Vol.4, No 1, 2016 ISSN 2303-5005 SWEET SWEATSHOPS - A REFLEXION ABOUT THE IMPACT OF SWEATSHOPS ON COUNTRIES’ COMPETITIVENESS

Jean-François Rouge Ecole Supérieure de la Francophonie pour l’Administration et le Management, Sofia, Bulgarie

DOI 1515/eoik-2015-0023, UDK 339.727.22/.24(1-773) Review paper

INTRODUCTION terminants of the welfare of all persons who have membership in an economic nexus. Still “Plainly put, first of all, decent people don’t sooner, as early as the XVIIIth century, mon- want to live in and support a society that is at tesquieu (1748) explained us that the more a variance with what they take to be basic mor- society is developed, the less physical causes al principles. (…) The second reason why one’s impact on them, the more moral causes gov- social system should have moral backing is that ern it. society without it is vulnerable to many critical Within the diverse ways business is able to and sceptical influences” (Machan, 2007, p. 10). impact our day live, one of the most important Tibor R. Machan insists: today, western is how it precludes to the organization of our people want to live in a honourable1 world. working conditions. Few things are govern- Anthropologists like A. Peyrefitte (1995) and ing our standard of living and our comfort so Bm. Friedman (2005) demonstrate that the much, that those linked to our work: the sal- level of morality of a society is closely linked ary, off course, but not only. They determine with its level of economic development. The our social statute, our level of social protec- authors describe the way through which eco- tion, numerous accessories of the salaries, nomic growth induces the elevation of moral … (castel, 1995). That is why so many laws aspiration of individuals, but also of commu- and institutions do care about the conditions nities. As business is a basement of the eco- of work; even in emerging countries.2 That is nomic development, we can induce that it why, International Labour Organization (ILO) constitutes an important part of our modern never ceases to remind us, that “work is not social order. In fact many researchers, like a good”3 and UN labour agency (2005) calls K. Weick (2000), consider that, the way it is for “decent work in inclusive and equitable done, has a great impact on the feeling we ex- globalization”; and of course, why Europe, in perience, about the meaning of our own live. the article 31 of the European Chart on fun- Business seems to be “a profession for human damental Rights edicts “the fair and equitable wealthcare” (Machan, 2007). In fact, business conditions of work”… Everyone is consider- ethicists largely consider that business has to ing situations like those described by Zola, in be a moral activity… even if they radically Germinal:4 dehumanizing, demeaning and de- disagree about the means to pursue this goal, moralizing working conditions that often cost considering the school of thinking to which workers their health and sometime their life, they belong. as a sad reality forever forgotten. Yet, this idea is not new. It was previously This is a false impression. Unfortunately, expressed by the Nobel Prize winner in eco- for our research of respectability, wealth’s nomics, J. Buchanan (1994, 1) who wrote that 2 For Example, even CHINA, adopted a new regulation ethical norms or principles are relevant de- about labour law, which took effect on January first, 2008. 3 General Conference of ILO (2002): Recommendation 193 1 As an ethical concept, the notion of honor presumes that for the promotion of the cooperatives there is a set of norms against which the question of whether 4 E Zola (1885), GERMINAL, was inspired by the great or not an intended action is honorable can be assed.(Arnold strike (12 000 miners), which belongs 56 days in the coalm- & Hartman, 2005, p. 214). ine of Anzin (France) from February 19, 1884.

© Oikos institut Bijeljina 7 J. F. Rougé: SWEET SWEATSHOPS. A REFLEXION ABOUT THE IMPACT OF SWEATSHOPS... accumulation trends, financial and business ican idea that periodically appears, disap- scandals in the past few years, are at least pears and resurfaces in the mind of people. troublesome...The simple fact of opening a The author tells us that the word comes from newspaper or switching on TV sets, remind us the end of the nineteenth century, when it re- that the worst is still a XXI° century’s reality. place the usual appellation “sweated labour” A quick research shows that poorest working or “sweating system”, or else “system of sub conditions are not even practices only locat- contracts”: “Well before the industrial rev- ed in far-off lands! In fact, nothing seems to olution the word “sweater” had entered the have changed since the XIX° century. For language to describe “one who works hard, a example, in 2013, the collapse of Rana Pla- toiler, a tailor who work overtime at home for za garment factory in Bangladesh still killed: an employer” (2004, p. 17). 1100 persons this time (powell, 2014, 105)! Is As if continental Europeans refute the exist- business out of (self) control, like suggested ence of such a phenomenon, at least since the by J. E. Stiglitz (2002; 2003; 2006)? Do we, end of the XIX° century, it seems that there is as human being, have to accept everything no correct translation of such an idea in others for profit? The great crash of September 2008 languages like French or German. For exam- seems to comfort those affirmations. Since, ple, French generally call them “ateliers clan- inequality is still more growing through the destins” which is far from the genuine idea. word, and it is becoming a major problem for The question is of huge importance; in fact, 5 economic stability. It is enough, to re-open one of the major reasons for continued exist- (once again) the question about sweatshops. ence of sweatshops may have to do with our But first of all, it is important to define that inability to identify and name them as such word.6 (Radin, 2006, p. 262). The point is: the concept of sweatshop An essay to define sweatshops grounds both on historical, legal, social and moral meanings. As précised by M. Zwolin- “Sweatshop” is one of those commonly ski (2006), ultimately, the precise meaning of used words whose meaning varies greatly the term will vary depending on the context. among users. For Laura Hapke, it is an Amer- Some of them are describe in the table below. Table 1 Definitions of Sweatshops

Sources Definitions of Sweatshops AFL-CIO Union of needle Sweatshops are “places of employment with “systematic violation of one or trades, industrial employees more fundamental workers rights that have been codified in international and (Hartman, Shaw and Steven- US laws” son, (2003, p. 194). Brown Tom (1996, p. 12) (taken literally) Sweatshops is a 19th century terminology describing workers forced to endure long hours at millstone work accompanied by wretched work conditions and low pay. In England in the 1850s, a sweater was an employer or middleman who hired cheap labour, then abused them with deadly, monotonous work Encyclopedia Britannica Sweatshops are a set of workplaces practices “in which workers are employed (1999) for long hours at low wages and under unhealthy or oppressive conditions”

Note: Table 1 continued on next page

5 Problèmes économiques (2016), N°3129, Mondiali- sation et inégalités, La Documentation Française, Mars 6 When asking for” sweatshops”in Business Source Com- plete, data base, the are only 725 answer, of which only 249 come from academic papers. (up to date April 2016).

8 J. F. Rougé: SWEET SWEATSHOPS. A REFLEXION ABOUT THE IMPACT OF SWEATSHOPS...

The Interfaith Centre on Cor- Determines that “a factory may be clean, well organized and harassment free, porate Responsibility unless its workers are paid sustainable living wages, it’s still a sweatshop” Radin, T. J. and Calkins, M. We rely upon a fairly representative description of sweatshops as work environ- (2006, p. 262) ments that violate law and where workers are subject to: 1- Extreme exploitation including the absence of living wage or long hours work; 2- Poor working con- ditions such as health and safety hazard; 3- Arbitrary discipline, such as verbal or physical abuse; and/or 4- Fear and intimidation when they speak out, orga- nize, or attempt to form unions. Zwolinski, M. (2006, p. 4) “It is in the apparel industry that the form of production we now think of “sweat- shops originally took form (…) This system of production, where apparel is pro- duced in small amounts and only when demand is relatively secure, is another reason that most apparel production has not been mechanized (…) Thus the risk is passed from retailer to manufacturer to contractor and subcontractors, until ultimately, it is borne by the individual workers US General Accounting Office A sweatshop is a place of work where an employer “violates more than one fed- eral or state labor, industrial homework, occupational safety and health, work- er’s compensation, or industry registration law”

The definition of Radin and Calkins, will be ever, the multiplication of people committing used as a basis for this study. suicide on their work place,9 the burgeoning 10 However, a more contemporary approach of trials for harassment, and the huge devel- of sweatshops can be envisaged to complete opment of the feeling of general discomfort, those “classical” definitions. Developed by T of stress or of nervous breakdowns at work, Brown (1996), it is maintained that “today’s seems to forbid too quick a rejection of such sweatshop is not so much a physical night- an approach. It should certainly be the subject 11 mare, but many would argue that it is hav- of further researches. ing much the same results via psychological According to the mainstream, sweatshops routes” (1996, p. 16). For Brown, there is are wrong for a host of reasons. They perpetu- little emotional difference between a 1890’s ate the violation of basic human rights (Radin, unskilled worker, who is made feel expand- Calkins, 2006, p. 261) and promulgating men- able and a 1990’s worker with three college tal and physical abuse, they contradict our con- degrees, who is made to feel exactly the same; sidered notions of basic morality and strategic mainly after a downsizing of their firm (1996, business purpose (Arnold, Hartmann, 2003). p. 17). To support his arguments, he leans Yet, the purpose of this work is not to discuss back against interviews as this one: “We’re all further the morality of sweatshops; philosophers starting to see some of the costs of unlimited like Zwolinski (2007) have done it much better. cost-cutting. I guess this is our generation’s The main objective of this study is to wonder definition of sweatshops”.7 Amazing, this idea about the economic utility of sweatshops. Are is nevertheless interesting.8 Of course, except they essential to people who work in?; for their some rare cases, physical deplorable working countries to growth up?; for the global indus- conditions of XIX° Century are gone, at least try to maximize its earning? In other economic in the west. But, may we aggregate psycholog- ical pressures to physical distress? More and 9 Suicides linked to the work of people, are common since a very long time, and history points out many cases during more sociologists and psychologists warn us the Great Depression. But according to the sociologist Pierre about psychological pressure at work! How- Cam (Dep. of Sociology, University of Nantes, France), com- mitting suicide inside the firm, on the work place, is a new 7A VP in an East Coast financial services corporation, con- practice, very charged of sense making, that necessitate ur- demning the direct result of downsizings and outsourcings, in gent studies. Tom Brown, Sweatshops of the 1990s, Management Review, 10 At the beginning harassment was mainly a sexual offence; 1996, p. 12. more and more it becomes a moral one. On this question see 8 This idea is comforted by the papers of Zwolinski (2007, p. Mf Hirigoyen (2000; 2004). 710) and Arnold and Bowie (2003, p. 231) 11On this topic see Anne and Marine Rambach (2009)

