This post from the New York Times Economix Blog is making the rounds (HT: David Skarbek, Steve Horwitz). It’s a really interesting story that discusses how life has changed for Bangladeshi women who have the opportunity to work in the garment industry. Are wages low? By Western standards, yes. However, the opportunities provided by Bangladeshi “sweatshops” have opened other doors. In particular, women are acquiring more education. Mark Perry argues that this is “One More Reason Wal-Mart Deserves [the] Nobel Prize.” John Tierney made a similar argument in 2006. The company certainly has a much stronger case than Barack Obama, Al Gore, or even Muhammad Yunus and the Grameen Bank.
In a related development, The Economist is hosting a symposium on rising Chinese wages. As Chinese workers become more productive, they are able to earn higher wages. I’ve written before that the law of comparative advantage is an anvil that has worn out many hammers. This is another case in point.
How much bad policy would we avoid if policy makers and activists understood that wages in competitive markets are determined by productivity rather than employer caprice? I wrote a Daily Article about this in 2008; the same article was recently translated into Swedish by LvMI-Sweden.
