Commentary

How Your T-Shirt Saves the World

Garment factories in poor countries might look dirty and dangerous to westerners, but in fact, they are one of our best hopes for poverty reduction and human development.

The strangest thing about the debate about “fast fashion” and garment factories in poor countries is that it carries on as if there were no research on the subject. Western activists rail against “sweatshops”, but among researchers and economists from left to right there is a consensus that these jobs are the stepping stones out of poverty. All countries that have managed to industrialize its economy and combat poverty in modern times have done so by moving into such labor-intensive exports markets.

Garment factories in poor countries might look dirty and dangerous to westerners, but in fact, they are one of our best hopes for poverty reduction and human development.

Again and again we are supplied with examples of bad working conditions and lousy wages in garment factories in Cambodia and Bangladesh. These countries are incredibly poor compared to the west, and it is easy to create a shocking impression by putting footage of poor workers side by side with footage of spoiled brats wearing their clothes. But that is just lazy sensationalism. If you want to improve the lives of the poor you must analyze how those jobs affect their situation and the economies of those countries.

In fact, few countries have seen such rapid progress as Bangladesh and Cambodia in the last decade, according to the World Bank. The number of extremely poor in Bangladesh fell from 44 to 26 million between 2000 and 2010, despite the population growing by 15 million. Since 2004, the level of poverty in Cambodia has more than halved, from 52 to just over 20 percent. It is “one of the best performers in poverty reduction worldwide”, according to the World Bank.

This is a stunning success in the countries that need it the most, and the export sector has been instrumental in bringing it about. It increases the workers’ productivity, and therefore also their wages and working conditions, which has been especially important for women. In a study from the International Food Policy Research Institute, the researchers show that the increase in Bangladeshi wages from the garment sector “dwarfed” the rise attributed to government programs.

In its report on Cambodia, the World Bank says that if more people are to benefit from this positive development, there is a solution that will make every critic of globalization think it is a typo: “Use the same working conditions that are found in the clothing factories and apply them to other industries.”

And the most important thing is that the new knowledge and technology these factories bring in facilitate the creation of new companies and industries. The garment industry in Bangladesh was kick-started in 1979 when a local entrepreneur and South Korea’s Daewoo trained 130 workers in modern production. In 1987, Bangladesh had hundreds of garment-export factories, exports had surged and 115 of the original 130 workers had left to start their own businesses.

Obviously even the best jobs in very poor countries look bad compared to what we are used to in Europe and America, but that is not the alternative in an economy at a low level of capital and education. As a worker I interviewed in Vietnam once put it, the main complaint to management was that she wanted the factories to expand so that her relatives could get the same kinds of jobs.

One may well bemoan the fact that progress is not being made even more quickly. I can understand that. I also want everything — now! But things are moving faster than ever, and it is happening because of the very industries the activists have reserved their special contempt for. The world needs more jobs like these, not fewer.

Johan Norberg is a Swedish writer and a senior fellow at the Cato Institute.