9 J. F. Rougé: SWEET SWEATSHOPS. A REFLEXION ABOUT THE IMPACT OF SWEATSHOPS... words, the question is to wonder if sweatshops sweatshops systems on the economic growth may be short run Paretian efficiency, favourable of the developing world (1) and the defence to the development of both trade and less devel- of sweatshops as an antipoverty weapon (2) oped countries; if they may be a factor of com- petitiveness? Sweatshops: A tool for economic Whatever the hypothesis, it seems that con- growth? temporary sweatshops are a by-product of globalization. Free market mechanisms it im- Slow economic growth16 or worst, econom- plies promote a great flexibility of work and ic recession, are critical harms for most of the induce a large deregulation of labour laws all developing economies. They directly contrib- around the world. Work, and more precise- ute to the poor living standard of populations. ly, low cost work, is seen as one of the main One of the main problems for those countries competitive advantage of the firms and even is that incomes have to grow faster than the of the nations. So is it interesting to analyse population to allow the well being of people. the actual participation of sweatshops to the One commonly accepted way to express the global competitiveness (1) and to illustrate rate of growth of total output in the econo- the limits of this position (2) my, can be expressed as the sum of the rate of hours worked, and the growth rate of pro- SWEATSHOPS: AN INSTRUMENT OF ductivity: the output per hour work (Stiglitz GLOBAL COMPETITIVENESS? and Walsh, 2002, p. 218). On this base, one interesting instrument to study the desira- Il y a des conditions sociales à la poussée et à la ble level of growth rate is the OKUN’s law réussite du capitalisme” (Braudel, 1988, p. 77).12 which empirical validity over long period A quick look at developing countries, which seems to be a consensus (Prachowny, 1993; narrowed the gap with western high-income Weber, 1995; Moosa, 1997; Attfield, 1998). countries, shows that they have generally done so This law is a macroeconomic tool that de- by simultaneously raising wages and expanding scribes the relationships between output and employment opportunities (Heintz, 2004, p. 222). unemployment, hence relating the level of They succesfully activate the social conditions of activity in the goods market, to the level of the capitalism succes. Facing this constatation, activity in the labour market over the business one can wonder if sweatshops are a solution cycle (Silvapulle and Mervin, 2004, 354). In 17 to the huge necessity of growth of most of the practice, the relationship seems asymmetric southnern countries. Even if only few scholarly 13 16 For a global approach of the theories of economic defences of sweatshops have been published, growth see Abraham-Frois (2001, 1977, 1974). Peyrefitte some economists seem to think that the world (1995, p. 406) identifies 12 criteria of development: 1- The needs more sweatshops (Walker, 2006). social mobility; 2- the acceptation or better, the research Would sweatshops be, not only the evil that of innovation; 3- the homogenization of the society; 4- 14 the tolerance to new ideas founded on the pluralism; 5- a pro-Marxists economists and antisweatshop bet on the instruction as a confidence in the intellectual movements denounce? Even if outrageous development and in the cultural diffusion; 6- the search excess occur, that should be condemned,15 in for a legitimate political organization; 7- the autonomy of fact, numerous arguments have been tested in the economical sphere; 8- a cooperative economy which the literature to justify the practice. Among exclude as few people as possible; 9- the recognition of public health as essential; 10- a controlled and reasonable them, two of the most serious are the impact of birthrate; 11- a rational food supply furnished by a free 12 That may be translate : There is social conditions to the and competitive market and 12- a control of any kind of thrust and to the success of capitalism. violence through the police and the justice. 13 Exceptions: Zwolinski (2007), Maitland (1997), Powell (2014). 17 In fact, contemporaneous effects of GDP growth on unem- 14 According to DG Arnold (2003, 244) , that is mainly the ployment is significantly higher in recession that in expansion case of Wertheimer. and the shocks to unemployment tend to be more persistent in 15 See the second part of this study. the expansionary regimes (Cuaresma, 2003, p. 440)

10 J. F. Rougé: SWEET SWEATSHOPS. A REFLEXION ABOUT THE IMPACT OF SWEATSHOPS...

and non-constant due to the specificities of of progress for the sake of what amounts to each country (Sögner, 2000). But a correla- an aesthetic standard.” (1999, p. 85) Far tion may be demonstrated between economic from those theoretical points of view, Moran growth and employment. Furthermore, Hazlitt (2002) reports many empirical cases of coun- (2006, p. 123) affirms:there “ is no limits to tries, or economic areas, which succeed in quantity of work possible. Work creates work” this way. They began to create sweatshops. and hence the virtuous circle of the growth. Slowly, work became more and more special- ised and richer and richer, to attain the lowest Based on those economics relationships western standards; they succeed to develop. many politicians and intellectuals of the de- It can be remembered that, as soon as 1776, veloping countries consider one only priority: SMITH, in the Wealth of Nations, located create jobs. No matter their quality, no matter and acknowledged the main sources of the their safeness. The only thing that matters is productivity of an economy, as the efficient to generate them as many and quickly as pos- exploitation of the division or/and the special- sible. Existence of sweatshops may be a good ization of labour. means to create jobs, even the worst one.18 It may be a (THE) tool of growth, as it has been Here lies a dichotomous argument of the a lever of growth, in the western countries, contribution, or at least to the durable con- during the XIX° century. The point here is to tribution, of sweatshops to the sustainable wonder if sweatshops are still the inevitable growth of countries. Jobs, even terrible jobs, featuring of economic development that so provide some positive externalities for a so- many economists retort? 19 ciety, benefits that accrue to others who are not parties to the transaction between a la- The answer seems to depend on the eco- bourer and employer (Arnold and Hartman, nomic theory mobilized. 2005, p. 208). In the short run, sweatshops The mainstream seems to consider that contribute to the under-utilization of labour “Sweatshops are a necessary condition to resources: people are often kept in igno- the economic development. Here is the view rance and low economic and sanitary condi- that, left to their own devices, market pres- tions to maintain the best-cost competitive- sures will gradually increase productivity, ness process of production. The main aim ease sweatshops conditions, and push up is to accumulate capital. If this situation is adult wages, which will in turn allow families transitory, an enrichment of work and some to support their children and eradicate child education is provided to workers and per- labour” (Varle, 1998). In fact, most econo- mit the accumulation of knowledge. People mists view, so-called sweatshops as a benefit may then access to more specialized and, to the Third World workers and recognize that as a result, to better and more competitive the anti-sweatshop activists’ behaviour could jobs in the international division of work. reduce Third World employment and invest- On the opposite, if the situation is stable at ment, thus making workers worst off (Powel the lowest level, the firm and its works may and Skarbek, 2006). For Krugman, “As long decline facing the competition of new com- as you have no realistic alternative to indus- petitors with even lower costs.20 Further- trialization based on low wages, to oppose, more, a firm’s attempts to increase profit by it means that you are willing to deny desper- keeping wages below the amount by which ately poor people the best chance they have the employee’s labour increase profit, and 18 Considering the western value of what is a good job. 19 ”As long as you have no realistic alternative based on law by imposing unappealing and intolerable wage, to oppose its means that you are willing to deny des- working conditions, should damage its abil- perately poor people the best chance they have to progress ity to attract the kind of workers that the for the sake of what amounts to be an aesthetic standard- that is the fact that you don’t like the idea of workers being paid a firm needs (Moran, 202, p. 25). pittance to supply rich westerners with fashion items” (Krug- 20 Many examples of such successes or failure of such devel- man, 1999, 85); see also Maitland (1997). opment are provided in Moran (2002).

11 J. F. Rougé: SWEET SWEATSHOPS. A REFLEXION ABOUT THE IMPACT OF SWEATSHOPS... Except this general approach of sweat- veloping economies, and to improve job shops’ contribution to growth, two spe- prospect, is to create better trained work- cific situations have to be notice: the force through work experience and train- importance of the link between them ing (Arnold and Hartman, 2005, p. 207). and the financial direct investment21 That is exactly what FDI may permit. and their impact on local taxation. Precisely because multinational firms look for cost-competitiveness based on Sweatshops and Financial Direct low wages, their interest is to optimize Investment. the work of their employee in accordance with the precepts of the microeconomics Today’s interest for sweatshops is di- theory. Workers tend to be paid the val- rectly linked to the globalization and to ue of the addition to final product value the generalization of global supply chains that they provide in their employment (Arnold & Bowie, 2007; Radin & Calk- (Buchanan, 1994, p. 19). Yet, evidence ins, 2006, Arnold & Hartman, 2003). Its indicates that multinational firms rou- huge importance is then, in direct relation tinely provide higher wages and better which the amount of foreign/financial di- working conditions than their local coun- rect investment (Moran, 2002). Consider- terparts (Brown & Alii, 2003). Contrary ing the lack of saving and the undercapi- to a common thinking, they are typical- talization of every kind of business… in ly not attracted preferentially by coun- a word the weakness of economy, in most tries with weak labour standards. One of of the developing countries, the FDI’s the few studies documenting this point, risks are numerous. One of the main is to found no consistent trade-off between substitute export-oriented industries, to wage and employment growth (Pollin & any kind of other activity. Multinational Alii, 2004). Furthermore, by limiting a enterprises that contract with sweetshops firm’s ability to attract and retain good are often in position to eliminate com- workers, poor labour practice ultimately peting firms in the host country. Some- reduce both productivity and profits and times they accomplish this by traditional erode rather than straighten, its competi- economic competition, due to economy tive position in the market place. Thus, in of scale and superior technology. In oth- nations with low labour standards, level er cases, host country governments are of foreign direct investment were lower willing to grant special privileges to mul- than might be expected on the basis of tinational enterprises in order to make the country’s others characteristics (Mo- their country, a more “business friendly” ran, 2002, p. 81). environment. Consequently, one major One main problem, to find deeper way question is to determine in which case of reflection on this topic, is double: first, sweatshops linked to FDI may contribute non-economists have performed most schol- to sustainable growth of those countries. arly works on sweatshops. Second, even Theoretical and empirical research sug- when done by economists, they mainly fo- gest that one of the most effective ways cused on wages. Among the few econometric to increase the competitiveness of de- studies demonstrating the benefits provided 22 21 The term “Financial Direct Investment” is volontary used by multinational firms establishment, the here to make a difference between long term Foreign direct study of Powell & Skabek (2006, p. 266) inverstment which may participate to the growth of the coun- try by its stability in the time, and financial investment which provides an interesting schema resuming the is often speculative and may quit the country as quickly as situation: the enter into it. It is often the case in the apparel industry where the return on investment is very high and the invest- ments modest. 22 Refer: Aitken & Alii (1996) and Lipsey & Sjoholm (2001).

