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Compared to What? The Counterfactual to Sweatshops in Developing Countries

One of the most tiresome, useless debates in economic policy is over the merits of sweatshop employment in low income countries. On the one side we hear cries of Exploitation! which are certainly correct; these are highly exploitative operations, with rock-bottom wages and autocratic and dangerous working conditions. On the other we hear that this is the bottom rung on the grand ladder to riches, and the very fact that there is demand for these jobs shows they provide desperately needed income.
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