Sweatshops and monopsony power – a review

Michael Roberts Blog

Leicester is a medium-sized city in the centre of England.  It has come into the limelight in the last few weeks because of an outbreak of COVID-19 in the city, forcing a local lockdown, while the rest of England starts to ‘come out’.  Leicester has a relatively high British Asian community and many are concentrated for work in the garment industry.  And it is here that the COVID outbreak seems to have emerged.

The reason is clear. Garment workers in Leicester work out of tiny, unsafe factories or even homes, employed for below poverty wages ($5 an hour!) and they have worked throughout the coronavirus crisis lockdown. These small businesses had to carry on because there was really only one buyer, the online retailer, British Asian owned BooHoo.  Like Amazon, Boohoo has made a fortune during the pandemic with shop-based retailers in lockdown.  Its profits are registered in the tax…

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