12 J. F. Rougé: SWEET SWEATSHOPS. A REFLEXION ABOUT THE IMPACT OF SWEATSHOPS... 800%

700% 40 hours per week 50 hours per week 600% 60 hours per week 500% 70 hours per week

400%

300%

200%

100%

0% a Haiti Chin ietnam V Republic Honduras Indonesia Nicaragua Costa Rica Dominican Bangladesh El Salvador Graph 1. Apparel industry wages as a percent of average national income Of course, this study is not perfect. Authors sibilities. The sustainable economic grow may recognise important limits in the fact that no data occur tanks to sweatshops, if developing coun- document the average number of work, in the ap- tries have the willingness and the opportunity parel industry they surveyed. Hence they estimat- to capitalize on their low-cost advantage to at- ed hours worked per week, between 40 and 70. tract foreign direct investment. Then, this cap- Another important point has to be clarified: the italization will then ameliorate public finances comparisons of working hours are made on the of the state. ground of the formel sector. But the huge infor- mal sector has lower wages and longuer hours of Sweatshops and taxation work. And in this case, data are quite difficult to compile. Beyond those limits, it seems clear that As early as 1817, Ricardo linked the political sweatshops linked to the FDI may have a positive economy and the taxation. Nowadays, many contribution on countries’ development. criteria used to determine the yearly “Global A huge problem is that this informal sector is Competitiveness report”, are based on the level often created with speculative founds. Those in- of public expenditure.23 To finance their essen- vestors, contrary to the classical approach of FDI, tial expenditures, states have to perceive taxes. do not look for durability of their investment. The level of taxation, even if it varies great- They just bet on the profitability of a temporal ly through the world, and through the western situation. They don’t bother about people em- countries, may be considered as an acceptable ployed or pollution they generate. They just look proxy of development.24 Moran (2002) gives to the quick maximum return on investment, and us some examples of such success stories. are always ready to give up the plot, and start 23 In the 2008-2009 report, criteria used are, for examples: over again and again. Those financial direct in- “administrative infrastructure”, “logistical infrastructure” vestment may then constitute a real danger for the (roads, railroads, airports, ports); “regulation of securities stability and the potential growth the country. exchanges”, “Human capacity” (quality and accessibility of education, of healthcare...), “political institutions”... Fortunately, it is not always the case, mainly 24 On the link between taxation and development see (Gastel- when the local State does dismiss its respon- lu & Alii, 1999) and more precisely, Moisseron, “Pression, structures fiscales et niveau de développement”, pp 86-106.

13 J. F. Rougé: SWEET SWEATSHOPS. A REFLEXION ABOUT THE IMPACT OF SWEATSHOPS... One major problem for poorest countries’ Sweatshops: An antipoverty weapon? growth is not that they are incited by the In- ternational Monetary Fund and by the World Since the very beginning of the phenomenon, all Bank to establish free trade. That is the over the world, sweatshops’s workers are mainly means these countries use to attract foreign (very) young women coming from the country- investment in creating tax incentive zones. side (Hapke, 2004). There the conditions of living, Often, these areas are submitted at no tax at partly due to the global market for food and farm all for a long period. Another main preoccu- products, are extremly hard.26 Often, people don’t pation is the way taxes are used to promote even earn their subsistence. In this context of ex- development. treme powerty, situations are hoppeless and spe- cialy for women who are considered as a burden Unfortunately, in most developing coun- 27 tries, the increasing basis of taxation doesn’t for their families. Therefore, many have to leave their village without any education and techni- mean more taxes and fair use of theses taxes. cal competencies. In those conditions, there is no Many difficulties crop up: doubt that main alternatives to sweatshop work 1. First of all they have no efficient ad- are even worst powerty, starvation, prostitution, ministration to compound and collect dealing or so on… This is why, like Powell and the taxes; so many economits, we will support “a compre- 2. Second, taxes have to be not diverted by hensive defense of sweatshops in the third world”. corrupt administrations; In a wonderland, the dream of an instant jump 3. Third, they have to be used fairly, for between underdevelopment and western stan- sake of development. dards: general establishment of systems of social Law, particularly tax law, and legal institu- security, globalization of minimum wages... in tions despite their limits, have the possibility three words: eradication of poverty, would be an ideal. In the real world we live in, it is a utopia; to redress poverty and inequality (Christians, maybe a dangerous illusion. The gap is wild.28 2007). But to reach this aim, tax heavens at the only profit of financial direct investment Based on A. Sen’s works, Social Watch, an 29 have to be reconsidered.25 Reasoning in the- Uruguayan ONG , created a “fundamental ses terms enrol moreover taxation in the ob- needs index” based on three variables affordable jectives for the millennium. in nearly every country: the number of children who die before being 5 years old; the proportion More basically, sweatshops increase of children who went at primary school, and the global income. Stiglitz & Walsh (2002, level of births assisted by health professionals. p. 460) remind us that, as incomes rise in Results show a critical situation:30 economy, the state taxes receipts grow. 26 Powell (2014, a), specially chapter 4 « Don’t cry for me. This growth may then be used to invest in How sweatshops wage compare to alternatives. public goods such infrastructures or edu- 27 Not only woman have less physical strength for the hard cation and health care … those countries work of the countryside but also, in most countries it is used to give a grant for the marriage of his daughters. Those grants are need so much! often the straightest way to ruin for many very poor families. It appears from the developments above 28 One note of optimism is nevertheless given by the first aim of development for the millennium which was approved that an appropriate use of sweatshops may by 189 nations in 2000: until 2015, diminishing by half the be an interesting development lever. But 1999’s level of poverty. this potentiality is far from a general result. 29 Social Watch is a network of non-governmental organi- zations in more than 70 countries that monitors progress and Sweatshops may also be a diabolical means setbacks in the fulfillment of internationally agreed commit- of stagnation, worst, of recession if they are ments against poverty and for gender equality. Its yearly re- not the tool to fight poverty and its -conse port is the world’s most highly recognized independent study on social development. http://www.socialwatch.org quences. 30 Source: Global Watch Report, 2008. Colours significa- 25 All the more that the political coalition against tax heaven tion: Blue: Acceptable ; Green :means ; Yellow : low ; Or- since September 2008 gain in power. ange : very low, Red: critic; Grey: no data.

14 J. F. Rougé: SWEET SWEATSHOPS. A REFLEXION ABOUT THE IMPACT OF SWEATSHOPS...

Acceptable Moyen Bas Tes Bas Critique Pas de donnees

Picture 1. fundamental needs index

Despite this situation, most economists in- nomic security of people. Complexity of the sist on the fact that one main effect of imple- problem of world labour standards cannot hide menting better standards of work can be a loss a basic fact: developing countries need both of the much-needed employment opportuni- more and better jobs. Their populations are ties (Rothbard, 1995). Even if many violent still growing and they have to feed, to care to, critics are developed against those affirma- and to educate more and more people. In this tions (Sengenberger, 1994), some non-liber- situation, “bad jobs and bad wages are better al observers share those fears (Heintz, 2004, than no wage at all.” (Krugman, 1999) The p. 224). Moreover, in our context of global- point is far from being new: “each time that ization, durable economic growth will occur the income growth faster that the population, only if developing countries can capitalize on that means when the medium earnings growth their low cost advantage to attract foreign de- for each individual, one can note, separately velopment. Huge quantity of cheap work is or conjointly, the followings effects: 1° an in- their main wealth. crease of the minimum income; 2° a diminu- There is no doubt that work is the only way tion of the inequalities in the proportion of the to create wealth. And that creation is the best income.” (Pareto, 1909, p. 392). In other more way to improve the well being and the eco- contemporary words, Arnold and Hartman (2006) summarize the situation as follow:

Exploation of labor

Exploation of exports

Improve economy

More jobs enter country

Labor market tightens

Working conditions improve Companies forced to improve conditions to atracctworkers

