Here's a question. Suppose you see people lining up for hours, and people willing to pay a month's salary in bribes, in order to get a $2 a day factory job. What might you conclude? Would you guess there are higher-paying jobs around, but the people are too lazy to look for them? Here's my guess: No matter how unattractive to us that $2 a day job is, it might be that person's best-known prospect.
New York Times reporter Nicholas Kristof recently wrote "Inviting All Democrats" in the Jan. 14 New York Times Online, a story documenting the plight of Cambodia's poor. In Phnom Pen, hundreds of Cambodians traipse through trash dumps scavenging for plastic bags, metal cans, bits of food and whatever else they can find to sell. Kristof says: "Nhep Chanda averages 75 cents a day for her efforts. For her, the idea of being exploited in a garment factory -- working only six days a week, inside, instead of in the broiling sun, for up to $2 a day -- is a dream."
Many Democrat and Republican politicians, union leaders and academic elite say that paying somebody $2 a day is exploitation. They've called for actions against American companies who exploit Third World workers through low pay, use of child labor and poor working conditions. But let's examine this with an eye toward asking whether exploitation is the right word to use.
Let's start off with a personal question. Suppose you're earning $1,500 a month, and I come along and offer you a job paying $3,000 a month with better working conditions. In no way do I coerce you into accepting my job offer. If you accept my job offer, then the only unambiguous conclusion is that you saw my offer as being superior to your next best alternative. When a person is offered an alternative, superior to his next best alternative, how much sense does it make to characterize it as exploitation?
If Nhep Chanda, who earns 75 cents a day toiling in nasty trash dumps, is offered a factory job at $2 a day, has she been made better off or worse off? Any reasonable person would conclude that she's better off. When one person makes another person an offer that makes that person better off, does it make sense to characterize it as exploitation?
While we're at it, we might ask if anti-free trade demonstrations and other public pressures stop companies from having manufacturing facilities in places like Cambodia, paying $2 a day wages, will people like Nhep Chanda be worse off or better off? In other words, do we help people who have few miserable alternatives by destroying their best one?