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INTRODUCTION
The term sweatshop emerged in the popular literature around the middle of the 19th century and referred to the 'sweating system' where a middleman subcontracted to make garments on a piecework basis and employed people in small workshops under harsh working conditions. In more recent times the term has been applied to factories operated by developed-country MNCs or by their subcontractors in developing countries. Both the scholarly and the popular literature have used the term 'sweatshop' pejoratively when writing about conditions in such establishments, arguing that working conditions, wages and worker protection in such establishments are below either labor market standards in the host countries or inadequate when judged in the broader context of an adequate subsistence wage.1
In this study, we examine worker attitudes in two firms that have been characterized as sweatshops by the National Labor Committee (NLC), one of the more influential anti-sweatshop organizations (National Labour Committee (NLC) and CEADEL, 2007, NLC and CEADEL, 2009). This study surveys workers at two firms that have been identified as exemplifying sweatshop conditions by the NLC to evaluate how outsourcing of labor-intensive activities to third-world countries has contributed to the working conditions and wages in these countries compared with the alternatives faced by the workers, to evaluate if the mix of compensation reflects employee preferences, and to evaluate how company responses to protests have impacted worker satisfaction. While our study does not support the characterization of these firms as sweatshops, we use this term for them so as not to deflect any criticism of the firms by changing the semantics of the discussion.
A substantial scholarly literature has developed debating the relative merits of sweatshops. However, a substantial gap in the empirical literature on working conditions remains. On the theoretical level, scholars have questioned whether the background conditions necessary for textbook economics to work are present in sweatshop labor markets, and they have attempted to identify economic mechanisms that may not make the sweatshop labor demand curve downward sloping (Arnold and Bowie, 2003, 2007; Arnold and Hartman, 2005, 2006; Arnold, 2010; Miller, 2003; Pollin et al. , 2004). Other scholars have argued that these critics are mistaken that the lack of perfect information, possibility of efficiency wages, consumer demand for ethical goods,...