Scheme 1. The case for Sweatshops

15 J. F. Rougé: SWEET SWEATSHOPS. A REFLEXION ABOUT THE IMPACT OF SWEATSHOPS... Lessons of economic growth history, seem (Zwolinski, 2007, p. 689). As pointed out by to demonstrate the rightness of this scheme. the author, this acceptation seems to contra- Except the amazing cases of the Asian drag- dict the global moral denunciation of sweat- ons, Moran (2002) gives us a panel of suc- shops’ working conditions and perhaps even cessful stories according to witch this anti to view them as, on the net, a good thing. Con- poverty battle frame works. Nevertheless, sequently, it may be affirmed that economi- this global approach of the question is poorly cally, even if it is far from being an absolute used. Most scholarly works related to sweat- first best choice, sweatshops seem generally shops by economists still focuses on wages to be an acceptable second best choice. of employee. From this point of view, even Miller (2003, p. 103) violently challenges economists critical to sweatshops usually do this affirmation. He himself sums up his argu- not dispute that multinational firms pay more mentation as follow: “As taught my seminar than the domestic firms in most cases (Miller, on sweatshops, I settled on a more effective 2003, p. 101). Furthermore, after numerous response to the mainstream economic argu- scandals, many multinational corporations, ment. It is simply this: their argument is irrel- especially in the apparel and footwear sectors, evant for determining if a factory is a sweat- now meet the duties of the ethical treatment shop or workers are exploited. Sweatshops of workers in the global supply chain (Arnold conditions are defined by the characteristics and Bowie, 2007). That should be enough of a job. If workers are denied the right to to conclude that sweatshops are better that organize, suffer unsafe and abusing - work the average conditions of work in most poor ing conditions, are forced to work overtime, countries, even if Powel and Skarbek (2006) or are paid less than a living wage, then they still wonderred recently: “are the jobs worth work in a sweatshop, regardless how they the sweat?”. came to their job of if alternatives they face It is doubtful that the answer to such a ques- are worst yet”. However no mainstream econ- tion may come from a western ethocentric omist seems to contest that!31 view of the situation. Our datas show that In fact, the theory of choices teaches us that even if western industry (mainly apparel one) if on the first hand choices are a method of ex- has been widely criticized to exploit Third ercising autonomy, on the other hand, it also Word workers, those one are better off than signals information about agent’s preferenc- most of their countrymenn (Powell and Skar- es; even when choice is made under condi- bek, 2006, p. 266). Beyond this obvious an- tions far below the full autonomy. For those swer, two other facts have to be considered individuals, this kind of decision is a means to consider if or not sweatshops may be an to optimize their utility function according to anti-powerty weapon: first, sweatshops work- the alternative potentialities that are extreme ers accep generaly freely this kind of work; poverty, starvation, prostitution, illegality … second, Moran (2002) described an interest- In other words, accepting to work in a sweat- ing relationship between sweatshops and fe- shop is generally a true choice under the con- male emancipation. Let us go further on those straint of the worker situation. It is a strong questions. claim of liberty and the loss of some rights or the absence of due diligence from the em- Workers acceptation of the sweatshop’s ployers may appear as a consequence of the working conditions. autonomy of this choice, not an objection to 31 Fortunately some of the Miller’s developments are much more pertinent for example when he writes “historically, the Many searchers note that sweetshop labour organization of factory workers has been one of the most is in high demand (Hajewski, 2000; Moran, powerful force for changing politics in the democratic direc- 2002). Indeed, for the most part, individu- tion that Kusnets outlines”; one can nevertheless doubt that this is the way to prove that (mainstream) economists are als who work in sweatshops choose to do so wrong about sweatshops.

16 J. F. Rougé: SWEET SWEATSHOPS. A REFLEXION ABOUT THE IMPACT OF SWEATSHOPS... it (Zwolinski, 2007, p. 692). Few pages latter, norms should at the very least permit it, if not the author precise: Labour which falls short encourage (Ibidem, p. 700). of a living wage can still help a worker feed Let’s not forget that even if very low, their family, educate their children, and gen- sweatshops in multinational firms pay erally make their live better than they would generally better that the average wage in have been without it. This is a morally signif- the country, as demonstrate by Powel & icant benefit, and one of our system of moral Starbek (2006, p. 267):

350%

300%

250% 40 hours per week

200% 50 hours per week 60 hours per week 150% 70 hours per week 100%

50%

0% a Haiti Chin ietnam V Republic Honduras Indonesia Nicaragua Costa Rica Dominican Bangladesh El Salvador Graph 1. Apparel industry wages as a percent of average national income per worker

It finally appears that low wage manufac- enslavement of women sold to survive of turing enriches rather than exploits workers. to pay debts...32 This approach of sweatshops is reinforced by In sweatshops, women are generally less a globally unknown phenomenon concerning paid than the same male made work and most sweatshops’ workers: women. Sweat- sometimes just enough to survive. Sometime, shops may contribute to their emancipation. this difference may be justified because it -re flects women’s lower productivity and skill Sweatshops: a way to female level. But survey evidences show that this is emancipation. not generally the mater. When going to school is not forbidden to them, girls generally work Since their apparition, sweatshops are harder and have better results than boys. Of- mainly female works; often homemade ten, the plan managers believe that young female jobs. The simple fact that sweat- women can be paid less simply because they shops’ wages permit women to earn their are more passive and docile that male work- live could be sufficient to justify their ers (Moran, 2002, p. 12). The argument is existence in countries where people have also used that women “require no more than more and more difficulties to survive and a supplement to maintain the family income” where alternative means of living are 32 In many poor countries, when parents are not rich worst yet. They may finally give a viable enough to feed their daughter or to constitute their en- alternative to the poorest in from off the dowment , when they have huge debts they can’t reim- burse, they purely and simply sold their children.

17 J. F. Rougé: SWEET SWEATSHOPS. A REFLEXION ABOUT THE IMPACT OF SWEATSHOPS... despite the evidence that many of them are This supplementary earning may then contrib- the only source of household income because ute to reduce the intergenerational transmis- divorced, widowed or single. Except the first sion of poverty. one, which could be justified on economic Furthermore working in factories has also grounds, others are formally and morally con- other indirect positive effects on demography. demnable. It seems to be an efficient means to reduce -na However, an amazing result of sweashop’s tivity in countries where population’s growth development in the less developed countries, is a huge problem. First, to keep at work the seems to be the grothwing emancipation’s best elements, information on contracep- leverage of many young women. “According tion and sexual illnesses are often diffused to surveys of female workers in Asia and Lat- in sweatshops: it may raise awareness about in America, factory work offers a measure of family planning, thereby lowering fertility autonomy, status and self-respect that is oth- rates. Second, breaking the organization of the erwise hard to obtain” (Moran, 2002, p. 15). traditional society and given independence to Consequently, sweatshops’ advantages for women toward their family, sweatshops ap- women could be compared to the one earn by pears to have for effect to militate against ear- the significant women’s adhesion to Calvin- ly marriage, (Moran, 2002, p. 15-16). ism in the sixteenth Century. Through Cal- To conclude on this point, it can be sustained vinism women have accessed to knowledge, that generally speaking, the existence of sweat- communication, exchanges, capacities’ de- shops have a positive impact on the reduction velopment, and fructification of talents which of poverty through to ways; in the first hand, where inaccessible to them through Cathol- they create a great deal of employment that icism. Through sweatshops’ work, today’s won’t exist until and generally they pay high- women may ambitions the same freedoms at er wages that the average income of the coun- the hands of isolation, autarky, obscurantism try. For this reason sweatshops may contribute … that many traditional culture keep women both to the country’s growth and to the pov- in, in the less developed countries.33 Even if erty’s reduction of many people. On the sec- this historical comparison is daring, less con- ond hand, sweatshops seem to have a positive troversial facts of the recent history demon- impact on the evolution of mentalities toward strate that women’s emancipation has a huge women. This advancement may also bear two impact on the society and on the economic advantages: the extra earning of women is growth. mainly used for basic needs of family and chil- Moreover, the social benefit of women’s em- dren and the women will contribute more and ployment, even in low-skill export plants, may more to the success of their economy. extend beyond increased status and autonomy Of course, even is generally true, those con- on the individual level. As a result of higher clusions are quite optimistic. They rest on female participation in the labour force, a high- the hypothesis that sweatshops will evolve er proportion of household income is directed toward normal industry and about all, on the toward basic family needs such as health, nu- hypothesis that they are not purely exploit- trition, and education. Contrarily to men who ative and then induce long term effects that spend a large amount of their earnings for their will eradicate all hope of growth. personal needs or pleasures, women generally give priority to their family and more precisely SWEATSHOPS: A BRAKE FOR THE to their children needs. With more money dedi- GLOBAL COMPETITIVENESS? cated to their food and their education, children are in better heath condition and more skilled. “L’entreprise économique qui s’édifierait 33 This comparison is inspired by the analysis of Peyrefitte (1995) on the impact of Calvinism on economic growth and sur la ruine physique et morale de l’homme emancipation of women.

18 J. F. Rougé: SWEET SWEATSHOPS. A REFLEXION ABOUT THE IMPACT OF SWEATSHOPS... tournerait le dos à son principe vital. (…) Une points will be examined here. First, the de- réalisation qui piétine ceux qui l’ont rendue velopment of more and more antisweatshop possible est une victoire sans vainqueur.” legislations in a context off spreading inter- Peyrefitte (1995, p. 407). est of western people for human rights seems In practice, many surveys show that despite particularly important for the duration of the the advantages that sweatshops’ economics practice. Second, many surveys point out the present for the instant competitiveness, some impacts of the worst forms of sweatshops on of their long-term consequences may consti- the future of health and employability of the tute a brake to the long run development. At concerned populations; it may constitute a this point, the question is not to analyse the huge long term Damocles’ Sword on the head ethical point of view of such practices, but to of any sustainable development. consider objective facts that may sooner or longer penalize the firms or the countries that Development of the antisweatshop bans. recourse to the worst sweatshops practices. The idea that will be developed in this sec- One of the amazing results of the search for tion is that whatever the advantages of the honorability that western people develop is a sweatshops’ practices on the short run, they kind of myopia or of ethnocentrism that prevails may be overwhelmed both by the conscien- in the way they consider any form of non-west- tious strike they face and by the long term ern labour conditions. Western people’s bans consequences that the worst of them induce of sweatshop are dogmatic; no matter if they in the long run development of people’s em- do support advantages for the development of ployability. Those considerations may impact many countries. To illustrate this approach, greatly the long run consequences of those Arnold & Hartman (2003, p. 434) present an short run advantages. alternative apparel and footwear supply chain system chart, which can be systematized, to any Many approaches of those risks are inves- multinational firms that used sweatshops: tigable; a choice has to be done. Only two

