labor intensive, so the contractors do best when their workers are paid the least. Workers employed under these conditions are said to be doing sweated labor. (Elliott and Freeman, 144)
Sweatshops are often used in the clothing industry because it is easy to separate higher and lower skilled jobs and contract out the lower skilled ones. Clothing companies can do their own designing, marketing, and cutting, and contract out sewing and finishing work. New contractors can start up easily; all they need is a few sewing machines in a rented apartment or factory loft located in a neighborhood where workers can be recruited.
Sweatshops make the most fashion-oriented clothing women’s and girls’ because production has to be flexible, change quickly, and done in small batches. In less style-sensitive sectors men’s and boys’ wear, hosiery, and knit products there is less change and longer production runs, and clothing can be made competitively in large factories using advanced technology.
“Since their earliest days, sweatshops have relied on immigrant labor, usually women, who were desperate for work under any pay and conditions” (Singh and Zammit, 196). Sweatshops in New York City, for example, opened in Chinatown, the mostly Jewish Lower East Side, and Hispanic neighborhoods in the boroughs. Sweatshops in Seattle are near neighborhoods of Asian immigrants.
Sweatshops, commonly defined today as workplaces violating multiple labor laws, have always been a part of the economic landscape, as have attempts to eliminate sweatshop conditions. Public outrage following the 1911 Triangle Shirtwaist fire in New York, for example, led to creation of a Factory Investigating Commission and the passage of thirty-six laws reforming the state labor code. U.S. federal labor law is embodied in the Fair Labor Standards Act, originally passed in 1938.
This act, too, responded to the prevalence of poor working conditions, calling for elimination of “conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers” (Elliott et.al. pp. 154). Recent laws such as the U.S. Victims of Trafficking and Violence Protection Act of 2000 extend protection from exploitative practices. (Gibson, 70)
Internationally, the 1998 United Nations Declaration on Fundamental Principles and Rights at Work provides the foundation for global labor standards. The Declaration defines four core types of labor standards: freedom from forced (trafficked) labor, nondiscrimination, abolition of child labor, and freedom of association/collective bargaining.
Additional standards appear in the United Nations Anti-Trafficking Protocol, which recognizes that trafficked workers are victims of a crime and not illegal immigrants.
Despite these laws and agreements, violations of labor standards like those exposed by the Triangle fire persist and may well be increasing with globalization. “In the United States sweatshop production is closely related to international flows of labor. Sectors such as agriculture, services, and clothing, in which immigrant labor constitutes larger shares of the workforce, are most likely to violate labor laws”. (Singh and Zammit, 193)
While the extent of trade globalization as a new phenomenon is a subject of much debate, developing countries indisputably have only recently become major producers and exporters in such labor-intensive sectors as clothing and electronics. As a result, both wages and non-wage labor costs are lower than in rich countries. While labor costs are not always the only or even primary reason companies move out of developed countries, for labor-intensive firms, moving offshore and subcontracting to informal producers clearly have become key elements of competitive strategy. (Pollin, 153)
That sweatshop conditions still exist even in the United States is evidence that economic incentives for violating labor standards can be compelling to employers facing competitive threat. Opponents to sweatshops, recognizing the economic incentive to firms of low labor standards, have focused on raising the cost of using sweated labor.
“The International Confederation of Free Trade Unions and national trade unions emphasize ratification of and compliance with existing national and United Nations labor standards”(Pollin, 158). Additional pressure comes from popular anti-sweatshop movements, often supported by trade unions that target consumers. By exposing sweatshop producers and encouraging consumer boycotts, these movements hope to raise the cost of exploitative labor practices.
The fight against sweatshops is never a simple matter; there are mixed motives and unexpected outcomes. For example, unions object to sweatshops because they are genuinely concerned about the welfare of sweated labor, but they also want to protect their own members’ jobs from low-wage competition even if this means ending the jobs of the working poor in other countries. Sweatshops are unacceptable because they exploit and endanger workers.
The intense low-cost competition spurred by the opening of world markets is creating a resurgence of sweatshops in the United States. The response has been a large and energetic anti-sweatshop movement aimed at greater unionization, better government regulation, and consumer boycotts against goods produced by sweated labor.
But despite the historical rise and fall and rise again of sweatshops in the clothing industry, their fundamental cause remains the same. The sweating system continues because contractors can profit by offering low wages and harsh conditions to workers in the United States and abroad who have no alternatives.
Elliott, Kimberly Ann and Richard B. Freeman. Can Labor Standards Improve under Globalization? Washington, DC: Institute for International Economics. 2003: 144-156.
Gibson, William. Monitoring Labor Standards in a Macroeconomic Context. In Interactions in Analytical Political Economy: Theory, Policy, and Applications, ed. Mark Setterfield, Armonk, NY: M.E. Sharpe, 2005: 67–70.
Pollin Robert, Justine Burns and James Heintz. Global Apparel Production and Sweatshop Labor: Can Raising Retail Prices Finance Living Wages? Cambridge Journal of Economics 28 (2), 2004: 153–158.
Singh, Ajit and Ann Zammit. Globalisation, Labor Standards and Economics Development. In The Handbook of Globalisation, ed. Jonathan Michie, Cheltenham, U.K.: Edward Elgar, 2003: 191–196.