The 2013 collapse of the Rana Plaza garment factory in Bangladesh, which killed more than 1,100 people, reignited worldwide calls for new labor laws and increased government regulation in poorer countries that produce garments in so-called sweatshops. However, these calls for laws and regulation fail to view sweatshops in the proper historical perspective.
Sweatshop is a common term used to refer to factories that typically produce apparel; that have very low wages by modern U.S. standards, long working hours, and unsafe or unhealthy working conditions; that often don't obey labor laws; and that would generally be considered unpleasant places to work by most citizens in wealthy countries.
Sweatshops first appeared in Great Britain in the late eighteenth century and persisted there until the early twentieth century. In the United States, the first textile sweatshops appeared in the early nineteenth century in Rhode Island and Massachusetts. Virtually every wealthy country in the world had sweatshops at one point in their past. Sweatshops are an important stage in the process of economic development. As Jeffery Sachs puts it, "[S]weatshops are the first rung on the ladder out of extreme poverty" (2005, 11).
This article traces the role sweatshops played in the process of economic development in wealthy countries today. It also examines the role that labor laws played in the eventual improvement of working conditions. The conclusion contains historical lessons for countries where sweatshops are located today.
Sweatshops in Nineteenth-Century Great Britain and the United States
"Whenever I raise the point that it is immoral to shut us up in a close [sic] room twelve hours a day in the most monotonous and tedious of employment, I am told that we have come to the mills voluntarily and we can leave when we will. Voluntarily!... The whip which brings us to Lowell is necessity. We must have money; a father's debts are to be paid, an aged mother to be supported, a brother's ambition to be aided and so the factories are supplied. Is this to act from free will? Is this freedom? To my mind it is slavery." (1)
These were the words, in 1845, of Sarah Bagley, who worked in Lowell, Massachusetts, and became the vice president of the Lowell Union of Associationists, a utopian reform organization. But they could easily be the words of an antisweatshop activist describing Third World sweatshops today.
Working conditions have been harsh and standards of living low throughout most of human history. Farmers worked long hours for near-subsistence returns for much of recent human history. There is no doubt that chattel slavery imposed horrid working conditions and standards of living on innumerable people. But it wasn't until the Industrial Revolution that something resembling modern-day sweatshops emerged.
Prior to the Industrial Revolution, textile production was decentralized to the homes of many rural families or artisans, and output was limited to what could be produced on the spinning wheel and hand loom. In 1733, the invention of the flying shuttle increased the demand for yarn by boosting each weaver's production. Yarn spinning was mechanized in 1767 with the invention of the spinning jenny, and water power was harnessed shortly thereafter. With these inventions and steam power later, large-scale textile factories that are similar to today's sweatshops emerged.
The conditions in these early sweatshops were worse than those in many Third World sweatshops today. In some factories, workers toiled for sixteen hours a day, six days per week. Attendance at traditional festival days was curtailed because factories would fine workers for absences. The working conditions were unhealthy and dangerous. Dust from textile fibers was inhaled in poorly ventilated rooms, and workers were maimed by fast-moving machinery (Stearns 2007, 35). Child labor was common. (2) Factories employed orphan children from London and other major cities in exchange for providing them room and board. (3) As historian Peter Stearns summarizes the situation, "Extensive use of child and female labor was not in itself novel--families had always depended on work by all members to survive--but use of children and young women specifically because of the low wages they could be pressed to accept reflected the pressures of early industrial life and unquestionably constrained the nascent working class in the factories" (2007, 34).
It wasn't just the work in the factories that was dangerous. The cities themselves were unhealthy. Their swelling population and poor sanitation led to the spread of disease. Housing was cramped, poorly constructed, and sometimes expensive. On many margins, the quality of life in cities was lower than in the country. Yet workers flocked to the mills. The proportion of people in Great Britain living in cities with more than five thousand people rose from 21 percent in 1750 to 28 percent in 1800 and then ballooned to 45 percent by 1850 (Mokyr 2009,456). Meanwhile, the share of the labor force working in agriculture shrank from 35 percent in 1801 to 22 percent in 1851 (Mokyr 2009, 476). Why did people move to the cities in such numbers? The exodus was in part due to involuntary enclosure of agricultural lands, but also the rural folk, much like today's Third World sweatshop workers, were attracted by the opportunity to earn higher wages than they could elsewhere. In fact, economist Ludwig von Mises defended the factory system of the Industrial Revolution in much the same manner as I and others have defended modern sweatshops (see Powell 2006, 2014; Powell and Skarbek 2006; Powell and Zwolinski 2012; Clark and Powell 2013), writing, "The factory owners did not have the power to compel anybody to take a factory job. They could only hire people who were ready to work for the wages offered to them. Low as these wage rates were, they were nonetheless more than these paupers could earn in any other field open to them." He continued, "It is a distortion of facts to say that the factories carried off the housewives from the nurseries and the kitchens and the children from their play. These women had nothing to cook with and to feed their children. These children were destitute and starving. Their only refuge was the factory. It saved them, in the strict sense of the term, from death by starvation" (1998, 615).
Mises's argument is supported by historical evidence. Economist Joel Mokyr reports that workers earned a wage premium of 15 to 30 percent by working in the factories compared with other alternatives (2009, 457). The transformation of Great Britain during this time was dramatic. As economist and historian Donald McCloskey describes it, "In the 80 years or so after 1780 the population of Britain nearly tripled, the towns of Liverpool and Manchester became gigantic cities, the average income of the population more than doubled, the share of farming fell from just under half to just under one-fifth of the nation's output, and the making of textiles and iron moved into steam-driven factories" (1985, 53).
The increased income translated into meaningful improvements in the standard of living. McCloskey reports that "[t]he amounts of bread, beer, trousers, shoes, trips to London, warmth in winter, and protection against conquest increased from 11 [pounds] per head in 1780 to 28 in 1860.... Because he produced two-and-a-half times more than his great-grandfather produced in 1780, the average person in 1860 could buy two-and-a-half times more goods and services" (1985, 56). Peter Lindert and Jeffery Williamson similarly find impressive gains in the standard of living between 1781 and 1851. Farm labor's standard of living went up more than 60 percent, blue-collar workers' standard increased more than 86 percent, and overall workers' standard increased more than 140 percent (1985, 198). (4) Along with this increase in the standard of living came a decrease in the share of women and children working beginning sometime between 1815 and 1820. As Lindert and Williamson summarize, "The hardships faced by workers at the end of the Industrial Revolution cannot have been nearly as great as those of their grandparents" (1985, 199).
By 1851, Great Britain's annual...