19 J. F. Rougé: SWEET SWEATSHOPS. A REFLEXION ABOUT THE IMPACT OF SWEATSHOPS... This study’s limits prevent from analysing of the Fair Labour Standard Act (FLSA) this system in details. So once again choices . These clauses allowed the department of la- have to be done. Under the increasing pres- bour to fine and size the goods of manufactur- sure of Human Rights defenders (institu- ers and retailers who knowingly sell merchan- tional or private), western countries but also dise manufactured by companies violating some of the developing ones, are increasing the FLSA.35 Unfortunately, Reich’s admin- the legislative arsenal to fight against - ev istration faced an important lack of means. ery kind of sweatshops practices. No mat- So, in 1995, the State Secretary switched ter the true reasons of those legislations34 its strategy to use the power of the public , the fact is that they will have a growing ef- awareness. Since then, legal and media36 fect on the profitability of sweatshops practic- pressures against sweatshops are increasing es; they may be a major raison to annihilate (George, 2015). the sweating systems’ competitive advantage. In 2002, a first procurement law intending More generally speaking, Arnold & Bowie to cover international workers was adopted (2002, p. 227) remembered to us that “law- by New York City. This law asserts that pur- lessness contribute to poverty and is deeply chases of apparel and textile goods, by city interconnected with human and labour right agencies might only be made from a respon- violation”. sible manufacturer. Of course, from a legal Therefore, (1) it will be interesting to con- point of view, the term “responsible manu- sider first the multiplication of the antisweat- facturer” is far from being obvious. But the shop laws and regulations and (2) then to legislation has evolved and became quite dwell on the particularly sensible question of precise on the meaning of the terms. Since the worst practices susceptible to harm health this first text was enacted, some thirty other of workers. antisweatshop procurement laws have been voted. More and more, they seek to cov- The multiplication of antisweatshop laws. er workers abroad. “By using international indices to tailor standards to each coun- Legal ban is the most obvious way in which try, antisweatshop laws epitomize national sweatshops may be fighted. One important treatment and non discrimination” (Barnes, point is that nowadays, laws against sweat- 2007, p. 448). shops can be met in western countries. Fur- More globally, there is a long histo- thermore, many laws that regulate sweatshops ry to attempt to harmonize internation- exist in the less developed countries. Even al labour standards via trade agreements if they are poorly enforced or completely ig- such as the North American Free Trade nored (Arnold and Hartman, 2006), due to the Agreement (NAFTA); the General Agree- insufficiencies of resources of the -enforce ment on Tariffs and Trades (GATT)37 ment administration and a deliberate policy and now the World Trade Organization of the government officials to attract multina- (WTO). Even if the main preoccupation of tional firms, the fact has to be pointed out. those agreements is more to preserve western In practice, the first effective law against economies’ cost based competitiveness, than sweatshops appears in the middle of the human rights, the uses of international princi- 90’ under the willingness of the US sec- ples drowned up by the ILO prevent accusa- retary of Labour R. Reich. He took legal 35 This clause allowed the department of labor to fine and actions under the Hot Goods Provision sizes the goods of the manufacturers and retailers who know- ingly sell merchandise manufacturing by companies violat- 34 In fact, many states, and even WTO consider sweat- ing the FLSA. shops like an unfair competitive practice. Nevertheless 36 Since 1996, Department of Labour issues regular reports a strict ban on the importation of goods produced in of health and safety violations in the apparel industry : “No sweatshops is quite tactful to impose. Such a practice sweat garment Enforcement Report “ may be considered like protectionism (Singer, 2004). 37 On this point refer to Brown & Alii (1996)

20 J. F. Rougé: SWEET SWEATSHOPS. A REFLEXION ABOUT THE IMPACT OF SWEATSHOPS... tion of protectionism, paternalism, or imperi- is not so obvious.43 Even when largely ratified, alism and emphasize the connection between ILO conventions are poorly respected.44 Many antisweatshop laws and international consen- poor countries consider that those standards sus that no one should condone certain ab- discriminate them. They view them as a means horrent practices (Barnes, 2007, p. 455). On used by western countries to prevent devel- the contrary, the deviancy from the ILO prin- oping world from using its cost-competitive ciples below will be used more and more by advantage. Hence, for Barnes (2007, p. 449), western nations as a means to preserve their more than respect of human dignity, antisweat- work through legally justified protectionism. shop laws represent a necessary development According to Plasa (2015), it seems, at least, in local government efforts, to ensure that they possible to “reconciling international trade do not reward low labour standards, in the in- and labour protection”, building a bridge be- creasingly globalized economy. For this au- tween those standards. thor, if local antisweatshop laws are pre-empt- ILO established a list of principles, which ed, suppliers who pay their workers inadequate synthesize a relatively universal acknowl- sums will have an advantage over suppliers edgement:38 who observe higher labour standards. Worst, if 1. Workers have to be paid enough so that antisweatshop law can only apply to domestic suppliers, there is a real risk that supply con- full time work will support a family of a specific size (…); tracts will go primarily to those suppliers based abroad which will not be held to follow the 2. Working conditions have to be just and same minimum standards. favourable;39 In those conditions the incitation to fraud 3. Prohibition of discrimination in work the law or the conventions is huge. Illegality (mainly wage discrimination for an equal may be the source of massive cash incomes. work); In the balance, direct legal risk is quite light. 4. Prohibition on child labour and fixation Therefore, much more than from the prohi- at 14 years old of the minimum age to bitions of the law, the actual pressure against work;40 sweetshops comes, in fact, from civil society. 5. Prohibition of forced labour;41 6. Prohibition of slave labour; The development of antisweatshop 7. Free right of association including the pressures from civil society. possibility to organize and to bargain col- lectively in contract negotiations has to be The first signs of civil society activism against respected.42 sweetshops appear in the early 30’, in the For Harnold and Hartman (2005, p. 211), United-States. In 1933, activists were able to those standards suggest that there is consider- persuade the United-States Congress to add a able agreement about what rights ought to be fair labour standard provision to the National respected. In fact, the poor ratification rate of Industrial Recovery Act (NIRA). Even if de- many ILO conventions tends to prove that this clared unconstitutional in 1935, this act was important. It drew up the way of future laws 38 The integrality of the ILO conventions is located at: http:// against sweatshops, when it specified that im- www.ilo.org/ilolex/english/convdisp1.htm 39 In other words, number of hours worked each day has to ports would only be permitted from nations be limited and the working environment has to be healthy. 43 For examples, Convention 138 of 1973 concerning the Convention C 1 of 1919 limits the hours of work in industry minimum age (14 years old) to work was only ratified by 57 8H/Day; 48 H a week. states in 1997; 40 ILO, Conventions N° 138, 1973 & N°182, 1999. 44 Two texts may be cited as examples: conventions N°87 41 ILO, Conventions N°29, 1930; N°105, 1957. (1948, 121 ratifications in 1977) & N°98 (1949, 137 ratifi- 42 ILO, Convention N°87, 1948 & N° 98, 1949. For a debate cations in 1997) concerning respectively the freedom of as- on whether having union may be a guarantee that workers are sociation & the right to organize and the one to organize and adequately represented, see WAGSTAFF & PAREIRA (2004). bargain collectively.

21 J. F. Rougé: SWEET SWEATSHOPS. A REFLEXION ABOUT THE IMPACT OF SWEATSHOPS... that guaranteed workers the right to organize (2004) propose a market-based strategy and bargain collectively, limited maximum that relies on “conscinetious consumers” working hours and provided minimum wages. to slow the global rise to the bottom in- This kind of action, through lobbying, is still duced by the multiplication of sweatshops. used and keeps its importance. It is comforted For their enquiry, those authors labeled in two ways to fight to death, every kind of socks indicating that they were produced sweatshops, everywhere in the world. A first under “good working conditions” and method is to make pressure on public opinion. placed them near other of the same kind A second one, more discreet, but none less ef- displayed with no label. After increment- ficient is to build norms. ing the price of labeled socks, they found that most consumers prefer the cheapest The direct fight: how to increase socks but that 25% of them agreed to pay, public awareness. up to 40% more, for labeled socks. 1. Collectively, through associations or non Nowadays, public awareness seems to be the governemental organisations, those same ultimate weapon. In fact, very few states in citizens now have the power to constraint the word are really democratic, even in those the bigests firms around the world. An- countries, corruption (Hazlitt, 1946), and tisweatshops actions and movement pro- conflicts of interests are quite frequent. In vide more and more information about the USA the shield against those calamities is how products are made. Whence Freeman (theoretically) the fourth power; but in most concludes that there is a latent demand for countries the independence of the press is a “good” labor practice “because there is a huge problem. In those conditions peoples are overwelming empirical evidence that peo- the solution. Aren’t they the definitive source ple act as if fairness toward others is part and the final aim of the law? of their utility function.” (1998, p. 6). Public awareness is then capital because it As firms have increasingly turned to out- can act through two ways. sourcing to increase their bottom line per- 1. As individual, each citizen has a freedom formance, they have become criticaly vul- to choice, and particularly to choose be- nerable to attacks on their reputation by tween products build in decent conditions sweatshop critics. Nike, Addidas, GAP, or in inhuman conditions. Consumers Shell and many other companies have care more and more about how the goods, tested this kind of determination from the they buy, are made (Rock, 2003, p. 24). “new consumers”. They are able, thought New markets for ethical products are in boycots and violent strike, to damage the development and ethical consumers look so hard to construct, corporate image. for (Wheale & Hiton, 2007). Each those attacs costed millions of dol- Pollin & Alii (2004) found in that the re- lars; they sometime nearly acculate firms tail price necessary to absorb the cost of to banqueroute. But Barnes precise that rising wage unto a living wage, are small this movement goes beyond the direct and that US consumers are willing to pay strike. For him “A growing movement in it. Investigations shaw that european con- the US centred on using the western con- sumers will also be ready to pay more, sumer preference for goods manufactured sometimes substancially, for ethical prod- under acceptable working conditions is ucts (Rock, 2003, 24). One can observe a pressuring producers, suppliers, govern- true willingness of a new kind of consum- ments and international bodies to change mers, to avoid buying goods made under various labour practices and conditions. poor labor conditions. This movement incorporates an array of Considering this trend, Prasad & Alii projects and measures representing the

