The Truth About Sweatshops

Whenever we hear about sweatshops overseas, we usually hear a lot of negative comments. Such comments turn out to be myths made of twisted truth. For example, some sweatshops pay workers $2 – $3 per day. This is true, but it’s not true that people in other countries cannot live on that. The purpose of this article is to show how to determine who is lying to you as well as who is trying to get you to almost blindly follow their agenda.

“Sweatshops do not alleviate poverty. The people who are forced to work must spend the majority of their paycheck on food for their families to survive.” – CBS News (Cited by DoSomething.org)

Numbeo

While some people may not agree with me, I believe that Numbeo is a great website with a great source for seeing what the cost of living is like in other areas and countries. That being said, all of my cost of living data will be from Numbeo. If you find a much better source, please, let me know in the comments below and I’ll take a look.

$2 – $3 Not The Same In Other Countries

In India and Bangladesh, $2 in American currency doesn’t end up being equal in their currencies. In India, the current rate is 62.66 Indian Rupees (INR) per American dollar (USD). Keeping this in mind, only USD $2 in India translates to INR 125.33. In Bangladesh, we find that USD $1 is 78 Bangladeshi Taka (BDT). Bearing this in the back of our minds, USD $2 in Bangladesh is BDT 156.

The easy part in this is explaining why all of this matters. It’s easy to sympathize with those in other countries who make much less than we do because we tend to compare their lifestyle to ours. Surely, if Americans were to be paid only $2 per day, we wouldn’t be able to survive at all! We already have a hard time getting by making minimum wage. It boils our blood and we want to make a change. What if I told you that this anger and sympathy, while it’s good to have passionate feelings of fairness and equality across the globe, was quite misplaced?

Cost of Living Is An Important Detail

As I’ve pointed out earlier, USD $1 is not the same as INR 1 or BDT 1. It translates to INR 62.66 and BDT 78. Keeping this in mind, it’s probably a good idea to understand that the cost of living is also drastically different. For example, we might think that USD $5 for a meal at Dairy Queen or McDonalds is a good deal. However, in India and Bangladesh, an inexpensive meal is less than USD $2. Knowing this, what do you think the cost of living is like over there, anyway?

Monthly rent for a one bedroom apartment outside of city center (the main part of the city) in India is USD $90.74 and USD $61.97 in Bangladesh. However, a three bedroom apartment outside of city center is USD $231.12 per month in India and USD $202.83 per month in Bangladesh. Food is a little more expensive than here in America, but isn’t that to be expected?

Numbers Don’t Lie: The Math

India

Now that we know about the exchange rates and the cost of living, let’s see whether sweatshops in India and Bangladesh actually pay its workers enough to live off out there.

According to The Guardian, sweatshop workers in India have been making about 25 pence (p) per hour. In case you’re wonder, 25 pence is the British version of the quarter since it’s a quarter of a pound. 25p in USD is USD $0.38. USD $0.38 is 23.85 INR. These people reported that some workers work 133 hours on top of their eight hour shifts. If this is correct, and these people work seven days per week, that’s 189 hours per week that some of these people work. Clearly, something is wrong because if you multiply 24 by 7, you’re going to get 168 hours in a week. Now we need to figure this out before we can move on.

I could believe that 133 hours per week were being worked throughout each seven-day work week. This would allow for only five hours of sleep per day. While this is utter hell in the real world, it would actually make sense that someone could at least function if they worked like this. Either way, I cannot accurately tell how much they are making because the information is absolutely wrong. Thus, The Guardian should learn to check their numbers before publishing an article with such a touchy subject.

Just for fun, let’s see how much money people are making according to them and see if the math adds up (keep in mind this article was written five years ago). At 189 hours per week, a worker would be making USD $71.82. This converts to INR 4,507.78. Since this isn’t possible, let’s go with my theory of 133 hours per week instead of that only being overtime. At 133 hours per week, a worker would be making USD $50.54, or INR 3,172.14. At 189 hours per week, the monthly salary is INR 18,031.12. At 133 hours per week, the monthly salary is INR 12,688.56. This is considerably less than the average salary after taxes of INR 28,780.58.

The real question that should be asked here is whether or not The Guardian is a trustworthy source of information. They stated that the man who worked 133 hours of overtime on top of his eight-hour shifts worked regularly from 9 AM to 10 PM with two half hour breaks. This means that he worked 12-hour shifts, not eight-hour shifts. Another mistake made by The Guardian was stating that there were some times when they worked until 2 AM the next day, making his shifts 16-hours long from time to time.

Bangladesh

According to DailyMail.co.uk, it’s common for some workers in Bangladesh to earn just CAD $25 per day. In USD, that would be about $19.78. This is based on the assumption that it was a Canadian reporter in the linked article that went undercover and did not properly label their dollar sign. The big question of the moment is now, “Just how much do they make her day?” According to the exchange rates provided by Google, USD $19.78 equals BDT 1,542.81.

If DailyMail.co.uk was right, and if these people worked a full 30 days per month, we’re finding that these people only earning USD $19.78 per day are making USD $593.40 per month. This coverts to BDT 46,284.28 per month. Surely, these people are being overworked. But they’re also being paid quite nicely for it. According to Numbeo, the average monthly disposable salary after tax is BDT 25,852.47, a little more than half of what the sweatshop workers make. If you ask me, I’d say that I’d like to be paid more than the average disposable income after taxes.

