Journal of Labor Research

, Volume 27, Issue 2, pp 263-274

First online:

Sweatshops and third world living standards: Are the jobs worth the sweat?

  • Benjamin PowellAffiliated withSan Jose State University
  • , David SkarbekAffiliated withSan Jose State University

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Many studies have shown that multinational firms pay more than domestic firms in Third World countries. Economists who criticize sweatshops have responded that multinational firms’ wage data do not address whether sweatshop jobs are above average because many of these jobs are with domestic subcontractors. We compare apparel industry wages and the wages of individual firms accused of being sweatshops to measures of the standard of living in Third World economies. We find that most sweatshop jobs provide their workers an above average standard of living.