When discussing sweatshops and their possible solutions, it’s worth mentioning that any wage before a subsistence level still remains the sweatshop one. All industry participants can’t escape a common link between paying a living wage and ending one of the worst abuses associated with sweatshops, exploiting poverty. Historically, sweatshops originated after the Industrial Revolution, and they described the subcontracting system where middlemen earned their profits from any margin between the amount received for contracts and the one paid to workers.
This margin was sweated from employees as they got minimal wages for their excessive hours spent in unsanitary conditions. The need for a living wage shouldn’t be underestimated if people want to end sweatshops. It’s necessary because the modern market is no longer the best allocator of available resources under sweatshop conditions (in global economy). The reality is so harsh that third world countries are involved in their desperate competition to attract more jobs and they entered a dangerous downward spiral. They keep fighting with each other, reducing tariffs, regulations and taxes. They also set a legal minimal wage below a subsistence level, which is a wrong move.
Besides, multinationals want to remain an open-playing field, so they search for any poverty to exploit because they find the lowest wages in places with the greatest misery and unemployment. For example, Nike chooses Vietnam to pay a very low wage, while Disney goes to China because of very low wages, etc. Don’t forget that a large number of people keep living at the edge of their starvation, so there is no end to how low wages can be.
This scaring poverty is enough for major corporations and companies to grease this downward spiral as many desperate people and regions keep struggling with each other to find any work. Most of them even have no idea what normal wages are in other countries in the world. They are in modern global economy with no tools and knowledge to defend their rights. That’s why such workers are vulnerable and isolated. They have nowhere to turn because courts and labor ministers are dysfunctional. If they try to raise their voice to defend their rights, they will be fired at once. The main reason is that there are many other desperate people outside and they are ready to take any work.
When discussing sweatshops and their possible solutions, it’s worth mentioning that any wage before a subsistence level still remains the sweatshop one. All industry participants can’t escape a common link between paying a living wage and ending one of the worst abuses associated with sweatshops, exploiting poverty.