I went to a panel the other night called ‘Sweatshops: good or bad” or words to that effect. The economic arguments for sweatshops (i.e why they are good) are very much the same as those used to justify slavery, equal pay for women (and now youth) and everything else that involves some form of exploitation:

• Sweatshops help developing countries develop by bringing in revenue
• Sweatshop workers are actually overjoyed to be working in a sweatshop because their only other option is unimaginably bad
• Increased costs due to paying a living wage to factory workers in developing countries would add to the price of things here, or put the businesses out of business

The reason I am writing this is because I’m quite frankly appalled. This was a discussion held at a university and by the end a good number of people actually thought sweatshops were fine and in fact we should have more of them.

I wanted to ask the guy from the Business Round Table if he’d have the same arguments for sweatshops if he was given the choice of getting rid of them or working in one himself. I suspect if this was the case, economics would fly out the window. However, this is not a ‘political blog’, so I’ve put some thought into how small businesses can lead the way to running ethical business and why we should. So I’ll answer those economic arguments for you :)

Sweatshops help developing countries develop by bringing in revenue

Paying people a living wage would bring more revenue into the country. If we are dying to live in a globalised world, we need to accept the responsibility of becoming global citizens.

Abolishing child labour was used as an example of how laws setup to help people end up harming them - unemployed children turned to prostitution and hard labour. The simple way to get around this is to pay their parents more.

You could double the income of workers in some developing countries by paying them $2 more a day. You could ensure your workers work in a safe and healthy environment and can live off their earnings from a 40 hours week. You do have that power, it is up to you to push the issue.

Sweatshop workers are grateful for the opportunity

I never understand the logic of expecting the poorest and least powerful people in the world to come up with their own options. This argument makes me feel a little ill, we are THANKING ourselves to taking advantage of people with no other option. WE are responsible for creating options, and I see 3 clearly:

• Be unemployed/a prostitute/work in hard labour
• Work in a sweatshop that pays $2 a day
• Work in a factory that pays $4 a day

It’s up to us to provide that third option. So do it. Other people are. I think you’ll find that your workers are much more overjoyed when they don’t have to work 12 hours a day 7 days a week just to survive.

Increased costs lead to closed businesses

I’m sure you’ve all heard that in the course of one year, Michael Jordan got paid more than every single Nike worker in Indonesia combined. You may have also heard that people used to be told that without slavery the British economy would collapse, but have you heard that doubling the salary of a sweatshop worker would generally increase the price of a pair of jeans by about $2. As a consumer, I don’t think I’d notice the difference between $185 and $187.

The old business model is changing. These days it is less logical to pay the minimum for production and have a massive advertising budget. More and more people buy stuff due to word of mouth, and word of mouth is free and hinges on having something to say. Can your customers tell their friends that your product is ethically produced? Can you cut your marketing budget by raising the quality of your product?

Big companies like IKEA have decided at long last to treat ALL their employees the same as they treat the ones in their own country. I doubt they’re going out of business.

Why it’s so important

When examples of business who are doing the right thing were mentioned, we were told that New Zealand wouldn’t be looking at making it compulsary for all companies to follow suit, I believe the idea was laughed at. It was a very strange feeling, sitting in a room while people talked academically about the suffering of others in relation to economies.

I’m no economist but I feel the arguments for sweatshops just aren’t that great. We’ve heard them before, they’ve lost before, and the world has gone on to be a better place for it.

I know sometimes morals are a pain, but imagine if you MET the guy whose exploitation your profited off. I also know the issue goes much wider into consumption and choices we can all make. I’m just not sure if that topic fits in this blog.

I’m sorry if this sounds like another lecture coming from someone who doesn’t personally have to change my business at all. I’m interested in hearing the difficulties that making this change would involve or barriers making it unreasonably difficult. I just feel that we can’t keep justifying the impossibly bad treatment of others with dry economic arguments. They are people after all.