22 J. F. Rougé: SWEET SWEATSHOPS. A REFLEXION ABOUT THE IMPACT OF SWEATSHOPS... conviction that adequate labour stan- But even with their ethical limits, codes of dards ought to be universal and that they conduct are “soft law”. If t hat means, they are attainable” (2007, p. 426). cannot be directly enforced by jurisdictions, All those civilian actions have a result, they are not necessarily without any biding which reinforces the power of the antisweat- strength. Nowadays, the price to pay when a shop laws and regulation. But this outcome is firm is convinced to break its word, may be not unique. A new kind of self-regulation is huge: is no more a fine; it is the ruin of its im- emerging and reinforcing every day, for now age. That’s why the problem becomes more two decades: it is called soft law and aims to and more tactful. One of the main disadvan- create a better world. tages of soft laws is that firms cannot hide any more themselves behind the (hard) Law45 The indirect fight: how to build a better to limit their liability. Firms are no more lia- world. ble only for their own comportment. Through their global supply chain, they may also have to respond for their nth subcontractor’s one. One efficient contemporary trend to achieve That is why, an always greater number of a better word is to use “soft law” in the aim to companies like Adidas or Salomon, created short-cut state law. In other words, to face the a worldwide network of social and environ- slowness and the conflicts of interest which mental affairs professional which comprise preclude to the adoption of the law, one can its standards of engagement team (Arnold & use a market type procedure, to build a private Hartman, 2005, 216). According to Burnett law. Those private rules use two complemen- and Mahon (2001), “codes and monitoring tary juridical tools to be as powerful as the have proliferated. (…) The new industry of state law. The legal tools are the codes of con- code monitoring has quickly became very duct and the social normalization. To enforce complicated, with firm’s own internal efforts them: no law, strictly speaking, but a kind of now usually supplemented by a second and private justice: the public awareness. It may a third parties: hired monitors, those who be an implacable judge. accredit monitors and those, generally local actors, who submit relevant information’s to The incredible expansion of codes of either or both. This rapid complication count conduct. as evidence that no current monitoring ar- rangement can solve the information asym- In the USA, Most of the firms have adopted metry problem for consumers…” codes of conduct. “Firms in industries most This expansion of codes of conduct, concern vulnerable to sweatshops charges, particular- not only industries. Many purchasers have ly apparel and toys, generally have adopted also adopted ethical purchasing guidelines or codes specifics to their supplier relationships” codes. This movement has such a success that (Rivoli, 2003, p. 227). The rest of the western “local government in the US adopted a set of world’s, MNFs followed. laws that prohibit procurement of particular In fact there is often a great hypocrisy in the goods or services that do not adhere to specif- adoption of those codes. First, the great ma- ic labour standards.” (Barnes, 2007, p. 427). jority of their requirements relate to matters Shared between professionals and consum- already protected by the labour laws of most ers, codes of conduct are a reality that cannot countries. Second, at least in the USA, they be ignored nowadays. Unfortunately their im- have generally been adopted for bad reasons: portant loopholes limit their effective range. in case of legal prosecution, the US law dis- However, in the largest firms, codes are- re poses lighter sanctions against firms which have adopted those codes. 45 The firms (MNF) have the possibility to influence Hard law through lobbying.

23 J. F. Rougé: SWEET SWEATSHOPS. A REFLEXION ABOUT THE IMPACT OF SWEATSHOPS... inforced by self-constraints that firms accept and the UN Convention on the Rights of the through the multiplication of social norms’ Child, but it is larger.50 Consequently, the sys- implementation. tem also includes: 1. Factory-level management system re- The significant development of social quirements for on-going compliance and normalization. continual improvement. 2. Independent, expert verification of -com Social normalization takes place in a context pliance by certification bodies accredited of globalization, where firms need to institute by Social Accountability Accreditation social norms to comfort their image of respect- Services (SAAS). ability. Due to the lake of really biding inter- 3. Involvement by stakeholders including national business and social laws, companies participation by all key sectors in the have to create their private norms to create and SA8000 system: workers, trade unions, comfort their consumers’ confidence. companies, socially responsible investors, nongovernmental organizations and gov- That is the reason why private norms or “stan- ernment. dards”, did appear, first in the telephony in- 4. Public reporting on SA8000 certified dustry. Nowadays, the private actors of the facilities and Corporate Involvement normalization are quite numerous. One can Program (CIP) annual progress reports find it at the international level,46 at the Eu- through postings on the SAAS and SAI ropean level47 and even the national level48. websites. More and more the internal legislations make 5. Harnessing consumer and investor con- the use of a norm, an obligation.49 Common in cern through the SA8000 Certification the technical area, norms are also becoming a and Corporate Involvement Program by standard in the social area. Only the most fa- helping to identify and support companies mous international social norm SA 8000, will be presented below. 50 A summary of the Standard elements : Child Labor: No workers under the age of 15; minimum lowered to 14 for countries operating under the ILO Convention 138 develop- Social Accountability Standard 8000 ing-country exception; remediation of any child found to be working ; Forced Labor: No forced labor, including prison (SA8000) or debt bondage labor; no lodging of deposits or identity pa- pers by employers or outside recruiters ; Health and Safety: Social Accountability International (SAI) Provide a safe and healthy work environment; take steps to prevent injuries; regular health and safety worker training; was created in 1997. It convened an expert system to detect threats to health and safety; access to bath- advisory board to develop standards and sys- rooms and potable water; Freedom of Association and Right tems to address workers’ rights. SAI regroup to Collective Bargaining: Respect the right to form and join trade unions and bargain collectively; where law prohib- representative of trade unions, human right its these freedoms, facilitate parallel means of association organizations, academia, retailers, manufac- and bargaining ; Discrimination: No discrimination based turers, contractors, consulting, and accounting on race, caste, origin, religion, disability, gender, sexual orientation, union or political affiliation, or age; no sexual & certification firms. Its aim is to cooperate to harassment; Discipline: No corporal punishment, mental or develop the Social Accountability 8000 Stan- physical coercion or verbal abuse; Working Hours: Comply dard, which ambition is to create tools for “as- with the applicable law but, in any event, no more than 48 hours per week with at least one day off for every seven day suring human workplaces”. This standard was period; voluntary overtime paid at a premium rate and not first published in late 1997 and revised in 2001. to exceed 12 hours per week on a regular basis; overtime SA 8000 largely used the ILO’s norms, may be mandatory if part of a collective bargaining agree- ment; Compensation: Wages paid for a standard work week the Universal Declaration of Human Rights must meet the legal and industry standards and be sufficient 46 ISO is the most common international norm to meet the basic need of workers and their families; no dis- 47 In Europe, the norm CE is largely used. ciplinary deductions ; Management Systems: Facilities seek- 48 For example in France the AFNOR ing to gain and maintain certification must go beyond simple 49 For example, in France, the MNFs have to publish yearly compliance to integrate the standard into their management a social monitoring. systems and practices.

24 J. F. Rougé: SWEET SWEATSHOPS. A REFLEXION ABOUT THE IMPACT OF SWEATSHOPS... that are committed to assuring human forbidden.51 Sweatshops may constitute the rights in the workplace. path on the ladder of growth only if, it is one 6. Training partnerships for workers, man- (short run) step and if it avoids the worst agers, auditors and other interested parties forms of working conditions that may break in effective use of SA8000. all chance for a sustainable growth. 7. Research and publication of Guidance in the effective use of SA8000. Long run consequences of the worst 8. Complaints, appeals and surveillance pro- working conditions cesses to support the system’s quality. Norm SA 8000 use is not required; it is “Ni rire, ni pleurer, comprendre.” Spinoza. a free choice from firms. If they choose Largely studied for a long time, long run to, organizations have two options for its consequences of the worst working condi- implementation: certification to SA8000 tions in sweatshops may be polarized around and participation in the Corporate Involve- two main societal preoccupations which may ment Program (CIP). If a facility meets the deeply impact the long term growth of coun- Standard, it will earn a certificate attesting tries: (1) the first one concerns the public its social accountability policies, manage- health and (2) the second considers problems ment, and operations. Companies that op- linked to the work of children. erate production facilities can seek to have individual facilities certified to SA8000 through audits by one of the accredited cer- The public health consequences of worst tification bodies. SA8000 certification is sweatshops. conducted by organizations accredited and overseen by Social Accountability Accredi- Long run global health problem should be tation Services (SAAS). Both certified and the consequence of a concentration of the accredited organizations undergo semi-an- work’s worst conditions in some sweatshops. nual review and revisits. Those condemnable work’s environments Of course, this system is not a panacea. may have numerous sources (Powell, 2014b): Many reproaches have been made to it: may bad housing and bad food are generally linked the firms or the facilities be informed or not, with the extremely low level of wages; ex- of the visits of accreditation inspectors? Have haustion and premature old age are linked to theses inspectors really the means to do their the absence of due rest; many illnesses result 52 work? Do they visit the actual factory or fa- from the sanitary conditions of work… Of cility?… Whatever the reproaches, the fact is course, a bad or even, a dangerous living en- that the SA 8000 is nevertheless a progress, vironment, for example in Bhopal, is joining even a little one, to ameliorate working con- those dreadful conditions of work. ditions in sweatshops. The phenomenon is not new. As soon as

Legal or civil, many ways of action are 1840, the French doctor Villerme (1840), used to constraint the use of sweatshops by draw up the sadness of the health consequenc- western firms, or by companies, which sell es of the brand new French industrialization. on western markets. All abuse from those He called them: “les ravages sociaux”. Engels preeminent firms may result in a serious haz- (1845) did the same concerning England. Fif- ard on their image. That is one of the main ty years later, Florence Kelley (1892) resumed reasons why they care more and more on the quite concisely the situation of XIX° centu- way they produce. That is also why, like two 51 At least, it is forbidden for a western industry to be sur- centuries ago, sweatshops may be a means prised the hand in the basket. of development. But unlike what happened 52 For examples: eyes troubles are quite frequent in the pop- in the past, all kind of excess is nowadays ulation of dressmakers who work in bad enlightened shops; lung troubles are not reserved to minors…

