University of North Carolina, USA

DOI: 10.1002/9781118989463.wbeccs223

Sweatshops have been defined as workplaces where workers are subjected to at least two of the following conditions: wages for 48 hours that are less than the overall poverty rate for the nation (this means the wages are insufficient to avoid ill health and malnutrition, to obtain decent housing, and to obtain other basic goods), forced overtime, systematic health and safety risks resulting from a disregard for employee welfare, deceptive employment practices that put workers at risk (e.g., failing to disclose known workplace hazards), or the underpayment of earnings (Arnold and Bowie 2003). In most industrialized nations sweatshops are illegal and are shut down by law enforcement authorities when they are discovered. In developing nations the legal status of such working conditions is more complex. Some of these practices may be lawful (e.g., if minimum wage regulations have not kept up with inflation or if there are few occupational safety rules in place). However, sweatshop conditions are often illegal in developing nations but tolerated because of the inability of authorities to enforce their own laws or the fear that enforcing labor laws may lead employers to move the jobs to other poor nations given the large, surplus global labor supply. The most egregious working conditions violate international labor and human rights standards and conventions.

Economists, especially those with ...

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