07/10/2013 06:43 pm ET Updated Sep 09, 2013

The Psychology of Sweatshop Labor

An echo of outrage was heard following the recent tragedy in Bangladesh, where a structurally unsound building collapsed, killing thousands of workers who were making products for U.S. consumers. The echo is a familiar one, as various high-profile labor abuses involving major international brands such as Nike, Apple and the Gap, have occurred over the past decades. But like past abuses, the echo of outrage fades, and the media cycle moves on.

The use of questionable labor practices, popularly known as "sweatshop labor," is widespread in the production of consumer goods. In the chocolate industry alone, the U.S. State Department estimates that more than 100,000 children are working under the worst forms of child labor in the Ivory Coast, which supplies approximately 40 percent of the world's chocolate (Global Exchange Report, 2005). While economists and activists disagree about the costs and benefits of such practices, research organizations consistently have found that consumers have a strong preference to purchase products made without sweatshop labor. Since consumers are concerned and often outraged when labor abuses occur, the question remains as to why demand for products that guarantee favorable working conditions is so low.

It seems if consumers really cared, there would be more demand for sweatshop-free products and more opportunities for companies to profit from such products. Even if the additional cost was entirely passed onto the consumer, research suggests it would be minimal and an insignificant surcharge to the consumer. But sweat-shop free products are limited -- especially clothing, and with few exceptions, the supply chains of everyday retailers are opaque and hidden from view.

It turns out there are a variety reasons that may explain why we find ourselves in this conflicting situation:

First, while surveys suggest people do not endorse the use of sweatshop labor, what people say and what they actually do is often different. Consumers may not really disapprove of sweatshop labor and instead turn to economic justifications. Like many economists, these consumers may feel their participation in this system is a necessary evil that actually yields long-term benefits such as economic development, or is a better option for the workers than toiling in fields. People may also be motivated to agree with justifications and consider a company less unethical especially when they strongly desire a particular product. It is easier to believe sweatshop labor is okay because it helps economic development than to sacrifice favorite products.

Second, as humans, we tend to be less sensitive to harms that occur away from us than those occurring in our backyard. It is easier for people to hire a company (by actively shopping there) to make clothes using sweatshop labor than to hire the workers directly, lock them in the basement, and never offer them bathroom breaks. Humans are wired to not harm each other. However, when our system becomes indirect, filled with intermediaries, and distanced by space, our emotional compass no longer works. Whatever harm is being done is abstract and unemotional.

Third, if we care about the harm, we may actually be motivated to avoid knowing about it. Julie Irwin and her colleagues from the University of Texas have found that people are less likely to ask about labor information, even when they say it is very important to them. Instead, they prefer to remain willfully ignorant about the labor conditions behind their products. Ultimately, consumers do not want to be in a position where they know something does not fit with their moral view of the world -- sometimes not knowing feels better.

Fourth, when tragedies such as Bangladesh happen, our emotions are intense. We cannot believe such atrocities are able to happen. But over time, emotions wear out. The heat of the moment has faded and our motivation to change the situation fades.

Those who actively endorse the use of sweatshop labor, such as economists, should carefully consider the merits of their argument. If the cost is passed onto the consumer, it should not impact the company that is sourcing the product or the opportunity for economic development. If anything, a company should be able to demand higher quality workers by offering better working conditions. This argument is also based on shaky moral ground. If sweatshop labor is justified because the next best option is worse, such as toiling in the field, does that make the use of sweatshop labor ethical? This would be the equivalent to saying: it's okay to lock someone in my basement if the alternative is that they risk getting killed by someone else.

In an effort to alleviate consumers' guilt and conflict surrounding sweatshop labor, the market should offer accessible sweatshop-free products, but the first step has to come from the market. Even if consumers demand something, if companies do not supply it, consumers have to accept the existing options. Taking this acceptance as a signal for endorsement, companies may fail to see the opportunity in offering products that are sourced without sweatshop labor.

Consumers, companies, and labor would all stand to benefit, and the echo of the Bangladesh tragedy will be a distant memory.