For the last two years I’ve had the pleasure of speaking to Bozeman High School’s philosophy classes. It’s an experience I thoroughly enjoy. This column is for them.

What are we to make of the situation in which an Indian worker is paid 50 cents to assemble a shirt that sells for $25? Isn’t this worker being exploited?

Before we jump to conclusions, let’s probe deeper. What other costs are reflected in the retail price of the shirt? How about the wages of the cotton farmer? Or the trucker who moved the cotton to the mill? How about the person who wrapped and packaged the shirt? It turns out our worker played only a small role. Could his wage reflect the value of his contribution?

Typically consumers search for the lowest priced goods. Is this morally acceptable? Consider this: You have the choice of two shirts of the same color, style, and quality. One is priced at $25, the other $40. The more expensive is a “fair trade” shirt made of organic cotton. Which would you buy? Choosing the less expensive shirt means you can use the savings to give your child an extra music lesson. Is it “fair” to pay an inflated price to support a higher wage for our shirt maker?

Here is the key. Wages are low in developing countries because workers there are not as productive as workers here. Increasing productivity (i.e., more output for the same quantity of input) is essential to higher wages and improved social well-being.

If U.S. multinational companies are exploiting workers in poor countries, how do we explain the following? Wherever a new factory opens, a major problem is keeping job applicants from storming the gates.

Researchers at the University of Michigan’s School of Public Policy found the following:

• In Vietnam, Nike factory workers earned roughly five times the country’s minimum wage. In Indonesia, it’s roughly three times.

• Affiliates of U.S. multinationals pay, on average, double the local wage in low-income countries.

• A survey of footwear and apparel factory workers in Thailand found that 70 percent of workers regarded their wages as “fair,” and 60 percent had begun to accumulate savings.

These workers flee from other, less attractive sectors of the economy. Usually it’s agriculture, forestry, and mining where unemployment is high, the work dangerous, and the pay dismal.

Complaining that these workers are “exploited” may make us feel righteous. But the people who accept these jobs know they are superior to the next best alternative.

The wages these jobs provide enable parents to send their children to school rather than to work. Here are the results: In 1960, children composed 32 percent of the labor force in low-income countries. Forty years later, following the massive expansion in international trade, it’s 19 percent -- still too high, but a vast improvement.

Imagine what it was like to work in American factories 100 years ago. The labor was repetitive, exhausting, and often deadly. Workers earned wages comparable to those paid in poor countries today. The worst conditions were vividly exposed in Upton Sinclair’s muckraking book The Jungle.

With each passing generation, working conditions in the U.S. have gotten better. And developing countries will move up this curve much faster than we did. Swedish scholar Johan Norberg notes the trend. In 1780, it took England 60 years to double its per capita wealth. In 1880, Sweden did it in 40 years. In 1980, South Korea did in 10.

It takes steady, long-term economic progress -- combined with new technologies, expanding markets, and higher productivity -- to achieve ever cleaner, safer, and healthier working conditions.

We know what countries must do in order to escape poverty. Thirty years ago Singapore, Hong Kong, Malaysia, and South Korea all had sweatshops. Over time employers have acquired capital and workers skills. Now these countries have better jobs at higher wages, and safer, more comfortable working conditions.

Here’s a final thought for the students. Countries that open their economies to trade are more likely to be prosperous and democratic. And democracies do not go to war with one another. By promoting free trade we simultaneously promote peace -- another reason to be thankful this new year.