Business Finance
ECO 6655 Troy University Understanding Sweatshops Reaction Essay

ECO 6655

Troy University


Question Description

I’m trying to study for my Law course and I need some help to understand this question.

The assignment is to write a reaction essay after reading the following two academic articles:

Skarbek, et. al. on working conditions in sweatshops: (Links to an external site.)

Note, you will need to log into the Troy Library page to view this article.

Powell and Skarbek on wages in sweatshops:

Questions to focus on:

1. Which economic concepts can be used to better understand sweatshops and manufacturing in the developing world?

2. How could domestic policy improve outcomes for workers in sweatshops?

3. How could domestic policy harm workers in sweatshops?

4. Do international protests help or harm sweatshop workers?

Your response should not exceed 2500 words, and should be at least 2000 words.

Extra resources:

Krugman on sweatshops: (Links to an external site.)Links to an external site.

Kristof on sweatshops: (Links to an external site.)

Student has agreed that all tutoring, explanations, and answers provided by the tutor will be used to help in the learning process and in accordance with Studypool's honor code & terms of service.

Final Answer



Reaction Essay: Understanding Sweatshops
Institutional Affiliation




Reaction Essay: Understanding Sweatshops
Sweatshops are an opportunity for people in developing countries. However, few
individuals from developed countries regard working in these third world factories (sweatshops)
since they regard the wages and working conditions in these factories to be worse than
opportunities they can get from developed countries. Sweatshops and manufacturing in the
developed world can be understood using various economic concepts. Also, domestic policies
present both positive and negative impacts on the workers in sweatshops. Moreover, it is
essential to understand the influence of international protests on sweatshop workers. This paper
reviews the academic article “Sweatshops, Opportunity Costs, and Non-Monetary
Compensation: Evidence from El Salvador” by Skarbek et al. (2012) and “Sweatshops and Third
World Living Standards: Are the Jobs Worth the Sweat?” by Powell and Skarbek (2004).
Skarbek et al. (2012) used field interview evidence to investigate alternative opportunities
for employment for sweatshop workers in El Salvador. The researchers also examined the
perceptions of these workers on the types of non-monetary benefits from the current sweatshops'
employment. On the other hand, Powell and Skarbek (2004) compared wages in the apparel
industry and individual firms' wages that are accused to be sweatshops as a measure of living
standards in economies in developing countries. Together combined, the two articles assist in
understanding the economic concepts to understand sweatshops and manufacturing in the
developing world, the influence of domestic policies on sweatshop workers, and the influence of
international protests on sweatshop workers.



Economic Concepts to Understand Sweatshops and Manufacturing in the Developing
The two academic articles present various economic concepts that can help to better
understand sweatshops and manufacturing in the developing world. For example, Powell and
Skarbek (2004) demonstrated that voluntarily entering a labor contract after an agreement
between employers and employees helps to understand sweatshops better. When workers and
employers voluntarily enter a labor contract, they will both feel satisfied with the working
condition no matter how external observers may view the wages be low. In fact, economists have
different views on the wages in sweatshops. The first view is that labor demand curves are
sloping downwards and the second belief is that this does not happen (Powell & Skarbek, 2004).
This shows that the views of economists cannot be used to understand operations in sweatshops
and manufacturing in developing countries but rather the view depends solely on the workers
It is also believed that multinational shops have better pay compared to domestic shops.
The works of economists are characterized by the analysis of the wages that employees get in
sweatshops. In such an analysis, there is rich evidence that economists believe that multinational
firms are more beneficial than domestic ones (Powell & Skarbek, 2004). The argument is that
multinational firms offer better...

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