How To Help the Developing World

Raveena Aulakh is making an impression over on Hacker News with her investigative article about child labor in Bangladesh sweatshops.  She documents a bit of the life of Meem, a nine year old worker, and laments that Meem works at all, and especially in these conditions, while acknowledging that,

Cheap fashion has fuelled a social revolution in Bangladesh. It has given women more economic freedom, and to an extent, the power to make some decisions. By all accounts, working women are changing their lives, their families’ lives. There is more food in homes, and cleaner clothes. There is electricity, even if it’s one bulb, and there are toilets.

So, listen, what can actually be done about sweatshops?  Here are some things that assuage first-world guilt but do not actually help:

  • “Fair trade” programs.
  • Buying American.
  • Calling for stricter labor laws in the developing world.
  • Moral indignation.

The truth is, we don’t really know how to help Bangladesh and other countries in its spot.  Nobody has solved the development problem in a really good way.  But there are a few things that seem like they’re at least better than nothing:

  • Loosen immigration restrictions in the developed world.  Meem from Aulakh’s article makes $32 per month.  A full time job at US minimum wage is $1,190 per month.  If a relative of Meem’s comes to the US and makes minimum wage, and then spends 90% of her wage on supporting herself in the US, that leaves her with $119 in excess income.  If she then sends half of that home, that is $59.50, nearly double what Meem makes.  Going abroad to relatively high-paying jobs and remitting money back to the developing world is huge.  The World Bank estimates that in 2013, remittance to the developing world will be around $400 billion.  This dwarfs official aid programs.
  • To the extent that aid — either governmental or private charity — goes to the developing world, it’s probably best if such aid is in the form of direct cash transfers.  Shockingly enough, poor people in the developing world know how to spend money to help themselves — they don’t in general need your paternalist programs.
  • And, hey, maybe we should stop bombing random places in the third world.

Will programs like these make sweatshops disappear?  No.  They won’t.  But they may help in some meaningful way.  Very little else is on offer.

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