Economists spar over sweatshop protests

From the protestors in Seattle to an MIT grad student's recent request that Nike emblazon his sneakers with the term "sweatshop," the college campus political movement has hit a stride not seen in decades. And while the students - many of them being schooled in the neoclassical economic theories of free trade by their professors - might not have a war to rail against, they have made championing the rights of workers in developing countries their cause of choice.

At first glance, the protestors might appear to be a bunch of wild-eyed students battling their teachers. Now, however, an influential group of mainstream academics are banding to support the college kids.

University of Massachusetts economist Robert Pollin has researched the price of clothes made in Mexico. He says salaries for Mexican workers could easily be raised without affecting sales or corporate profits. Even if wages were doubled for production-line workers, retail prices would have to rise only between 1 percent and 3 percent to cover the extra cost.

Emboldened by his research, Pollin and James K. Galbraith, a University of Texas economist, have put out a letter supporting the students. The two professors are hoping to garner several hundred signatures, including those of respected economists in developing countries. They will post the document on the Web site, when it's completed, of their new organization, Scholars Against Sweatshop Labor.

The letter is meant to counter a high-profile missive circulated last year by the Academic Consortium on International Trade, a group of pro-free-trade economists. That letter was sent to college presidents across the country. The ACIT letter was drafted by Columbia University economist Jagdish Bhagwati, an outspoken free-trade advocate, and attracted the endorsement of 246 academics and economists, including Harvard University's Jeffrey Sachs and Nobel laureate Robert Lucas.

The ACIT letter accused protestors of oversimplifying a complex subject and said their activities could make life harder for third-world workers, who need the jobs that foreign manufacturers provide. In the letter, the piqued profs said students often protested "without seeking the views of scholars in the social sciences, law and humanities who have long discussed and researched the issues involved."

Pollin says the students he's spoken to deny that charge. He and Galbraith have gotten Harvard profs Dani Rodrik and Juliet Schor, New School scholars Robert Heilbroner and Lance Taylor, as well as academics in Korea and India to sign the letter Although the debate is taking place in the halls of academia, it has the potential to hit the malls of middle America. In the 1990s, when Nike was first accused of mistreating workers, the resulting furor led to scads of bad publicity for the sneaker behemoth. Boycotts were organized, and protests were staged around the world. This time around, students have pushed their schools to adopt codes of conduct that require the institutions to make sure hats, sweatshirts and other clothes bearing collegiate emblems are produced in safe, independently monitored workplaces where workers are free to unionize.

The issues, of course, are more complex than simply paying workers more. Shoemakers and subcontractors supplying US clothing often pay more than local firms. Nike's Vietnamese subcontractors pay roughly US$45 a month, far more than those workers could earn at a locally owned plant or on a farm.

Bhagwati says he is tired of seeing first-world students impose their standards on developing countries without understanding the subtleties of the problem. Pollin says the student idealism should be lauded.

About the only thing the two sides agree on is that the debate serves a noble purpose - raising global standards of living and preventing worker exploitation. The two sides, both will tell you, differ only on the best solution.

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