In many third world nations, production labor is the major source of employment. Scattered throughout Asia, South America and other nations, factories produce many consumer products. Among the many items produced are toys, clothes, footwear, car parts and school supplies. Many of these factories are labeled as sweatshops. A sweatshop is a factory where working conditions are harsh and pay is low. A worker in the Chinese Tianjin Yuhua Garment Factory earns approximately 23 cents USD per hour. Some factories pay even less. Working conditions in sweatshops are usually quite difficult. The working day is long. Employees must work overtime when needed. They are rarely paid overtime wages. In most sweatshops, inexpensive products are produced. Then they are sold to distributors for a good profit. Profits, however, go to the factory owner and not the workers.

CS Question #1: What is a sweatshop?

Sweatshops have existed in one form or another since the beginning of commerce. In the early 20th century , there were many sweatshops in the United States. There were no laws to protect the workers -nothing to guarantee their rights for decent wages and safe working conditions. Upton Sinclair wrote his novel The Jungle to protest conditions in early U.S. factories. Today, modern sweatshops are usually found in third world nations, where there are few regulatory laws concerning the production of goods.

The sweatshop is spawned from a number of conditions. One is the quest for profit. Factory owners try to produce goods at a low cost and sell them at the highest possible market price. This allows them to maximize their profits. In order to produce the most inexpensive goods possible, owners may cut wages, extend the workweek and eliminate expenses for worker safety.

Sweatshops have also developed as a result of increased, fast-paced international trade. In order to participate in international trade, third world nations must develop industries before they are capable of regulating them. Many retailers are unaware of the source of the goods they buy. Because international trade has increased, the retailers cannot determine the exact factories that produce the goods they carry on their shelves.

CS Question #2: Why do sweatshops exist?

Sweatshops have many critics. Many individuals feel that factories in developing nations exploit and endanger workers. Some corporations are accused of using trade agreements, such as NAFTA, to exploit developing economies to increase corporate profits. By moving production overseas, companies avoid the higher costs of labor in the United States. For example, in a developing nation, corporations do not pay union-scale labor. They are not subject to governmental regulation fees or increased salaries due to labor competition. Some critics argue that sweatshops are not an inevitable factor of doing business. Instead, they are created on purpose to further corporate profits.

CS Question #3: How do corporations save money by moving their production facilities overseas?

Corporations defend the fact that they use low-cost labor from developing nations. Some argue that sweatshop factories are unavoidable, produced by economic growth and free markets. As markets expand, more production is necessary. Greater amounts of production cut into profit margins. The factories must cut their costs in order to keep a sustainable profit. Sweatshops exist due to consumer demand for many inexpensive products. Corporations also argue that they are providing jobs in the third world. Without the corporations, those jobs would not exist. With the creation of jobs, the local economy benefits and begins to develop. After many years, U.S. sweatshops were eventually closed. The government developed labor laws and safety regulations. Workers unionized and eventually working conditions improved. It is hoped that the same will occur in developing nations.

CS Question #4: How do corporations defend sweatshops?

Further Thought:

1. In your opinion, are sweatshops an unavoidable occurrence in third world nations? Or do you think corporations create sweatshops to make a profit?
   
2. Should retailers be responsible for knowing the source of the products they buy? Why or why not?
3. Do you think the development of third world nations will eliminate sweatshops? Explain your answer.