Paul Krugman’s Article “in Praise of Cheap Labor”

I found Paul Krugman’s article “In Praise of Cheap Labor” very thought-provoking and logical. His article suggested that “bad jobs at bad wages are better than no jobs at all,” and he did a wonderful job analyzing and explaining his position on the issue of cheap labor in Third World countries.

Krugman’s article was written as a polite but harsh response to the hate mail that he received after writing an opinion piece for the New York Times entitled “We Are Not the World.” In this piece, he shared his opinion that the working conditions and wages in the new export industries of the Third World are a “big improvement over previous, less visible rural poverty.” This statement resulted in a moral outrage from opponents of globalization who criticized him for being naïve and corrupt.

In his article, Krugman argues back that what these critics failed to realize is that the main beneficiaries of globalization are in fact, the Third World workers. He uses the Smokey Mountain garbage dump in Manila as an example of the poverty level of Third World countries before globalization. Thousands of families voluntarily lived at the dump scouring through the landfill's rubbish in order to make a living by recycling trash simply because it was the best alternative they had since there were no jobs available. He then goes on to explicate how low wages have assisted in the progress of these countries. For reasons which aren’t fully understood, labor forces such as lower tariff barriers, improved telecommunications, and cheaper air transport reduced the disadvantages of producing in developing countries which made it possible for these countries to break into world market. As a result, competition among companies to get workers grew which also increased wages and ultimately made it possible for ordinary people to improve their living conditions.

In case this explanation wasn’t good enough, Krugman also makes a very insightful point about why opponents of globalization are...