But while it shocks Americans to hear it, the central challenge in the poorest countries is not that sweatshops exploit too many people, but that they don’t exploit enough.Talk to these families in the dump, and a job in a sweatshop is a cherished dream, an escalator out of poverty, the kind of gauzy if probably unrealistic ambition that parents everywhere often have for their children.
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When I defend sweatshops, people always ask me: But would you want to work in a sweatshop? No, of course not. But I would want even less to pull a rickshaw. In the hierarchy of jobs in poor countries, sweltering at a sewing machine isn’t the bottom.
My views on sweatshops are shaped by years living in East Asia, watching as living standards soared — including those in my wife’s ancestral village in southern China — because of sweatshop jobs.
As in most instances, personal experience shows that reality is messier than our ideals would like.
I mentioned a while back that I had an idea about how tariffs would work if I were made king, and while I am not ready to present a coherent explanation, the basic idea is as follows: Tariffs levels would be applied for each trading partner of the US based on a checklist of comparative regulations.
Before I begin, however, I will reiterate that I am mostly a deregulation type guy with respect to smaller, private, and non-financial companies. On the other hand, while there is good regulation (FDIC insurance) and bad (SOX), financial companies, publicly traded companies, and large multinationals do require more strict regulation in return for the special (often government-granted) privileges they receive.
In manufacturing specifically, I would like to see a steep reduction in many regulations, but find them necessary for Air/Water Safety, Worker Safety, and Product Safety.
To use an example, the plan would look something like this: If OSHA is considered essential regulation, and if meeting OSHA standards adds 10% to the cost of a toilet made in the US, and no OSHA equivalent exists in India, slap a 10% tariff on toilet bowls coming from India. Same with Clean Air Act, Clean Water Act, CPSC, food safety, etc. If the trade partner has equivalent regulations, then no tariff.
Of course, I don't advocate a per product breakdown, but a scale could easily be developed for most industries, data already exists on regulatory "burden" costs. Here is the twist, however. While half or more of the tariffs collected would go to however government decides to spend it, a certain percentage would be reserved and made available to help developing countries institute these safety programs on their own. In the process, it:
- Helps level the playing field for American manufacturers
- Allows continued foreign development without too large a burden
- Provides incentive for individuals & companies work for local safety reform
- Provides funds to help governments initiate such reform
- Leads to more fair and free trade as tariffs are lowered as a reward for safety reform
- Will help improve the quality and safety of imported products
- Provide a pathway from fair trade to free trade that benefits most
I would apply an additional set of tariffs to industries that have a national security interest, such as agriculture and autos.
I have to think about it more, but that is where I'm at for now.
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