What effect do so called “sweatshops” have on local economies?

I’ve heard a lot of people say that warships damage communities by creating lots of low-wage jobs. But those jobs have to be paying well, because people obviously want to work them. If they don’t want to work in those conditions, they should just quit.

So what’s effect do sweatshops have on local economies? Do they tend to improve local economies and provide jobs, or are they actually bad?