The prevalence of sweatshop labor depends largely on the definition being used. At its most general definition, in which the term refers to work in a confined space that is extremely difficult or dangerous, sweatshops can be considered fairly common. If the definition being used pertains to the commonly-held image of a factory with overworked, underpaid workers, sweatshop labor becomes less common than expected, albeit still prevalent in third-world countries. Following the definition of the United States Government Accountability Office, which states that a sweatshop is any workplace that violates one or more state and federal labor laws, the prevalence spikes, becoming very common. Using an amalgam of these definitions, experts believe that roughly 50 percent of manufacturers — particularly in the garments industry — employ sweatshop labor.
It can be difficult to ascertain the exact number of sweatshops in a particular area due to the fact that these workplaces usually, if not always, violate labor laws. Violations include worker compensation lower than minimum wage, child labor, and a severe lack of safety regulations. As a result, many of these locations tend to disguise their identities as sweatshops through a number of means, including bribery of government officials.
Another factor that adds to the prevalence of sweatshop labor is the economic situation in the country or region. Many individuals choose to work in sweatshops simply because there are no better alternatives in terms of livelihood, even if the compensation still cannot support basic standards of living. This has led to a greater proliferation of sweatshops in third-world economies, where there is a comparative advantage to settling for sweatshop labor rather than not working at all. In turn, the abundance of individuals willing to work for such conditions gives employers more incentive to run sweatshops, as the minimal investment in these workplaces yields higher profits.
Certain economists, such as Jeffrey Sachs and Benjamin Powell, contest the popular opinion that sweatshop labor should be considered illegal. Sweatshop proponents argue that the workplaces are a necessity for more impoverished countries, where sweatshop workers actually earn more than average. Sweatshops are considered an economic stimulus following this train of thought; employers following this philosophy are encouraged to increase the number of sweatshops in poorer countries.
Other experts counter, however, that dropping labor standards in third-world countries creates a downward spiral in which people are willing to work in increasingly worse situations. The demand for work is significantly larger than the number of jobs, making it nearly inevitable that wages and employee rights will continue to trend downwards in response to desperation. Employers who follow this philosophy often make it a point to ensure that none of their laborers work in sweatshops.