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Journal of Business Ethics

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01.10.2013

The Ethical and Economic Case for Sweatshop Regulation

verfasst von: Mathew Coakley, Michael Kates

Erschienen in: Journal of Business Ethics | Ausgabe 3/2013

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Abstract

Three types of objections have been raised against sweatshops. According to their critics, sweatshops are (1) exploitative, (2) coercive, and (3) harmful to workers. In “The Ethical and Economic Case Against Sweatshop Labor: A Critical Assessment,” Powell and Zwolinski critique all three objections and thereby offer what is arguably the most powerful defense of sweatshops in the philosophical literature to date. This article demonstrates that, whether or not unregulated sweatshops are exploitative or coercive, they are, pace Powell and Zwolinski, harmful to workers.

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Powell and Zwolinski (2012). All subsequent parenthetical references are to this article.

For the general debate over the relationship between minimum wage increases and employment levels, see, e.g., Card and Krueger (1994, 1997); for a range of developing world studies looking at actual regulatory compliance and the associated wage and employment effects, see Strobl and Walsh (2000), Bell (1997), Maloney and Nunez (2001), and Rama (1996).

For the purposes of this paper, we follow Feinberg (1987) in understanding harm as behavior that causes someone to be worse off than they would otherwise have been. Hence if what we are doing will not be worse for someone, or will even be better for them, then we are not, properly speaking, harming them.

Whether this will occur in practice is, of course, disputed. But we will, once again, grant the truth of this assumption for the purposes of our argument here.

Note that, as these are societies characterized by large resource under-utilization in the form of un- and under-employment, the multiplier effect here might be quite large. For a recent summary of the vast literature on the link between multipliers and idle resources, see Parker (2011).

Indeed, this might actually overestimate the loss of employment to the developing world in general since consumers might substitute into other goods produced there. If the price of garments made in Mexico goes up 4 %, then those consumers who no longer buy them might buy from other countries in the developing world, thereby party offsetting the Mexican sweatshop employment loss. A 4 % decrease in sweatshop employment thus represents the upper bound of the overall potential developing world sweatshop employment effect given the price elasticity assumed.

These illustrative figures are taken from Harrison and Scorse (2010, p. 270), who note that Nike estimated in 1998 that developing world factory labor costs accounted for about 4 % of the overall product price on a typical $90 shoe.

For the sake of argument, we are once again accepting Powell and Zwolinski’s claim that efficiency wages will not render this a mutually beneficial change for all three groups.

Note that Powell and Zwolinski are quite rightly not using money as a welfare proxy undifferentiated by income. Hence their welfare analysis correctly focuses on the effects on those in the developing world.

We are grateful to an anonymous reviewer for suggesting this possibility.

To see why there are very strong grounds for believing this moral position to be false, consider the fact that it would imply, absurdly, that no amount of welfare increases to the vast majority of all sweatshop workers, however high, can ever justify any amount of welfare decreases to a tiny minority of them, however low. A 100-fold increase in wages to 99 % of all sweatshops workers would, for example, be outweighed by the loss of employment to only 1 % of them. On its face, however, this seems fundamentally implausible.

Arnold, D., & Hartman, L. (2005). Beyond sweatshops: Positive deviancy and global labour practices. Business Ethics: A European Review, 14(3), 206–222.

Bell, L. (1997). The impact of minimum wages in Mexico and Columbia. Journal of Labor Economics, 15(3), 102–135.CrossRef

Card, D., & Krueger, A. (1994). Minimum wages and employment: A case study of the fast-food industry in New Jersey and Pennsylvania. American Economic Review, 84(4), 772–793.

Card, D., & Krueger, A. (1997). Myth and measurement: The new economics of the minimum wage. Princeton, NJ: Princeton University Press.

Cohen, G. A. (1983). The structure of proletarian unfreedom. Philosophy and Public Affairs, 12(1), 3–33.

Cohen, G. A. (1987). Are disadvantaged workers who take hazardous jobs forced to take hazardous jobs? In G. Ezorsky (Ed.), Moral rights in the workplace. Albany, NY: State University of New York Press.

Feinberg, J. (1987). The moral limits of the criminal law, vol. 1, harm to others. New York: Oxford University Press.

Harrison, A., & Scorse, J. (2010). Multinationals and anti-sweatshop activism. American Economic Review, 100(1), 247–273.CrossRef

Maloney, W., & Nunez, J. (2001). Measuring the impact of minimum wages: Evidence from Latin America. World Bank Policy Research Working Paper 2597.

Parker, J. A. (2011). On measuring the effects of fiscal policy in recessions. Journal of Economic Literature, 49(3), 703–718.CrossRef

Pollin, R., Burns, J., & Heintz, J. (2004). Global apparel production and sweatshop labour: Can raising retail prices finance living wages? Cambridge Journal of Economics, 28, 153–171.

Powell, B., & Zwolinski, M. (2012). The ethical and economic case against sweatshop labor: A critical assessment. Journal of Business Ethics, 107, 449–472.CrossRef

Rama, M. (1996). The consequences of doubling the minimum wage: The case of Indonesia. World Bank Policy Research Working Paper 1643.

Strobl, E., & Walsh, F. (2000). Minimum wages and compliance: The case of Trinidad and Tobago. Economic Development and Cultural Change, 51(2), 427–450.

Walzer, M. (1983). Spheres of justice: A defense of pluralism and equality. New York: Basic Books.

Titel: The Ethical and Economic Case for Sweatshop Regulation
verfasst von: Mathew Coakley
Michael Kates
Publikationsdatum: 01.10.2013
Verlag: Springer Netherlands
Erschienen in: Journal of Business Ethics / Ausgabe 3/2013
Print ISSN: 0167-4544
Elektronische ISSN: 1573-0697
DOI: https://doi.org/10.1007/s10551-012-1540-y

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