25 J. F. Rougé: SWEET SWEATSHOPS. A REFLEXION ABOUT THE IMPACT OF SWEATSHOPS... ry sweatshops in the USA: “it is needless to ings, adhesives… US Environmental suggest that the sweatshops districts as they Protection Agency diffuse a complete have been described are the natural abodes list of toluene’s effects on human body of disease and the breading place of infection (US EPA, 2005, p. 11-12):56 and epidemics. While the system does not cre- • Oral exposure may cause “severe cen- ate those conditions, it penetrates the regions tral nervous system depression, severe where they exist and thrives upon an atmo- abdominal pain, diarrheal, and haem- sphere with which a higher form of industry orrhagic gastritis” could not breathe. It is true the normal or or- • Concerning inhalation exposure: dinary death rate in the wards mentioned is “Toluene abusers who have been ex- not conspicuously greater than in others; pos- posed for long periods of time exhibit sibly the vital statistics of certain localities a variety of neurologic manifestations, within wards might show the actual and rel- including ataxia, tremor, anosmia, ative effects of bad sanitation more forcibly; sensor neural hearing loss, dementia, at least, disease and all death laden agen- corticospinal tract dysfunction, abnor- cies pervade these communities, and if they mal brainstem auditory-evoked poten- have escaped pestilence in the past, they still 53 tials, and epileptic seizures (…) Optic may be ripening for plague in the future.” neuropathies with dyschromatopsia, More than a century old, and not a wrinkle! blindness, changes in pattern visu- Since then, a lot of studies by the Interna- al-evoked potentials, pendular nys- tional Labour Organization or by the World tagmus, ocular flutter, opsoclonus (ir- Health Organization were made in the poor- regular rapid eye movement), bilateral 54 est countries…and even in the richest. They internuclear ophthalmoplegia, and ret- show again and again the same kind of conse- inal impairment have been reported in quences even if pathologies have changed… participants who chronically sniffed 1. Too long days of work are the source of a toluene or toluene-based glue (…) lot of direct or indirect diseases: exhaus- There were several pathologic find- tion, headache, alcoholism … but it is also ings and organ weight changes in the the source of many accidents due to the liver, kidney, brain, and urinary blad- diminishing of care… der. In males, absolute and relative 2. The exposure to dangerous toxic chemi- weights of both the liver and kidney cal or airborne pollutants, are common,55 were significantly increased (p<0.05) particularly in shoes and toy factories at doses greater than or equal to 446 (Rivoli, 2003, p. 226). For example, it mg/kg-day. is often the case with toluene, which 3. The perpetual repetition of the same is a solvent largely, used in industry movement often causes neuromuscular as paint solvent, cleaning agent, coat- troubles… 53 The article continues with a description of the main dis- eases by genders: “in men the debility takes the form of con- The list is endless; only the ILO draws it sumption, either of the lungs or intestines, and of complete up exhaustively. Sometimes, conditions are exhaustion and premature old age; the girls become victim s even worst. They may cause the workers’ of consumption, dyspepsia, and live-long pelvic disorders” 54 During our research to write this paper, we were very sur- death. The implements’ lake of safety is the prised to see that most academic papers concerning sweetshops source of many accidents, some incapacitat- concern the situation in the USA or are related to the USA. It ing, others are lethal. For example, Arnold & also appears that sweetshops exist in nearly every country of the OCDE in which investigations have been proceed Bowie (2003, 231) denounce dangerous prac- 55 Ernst & Young proceed for Nike to a environmental and tices. They point out the fact that, in factories labor practices audit of the Tae Kwan Vina factory (Near Ho 56 http://www.epa.gov/NCEA/iris/subst/0118.htm (verified Chi Minh City, Vietnam). They report a dangerous exposure to April 16, 2009) For a complete study of the effects of toluene toluene (6 to 177 times what is allowed by Vietnamese law) at see: US EPA (2005),Toxicological review of toluene http:// this 10 000 persons facility. (Arnold and Bowie, 2003, p. 231) www.epa.gov/ncea/iris/toxreviews/0118-tr.pdf

26 J. F. Rougé: SWEET SWEATSHOPS. A REFLEXION ABOUT THE IMPACT OF SWEATSHOPS... throughout the world, workers are locked on Beyond that global dilemma of health linked to keep from leaving the factory. When fires to the sweatshops, a particular preoccupation break out workers are trapped. This is what is more specially concerning the western cit- happened in 1993 when a fire broke out at izens; this is the one of the children at work. the Kader Industrial Toy Company in Thai- land. More than 200 workers were killed and The special problems of worst child 469 injured. (…). And it happens again and labour in sweatshops again.57 Trying to fix this situation is the aim of Historians have become customary to ac- the convention concerning the promotional knowledge that children have always worked. framework for occupational safety and health But, until recently, their work has never been leaded by the ILO (2006, b). That is undoubtly the social problem it is nowadays (Hindman, a progress. Unfortunatly, Miller remarks that 2006, p. 125). However, Anker (2000, p. 257) “when labor law protection are limited and points out two facts: “fist that many children international labor conventions are neither work willingly and with the support of their ratified nor respected, then insisting the law parents”; second that “in the good circum- should be fully obey do little to prevent sweat- stances, it can be good for children to work. shop abuse.” (2003, p. 97). Yet, the World For example, there is widespread agreement Health Organization has the power to edict that non hazardous forms of work can teach sanitary norms biding worldwile; one can children self reliance and responsibility.” think that it has the power to stop all the worst A globally accepted definition of child labour, forms of work. Futhermore, ILO’s noms may used in for the official statistics considers it as the be incorporated in the WTO’s commercial “work undertaken inside or outside of the home, ones and so become biding. Unfortunatly, no- with or without remuneration, for at least one hour body has nowadays the possibility to enforce per week, in the production of marketable goods”59 and still less to monitor the application and . But this definition and these statistics are greatly 58 such norms. imperfect and very controversial. Miscalculations Studies have been made concerning the are numerous: the importance of none directly global impact of work’s sad sanitary condi- marketable home work, the one of the illegal and tions, on the national growth’s level. Ruhm of the immoral child work, the multiple statistical (2005) specifies: higher “ mortality during difficulties (Anker, 2000)… So there are very few temporary expansions need not imply nega- reliable tools to really monitor the phenomenon. tive effects of permanent growth. The key dis- Since 1996, the ILO points out that nearly tinction is that transitory increases in output 250 million of children are working through usually require more intensive use of labour the world (ILO, 1996). In a great worldwide and health inputs with existing technologies, investigation, the ILO approximate at nearly whereas lasting changes result from techno- 120 million the number of working children, logical innovations or expansions in the cap- aged between 5 and 14 years60, who are work- ital stock that have the potential to amelio- ing full time and are involved in work that is rate any costs to health. Individuals are also more likely to defer health investments during 59 Census of India’s definition of child labor that leaves out temporary than permanent increases in work all non-economic activities (www.censusindia.net) quoted in (Galli, 2001, 9-10). hours and sustained growth permits the pur- 60 Aiming at the abolition of child labor, the ILO Minimum chase of consumption goods (like safer cars) Age Convention (N°138, 1973), fixes the minimum age for that benefit health.” admission to employment at 14 years old, in the less de- veloped countries and 15 years old in the developed coun- 57 The last one occurred on December 20, 2015, in Shen- tries. This age has to permit the completion of a compulsory zhen, China. schooling. In 1997, only 59 countries have ratified this con- 58 It has been seen many MNF develop efforts to monitor their vention. One can also point up that this convention came very codes and their SA 8000 accreditation with mitigate success. late in the history of the ILO which was created in 1919.

27 J. F. Rougé: SWEET SWEATSHOPS. A REFLEXION ABOUT THE IMPACT OF SWEATSHOPS... hazardous and exploitative (ILO, 2004). Two corporations concentrate on their monetary years latter another study numbered at 75 mil- gain instead of the wellbeing and lives of chil- lion, the child labourers engaged in hazardous dren. Corporations separate themselves from work that can affect adversely their safety, the production of their goods and take no re- they health or their moral development (ILO, sponsibility for the labour rights violated in 2006). Levison and Alii (2007) insist that, foreign nations. Multi-national corporations beyond the empirical evidences of the ILO, seek employees in countries with low wages, intermittent employment is also a crucial no unions, and a diligent work force.” characteristic of child labour, which must be But, contrary to the most common opinion, recognized to capture levels of child employ- it seems impossible to condemn globally child 61 ment adequately and identify child workers. labour without considering its alternatives al- Consequently, child work’s matter became a ready studied (Powell, 2014a). Furthermore, huge societal dilemma linked with the global- many studies prove that child labour contrib- ization of the economy (Dinopoulos and Zhao, ute as much as 20% of the family income. This 2007). The UNICEF (2006) explains clearly earning is generally critical since children are the links between anticipated growth and the sent to work when parent’s earning are insuf- use of child labour in sweatshops: “Coun- ficient to guaranty the survival of the family tries without economic prosperity looked to- (Galli, 2001; Dessy and Pallage, 2001). ward child sweatshops to boost the economy. Even if, in the short run, child labour is Therefore, these countries deliberately set the crucial to children’s survival and important minimum wage below the standard of living to to poor countries’ economic growth, it poses support a family or an individual to allow the two kind of long run mortgage on this growth. elite class to enjoy the corrupt manipulation The first one is linked with the health effect of globalization. Countries with stable econ- of too young an entrance of children at work. omies that spread their corporations globally The second is due to the huge need of high seek to find cheaper labour to produce a mass level of education in the information society. amount of goods for the cheapest price. Ig- Negative effects of children’s work may be noring the country’s loose child labour laws, summarized with the Scheme below:

Illiteracy Unemployment

1

Growth of population

2

Powerty Critical health situation

1 : less educated women have larger families ; 2: High population growth rate increase the proportion of the young who are dependant from the income of others. Growth of young unskilled population accelerates the urban concentration and the high rate of unemployment in the cities.

61 The problem is then to determinate how to investigate Scheme 2. Negative effects of children’s work such a link of work which occur often inside the families, at home or in the fields…

