Bad medicine: sweatshops and poverty alleviation

Sep 27, 10 Bad medicine: sweatshops and poverty alleviation

Poverty is a problem. It is particularly problematic for developing country governments in Africa for whom the temptation to seek quick-fix solutions is significant. Resources are limited and pressure from activists and donor governments to fix the problem great. Sweatshops are often presented by Western analysts as just such a quick-fix wonder-drug.

Western, urban, individual-centric notions conflating poverty and income poverty (earning little or no cash income) have been prevalent in public policy for years. They are particularly relevant here. If one views poor people as disconnected individuals, each of whom wants nothing more than to earn money so that he/she can buy things, and that the alternative – to be without any income means starvation, deprivation and loss of dignity, it is easy to accept the argument that sweatshops, as bad as they may be, are the lesser of the two options. It is also wrong.

Governments would do well to forget the supposed wonder-drugs and focus on supporting sustainable livelihood strategies

In reality, most poor people in developing countries (particularly in Africa) are rural or peri-urban subsistence food-growing (family) groups engaged in a variety of livelihood activities. Individuals live with, contribute to, and rely on the group, pooling resources, assets and labour to increases the chances of survival. Groups employ a variety of livelihood strategies to acquire the food and non-food items they need. Income is just one of them. They also attempt to build/acquire tangible and intangible assets in order to move away from the edge of starvation (building away from poverty) and improve their resilience to shocks such as illness, price increases or instability (reducing vulnerability).

For sweatshops to be some magic solution, they would need to help poor groups do this. In fact, they have the opposite effect. Sweatshops often pay wages equivalent to other jobs in the area. This is good except that the wages are still extremely low in real terms, so they do not help much, and the hours extremely long, so the employed group members have no time to do anything else (engage in other livelihood strategies) that could help reduce vulnerability. Sweatshop work also involves significant risk to health and sometimes life, further increasing vulnerability. In terms of building for the future – building out of poverty – children working in sweatshops reduces the chances that they will acquire the single most valuable (intangible) asset for the group: education.

This is all exacerbated in the real world as governments sacrifice welfare and human rights to get the sweatshop jobs into their countries, offering tax-breaks at the cost of government spending on public goods, ignoring environmental degradation and allowing labour laws to be weak and/or ignored.

Poverty is complex and difficult to address. Quick fix “solutions” are not only ineffective but also damaging and risky. Governments would do well to forget the supposed wonder-drugs and focus on supporting sustainable livelihood strategies that reduce vulnerability and help people to build away from poverty.