According to DoSomething.org, the National Labor Committee says that some women are paid USD $0.24 per garment to sew NBA jerseys that are sold for $140 per garment. No country is specified, but I’m going to assume that this was most likely Bangladesh. USD $0.24 is BDT 18.72. Judging by how much overtime these people work, I’m going to assume that on average, it’s not hard for some of these women to crank out 1,000 jerseys per week per person. This isn’t easy, but it’s doable, I’m guessing.

If this is the case, then yes, it’s extremely hard for these people to live on just BDT 18,720 per month. But What do these people do then, if they can’t afford to pay for anything? I’d say that they probably make enough to get by with their families working. While a mother and father only making BDT 18,720 per month per person is enough to get by, not all families are the same. There may be some families with five kids. If the mother, father, and three of the kids worked, altogether, this would be BDT 93,600 per month. If everybody worked, it would be BDT 131,040. This is definitely more than enough to just get by. It’s numbers like this that can make quotes like the one by CBS News look really questionable.

The Truth: Debunking the Impossible Wage Myth by CBS News

According to my findings with The Guardian, they not only can’t keep their story straight, they don’t know how to do math, either. So I’d say that at least for India, the myth is definitely debunked. In my international economics class, my classmate talked about seeing that many people in India were being paid around USD $5 per day, which is around USD $150 per month. In Rupees, this is INR 9,414.75. This is considerably less than the average salary after taxes, so this myth is debunked on the grounds that the data must have been falsified or the staff at The Guardian are really that incompetent.

Bangladesh was a little more tricky, but in the end, the myth was debunked again. People in Bangladesh are definitely being paid a decent wage if they pool their money together within their families and work hard. Sure, the work is hell and the pay is quite low for one person. But they’re not only making more money in the sweatshops than they would elsewhere, they’re making a real decent salary if they pool their family’s resources together.

What If They Made The American Minimum Wage?: It Doesn’t Matter

Many opposers of sweatshops believe that we should either double the salaries of the workers or at least pay them an American minimum wage. But do these people understand just how much money USD $7.25 per hour is in other countries? I’m not opposed to paying these people more or even working them less. But I understand why most companies don’t pay them more.

It doesn’t matter if we pay these people in Bangladesh the American minimum wage because according to that Canadian who went undercover, they get paid CAD $25 per day, which is USD $19.78. This is much more than the often quoted USD $2 – $3 per day. Can you imagine if they would be paid USD $7.25 per hour? Even without overtime pay, this is a lot of money. If sweatshop workers in Bangladesh were paid this for working only 100 hours per week, that would be USD $725 per week or BDT 56,550. As a monthly salary, this would be USD $2,900 or BDT 226,200. This is nearly 10 times the average salary after tax!

Conclusion

There you have it! It’s now been proven that these sweatshops do pay fairly well compared to other jobs that they might be able to get. If you read the entire article by The Guardian or DailyMail.co.uk, you probably read that these people are living in poverty. While people in India might be having a hard time, those in Bangladesh are doing quite well. In fact, they would be extremely rich if they were paid our federal minimum wage and at an hourly rate.

The point of this mini study was to see whether or not sweatshops were helping or harming an economy overseas. In Bangladesh, this isn’t the case. India is a little different, but it’s still something. Many opposers of sweatshops have a hatred for them because they don’t have all the facts. I have provided far from all the facts, but I hope that this was enough to be insightful and educational.

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2 comments

  1. Except this is all utter crap because each of these companies can more than afford to pay more than this to each worker. It also would make the workers more productive and allow them to make better products and allow companies like Nike to make more money–something that’s been proven by economics for decades. You say “it’s hard for them to live on the wages, but what’s the alternative?” So this makes it all right? Your morals are pretty shady.

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    1. Thanks for the opinion!

      I never said it was the right thing to do. I was just saying that many people don’t understand that there’s a lot of articles that mislead people. For example, the article I mentioned that said people work more hours in a week than actually exist. My point was that there were too things to look at: Exchange rates and the cost of living. Some people make decent money in sweatshops if they’re good at what they do.

      When I say, “What’s the alternative,” I don’t mean, “Too bad, so sad. Get over it.” I’m saying that we need to understand why people work in the sweatshops. Many people choose to work there because it’s better than some of the other jobs available to them due to a lack of skills or a lack of employment in their region. Others work in sweatshops because they feel like the benefits outweigh the costs.

      I, personally, want the sweatshops closed and the manufacturing brought back to America. The reason why these companies outsource is because it’s cheaper. But they’re not breaking international labor laws concerning pay. Mexico, for example, has a minimum wage of $4.14 per day. Not hour. Day. This is why free trade with Mexico takes jobs away from America.

      You say my morals are shady. You’re entitled to your opinion. I know for a fact that there’s a lot that would have to be done to close sweatshops. You have to look at the costs of closing the sweatshops, too. How many jobs will be lost? How will those that rely on the sweatshops provide for their family, let alone eat? A few sweatshops pay for women to go to school, is it worth taking their educational funding away? And if the companies don’t close them freely, you have to do what Trump is suggesting, which is threaten to impose tariffs and renegotiate trade deals.

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