28 J. F. Rougé: SWEET SWEATSHOPS. A REFLEXION ABOUT THE IMPACT OF SWEATSHOPS... According to Stiglitz & Walsh (2002, p. on country level of economic develop- 478) this scheme means “a vicious circle. ment (Donaldson, 1989); Little or no education, malnutrition, and the 2. on the other hand, demands of the poor health care reduce productivity and thus globalized economy concern more incomes. With low incomes, people of less de- and more high skilled workers. veloped countries cannot afford better educa- Corelation between the economic groth tion, more food and better health care.” Every and education’s level has been observed means available to break this circle may be a on the long run. Galor & Moav (2000) benediction for most of the two third of the provide several historical examples to ar- humanity. gue that, as soon as the second phase of It has been seen that sweatshops may be the Industrial Revolution, the capitalists one of these means. But to be obvious, this were among the prime beneficiaries of the development’s path has to respect few rules, potential accumulation of human capital according the Kantian ethical precept: “do not by the masses. harm”. Then, “if educational level can be im- Hence, children’s presence in firms, mainly prove, the virtuous circle can be turn in virtu- the youngest one, will be an important fac- 62 ous circle” (Stiglitz & Walsh, 2002, p. 481). tor of the future exclusion of the adults they To attain this aim, sweatshops have to escape will become. Unable to go to school, they will to traps of poverty due to work’s worst con- never accumulate enough knowledge to be- ditions: (1) illiteracy and (2) chronic illnesses come skilled workers; maybe simply to count or diseases. and to read properly. In the absence of such basic knowledge, the future adults will have Children work and the needs of the no chance to evolve in a developing society; information society. they will be condemned to poverty and per- petual unemployment. Sweating systems have to be reconsidered Another preoccupation is linked to this in the light of the economy of knowledge. one. Children wages are very low. This low Indeed, nowadays, the flow of foreign direct level may induce a substitution effect -be investment to the more advanced industri- tween work of children and work of the less al sectors in developing countries is roughly skilled adults who are paid a better wage. twenty-five times larger than the flow of low Even if this substitution did not really oc- skill, labour intensive operations. If accumu- cur, there is no doubt that child wages’ low- lated stocks are used for the comparison, the ness attracts the general level of unskilled ratio of foreign direct investment in the more work towards the bottom. It may be a pow- advanced sector to foreign direct investment erful limitation to the capacity of growth of in lowest-skill sector is more than ten to one the country. (Moran, 2002, p. 5). In practice, firms hire Dessy and Pallage (2001) do not share more and more workers who are well edu- those fears. They argue that the existence of cated, creative and imaginative; not unskilled harmful forms of child labour helps keep- ones. Two realities are then face to face: ing wages for child labour, high enough to 1. on the one hand, the view of minimally allow human capital accumulation. It seems sufficient education for children depends dubious. Nevertheless, unless appropriate 62 The authors precise « more educat- mechanisms are designed to mitigate the ed women have smaller families, lowering decline in child labour wages, caused by re- population growth rate. These lower rates duced employment options for children, a reduce the proportion of young and make the ban on harmful forms of child labour will task of further improving educational levels likely prove undesirable in poor countries easier.” (Powell, 2014a).

29 J. F. Rougé: SWEET SWEATSHOPS. A REFLEXION ABOUT THE IMPACT OF SWEATSHOPS... Beyond these considerations, the main voiced by the ILO over extended periods preoccupation concerning children’s work of work by children (ILO 2002).” There is is consequences it induces on their physical very few to add. development and on the youngest workers’ However, on the economic ground, it is health. possible to anticipate the macroeconomic ef- fects of this situation. One may consider the Long run health consequences of huge cost of all these deseases and argue on children work. the society’s development. Two senarii are then possible to support: Many empirical studies, concerning chil- 1. The first is to deal with familial solidar- dren work’s consequences in the long run, ities. Invalid or hill unproductive adults have been carried out. Their observations will then be sustained by their famillies. may be summed up thought the conclu- That’s what happens in the traditional so- sions of O’donnell & Alii (2005, 459): cieties. It may always be the case in the “In the longer-term, child work appears future, but at one essential conditi the to have negative repercussions for health. transformation of sociéties must not blow Individuals working in childhood are sig- up the traditional structures of familial nificantly more likely to report illness up solidarity. That is doubful: Castel(1999) to five years later. (…) The result is robust explains how, in Europe and particularly to different empirical specifications and in France, the industrialisation destoyed identification strategies and is consistent these structures. with evidence from Brazil showing that self 2. The second is to consider that growth will reported health in adulthood is lower, the become high enough to sustained an ef- younger the age at entry to the workforce ficient system of public health to care on (Guiffrida et al. 2001; Kassouf et al. 2001). those people. But that means heavy taxes. (…) The nature of the effect differs by gen- Even if taxes system is efficient, it is -ob der. For females, work participation ap- vious that the huge sums used to sustain pears to provoke illness, in the long-term. those people should have been used more For males, there is no work participation properly to sustain a further development effect but illness propensity is increasing through productive investment. with the period of time spent in childhood work. While childhood work raises the risk In both cases, one can reasonably think, of future illness, the health impact is not that the cost of these cares will be uncomen- sufficiently large to impede the growth of surablly higher than what would have been the child. There are two general pathways the one of children work’s decent conditions. through which the long-term effect may op- Such a situation may then constitute an heavy erate. First, it may be that a child suffers a mortgage on future economic growth. workplace accident with long-term conse- Concluding on the matter of children’s work quences for health. Second, it may be that is very hazardous. As pointed out by Becchet- there is a latency period in the development ti and Trovato (2005), determinants of child of child work related health problems. For labour are a too complex phenomenon to example, conditions those are the cumula- allow a simple answer in black & white. If tive effects of sustained exposure to chem- we consider now the particular relationship icals, poor posture or heavy lifting. The between child labour and growth, the situa- evidence that male illness propensity is in- tion is also very intricate. Galli (2001, p. 6) creasing with past job tenure is consistent worked on this special mater and synthesizes with the latent development of health prob- its very interesting survey of literature though lems. This supports the particular concern the following scheme:

30 J. F. Rougé: SWEET SWEATSHOPS. A REFLEXION ABOUT THE IMPACT OF SWEATSHOPS...

human capital accumulation

fertility

health

child growth labour investment and technical change

income inequality

gender inequality

Scheme 3. Child labour and growth the work, due to the important amount of pub- lications on the subject through the history of This balance seems quite unenthusiastic. industrial capitalism. We are more optimistic. An ethicist would Then, in a first part, we asked the question say that everything is a question of “ordinary of the economic value added of sweatshops decency”. Children may have more chances of for the economy. Through two sections, it development in sweatshops, than in the street. has been possible to pinpoint the conditions If compounds or firms respect their specifics in which sweatshops may be beneficial for needs: work adaptation to health and school- the economic growth. First, we saw that the ing necessities, sweatshops may be a good utility of sweatshops depend largely on the thing, even for children. If this ordinary de- aims pursued by investors. If they look for cency is not respected, generally human dig- immediate cash back of their investment, nity is not; sweatshops have then to be con- what we called “financial direct investment” demned because they may do more bad than sweatshops conditions of work are general- good to children, but also to society. In fact, ly just blameable. Furthermore, those kinds it seems that situations have to be studied one of sweatshops are dangerous for the growth by one, in each case. Every global conclusion of countries for two reasons. First because, on children’s work is otherwise hazardous. those investments may be extremely volatile: the factories may be closed as quickly as they CONCLUSION have been opened. Second because they do generally respect nothing, neither the envi- In this work, the aim was to obtain a bal- ronment, neither the people they employed. anced view of sweatshops. That was not an At the opposite, if considered as long term, easy task due to the shortage of data, for this stable investments, sweatshop may be the situation which is often occult and contrary to mean of capital and knowledge accumulation the law. that are the steps of economic growth. It was first important to clarify the phenom- And in fact, in many cases, sweatshops are enon, which was the most documented part of an antipoverty weapon. Rarely sweatshop’s workers may be assimilated to slave, even if

31 J. F. Rougé: SWEET SWEATSHOPS. A REFLEXION ABOUT THE IMPACT OF SWEATSHOPS... it is some time the case. Most of them have ... death) and the worst sweatshops working the freedom of choice (Stakes, 2015); First, conditions (hilliness, accidents, potentially sweatshops give work where there is not death). Exceptionally, sweatshops are even work. Second most of them pay better that the worst. But in fact, facts seem to confirm that normal wage of the area. For Rivoli (2003, generally people do choose to work in sweat- p. 231) “on virtually any dimensions, today’s shops because it is better that the alternatives textile and apparel factories are better place (Powell, 2014a). So the question is not to to work than their historical counterparts in completely ban sweatshops but to be able to New England, American South, Great Brit- enforce a minimal regulation, to make sure, ain, Japan, and 1949 China”. More, by giv- that they cope with an “ordinary decency”. ing formation and earning to woman, even To conclude temporarily on this question, sweatshops may be considered like a mean sweatshops are like many Asiatic courses: of emancipation of women. And researches sour and sweet. Sweet, because they may con- have demonstrated that this is a powerful way stitute, a first step on the path of growth. They 63 to stimulate economic growth . Thus, weat- don’t need a lot of investments to create and 64 shops may contribute to “wealthcare” of may permit to accumulate the knowledge and people and to the growth of nations if they re- the capital to climb the economic ladder. Sour, spect human dignity and contribute to elevate because they are often far from the western 65 the level of skill of populations . standards of comfort at work. Worst, some of In a second part, we analyse the worst con- the sweatshops are dangerous and may kill sequences of sweatshops systems, to won- workers. That is not bearable. der if they are may constitute a barrier to the Of course, this work has to be completed, to sustainable development. First, arguments be refine and illustrated with new data, new against sweatshops are examined through the analyses. But, we hope that it will contribute development of antisweatshops law and the to the understanding of the actual situation. action of the civil society to ban sweatshops. Then, this intelligibility may help to escape Antisweatshops laws are often hypocritical: the worst conditions of sweatshops, with the behind their appearance of humanity, they help of really informed consumer, and re- frequently look to protect the competitiveness sponsible legislators. Subsequently we can of the national industry. But, they are import- hope that sweatshops will disappear and that, ant when they attract our attention on the fun- at least, ILO standards will be the norm. damental principle describe by ILO de define basic human rights at work. LITERATURE Then, we treat the worst consequences of sweatshops on the health of people and par- Abraham-Frois, G. (2001), Dictionnaire des ticularly the one of children. So many peo- sciences économiques. Paris: PUF. ple seem trapped between extreme poverty Aitken, B., Harisson A. and Lipsey R. (1996). (potentially starvation, prostitution, deals Wages and doreign ownership : a compar- 63 For example, South Korea ; Taiwan ; Singapore and ative study of Mexico, Venezuela and the Hong-Kong began their growth with sweatshops. Nowadays United-States. Journal of interna-tional they are “the gang of four tigers” economics, 40, p. 341-371. 64 Term used by Machan, 2007. 65 According to Arnold & Bowie (2003, p. 222) Anker, R (2000). The economics of child la- “Kant’s conception of human dignity provides a clear bour: a framework for measurement, Inter- basis for grounding the obligations of employers to national. Labour Review, 139, p. 257-280. employees. In particular, we argue that respect of dig- nity of workers require that MNEs and their contrac- Arnold, D. G. (2003). Exploitation and the tors adhere to local labor law, refrain from coercion, sweatshops quandary. Business Ethics meet minimum safety standards, and provide a living Quarterly, 13, p. 243-256. wage for employees.”

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