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Sweatshops 2000

copyleft by Art Myatt

Business Week, in its October 2, 2000 issue, carried an article about sweatshops in China producing goods for the American market. Entitled "A Life of Fines and Beatings," the article focused on the Chun Si Enterprise Handbag Factory in the city of Zhongshan, in Guangdong Province, southern China. They made Kathie Lee Gifford brand handbags for sale by Wal-Mart and Payless Shoe Source. This is a relatively "safe" operation for Business Week to examine, because Wal-Mart ended their relationship with this particular factory in December of 1999.

The details of working conditions in the factory became public knowledge only because they were so bad that a group 58 workers actually marched to the local government labor office and demanded that officials do their jobs and force the factory to comply with laws about minimum wages and illegitimate fees charged to workers. The workers were able to collect money owed them, but only at the cost of giving up their jobs and city residence permits.

One interesting aspect of this specific incident is that the factory had signed a code of basic labor standards required by Wal-Mart since 1992, though it was nowhere near living up to those standards. Additionally, the factory had been "audited" by an "independent firm" to insure that the code was being followed, but the auditing firm was apparently not particularly critical, or particularly competent. They were willing to believe what they were told by the factory management, and to see what the management wanted them to see; thus, they missed a lot.

Workers hired by this factory - for $22 per month - were required to live in a dormitory run by the factory, for which they had to pay $15 a month. That the factory was able to find hundreds willing to work for a net pay of $7 per month indicates a great deal about the desperate employment picture for people in China today. (The local minimum wage is $55 per month.)

The factory insisted that workers hand over their personal identification cards, giving them in return a temporary resident permit to live in the city. The twist on this practice was that the factory issued permits that were dated as already expired. The city police in the immediate factory district were paid to ignore the "expired" permits, but workers could not get far from the factory without running the risk of being arrested for improper papers. The idea apparently was to limit the ability of the 900 workers to look for other jobs during the hour a day they were allowed out of the factory compound.

In the compound, workers were punched and hit for by guards for talking back to managers or just for walking too fast. (If the source here were an anarchist web site, we might be inclined to doubt the assertion, but the actual source here is Business Week. On the legal principle of an admission against interest, we pretty much have to believe.) Workers were fined for taking too much time in the bathroom and similar infractions, making the hypothetical net pay of $7 per month even less.

The final indignity that drove the group mentioned earlier to protest to the authorities was a new requirement to pay additional fees, in cash, for food consumed at dinner in the dormitories. Business Week quoted the reaction of a former worker to this turn of events: "If we had left the factory then, we wouldn't have had even enough money for a bus ticket home. But if we stayed, we knew we wouldn't have enough money to eat." Only after smuggling out documents to prove the illegal fees on top of sub-minimum wages, the group went to local officials.

The National Labor Committee ( ), an anti-sweatshop group in New York, reported on conditions at the Chun Si factory in May of this year. For months, Wal-Mart denied any connection to the factory; The Business Week article says, "Wal-Mart and Kathie Lee even went so far as to pass out a press release when the report came out dismissing it as ‘lies' and insisting that they never had ‘any relationship with a company or factory by this name anywhere in the world.'" But in reality, the auditors, "Price Waterhouse Coopers LLP (PWC) and Cal Safety Compliance Corp., had inspected Chun Si five times in 1999 and found that the factory didn't pay the legal overtime rate and had required excessive work hours." "Still," according to Denise Fenton, Wal-Mart Director of Corporate Compliance, "the auditors failed to uncover many of the egregious conditions in the factory despite interviews with dozens of workers."

At the factory, the 900 workers were divided into two groups in November of 1999. The lucky 200 worked on the spruced-up lower floor of the factory (which actually had high-quality toilet paper installed in the bathrooms) and were, for a month or so, paid the legal minimum wage without the illegal mandatory overtime. The other 700 worked on the upper floors with the same old "illegally low pay, 14-hour days, exhorbitant fees for meals," but they now were designated as not employed by the Chun Si organization. A new entity named the Yecheng factory had been created on paper, and the 700 had to sign a new labor contract with this organization. (The 700 were in fact still making Kathie Lee handbags.) The auditing firm got to interview a few of the 200 employees, but none of the 700.

The fraud accepted by the auditors was exposed when the group of workers were driven to public protest.

The surprise here is that, because of the anti-sweatshop movement, companies such as Wal-Mart are actually paying even the slightest and most ineffective attention to the wages and working conditions of in their suppliers' factories. The expected result is that this attention is slight and ineffective. There is little reason to trust the voluntary audit programs promised by companies like Wal-Mart or Timberland. They profit from selling the goods produced in this manner, and they would rather not know the details about how those products are made. If not for the anti-sweatshop movement, there would not even be such feeble investigations as have been done.

The National Labor Committee report characterized as "lies" by Kathie Lee and Wal-Mart actually reported on 16 factories in China. The Timberland Co., reacting to the report, had its "independent auditing firm" take another look at its plant in Zhongshan (the same city as the Chun Si factory discussed above). They found that the factory had not fixed the labor code violations found during the previous audit, although the factory management had assured Timberland to the contrary. A group called Social Accountability International, which runs a factory monitoring system for some companies, actually revoked its certification of a Chinese factory producing shoes for New Balance. They found they had somehow not previously noticed many violations cited by the NLC report.

Now there is the Fair Labor Association, proposed by the Clinton White House in 1998, supported by Nike, Reebok, and even Kathie Lee (the company). The Sweatshop Watch organization ( ) has this to say about the FLA:

After exposés in 1995 and 1996 of slave labor in El Monte, California and child labor in Honduran factories sewing for the Kathie Lee Gifford label, the fight against sweatshops has come a long way. Companies that once refused to acknowledge their responsibility for factory conditions by alleging they were "only the buyers" now have Codes of Conduct, undertake more serious internal monitoring of the factories they buy from, and several companies have begun experimenting with different forms of external monitoring using local human rights groups.

But there is much more to be done to clean up this industry for throughout the world, garment workers continue to work long hours for below subsistence wages. They continue to get sick from unhealthy work conditions. And they continue to be intimidated and fired for trying to organize unions.

In 1996, President Clinton and Secretary of Labor Robert Reich created a presidential task force whose goal was to work towards eliminating sweatshops. Known as the White House Apparel Industry Partnership, the task force consists of companies, trade unions, human rights and religious groups. For two years, the Partnership has been meeting to try to create an association that would set workplace standards for the industry and a means of monitoring compliance with those standards. When the companies could not move labor and human rights groups from their position that a living wage must be part of the standards, the companies, along with some human rights groups, met in secret.

In November 1998, a subgroup of the Partnership announced that they had come to an agreement to form a Fair Labor Association (FLA). The two unions (the Union of Needletrades, Industrial and Textile Employees and the Retail, Wholesale and Department Store Union) and the ecumenical Interfaith Center for Corporate Responsibility refused to sign the agreement because of its bias in favor of the companies. However, the Lawyers Committee for Human Rights, the National Consumer League, the RFK Memorial Center for Human Rights, and the International Labor Rights Fund joined Nike, Reebok, Liz Claiborne, Phillips-Van Huesen, Patagonia, L.L. Bean and Business for Social Responsibility to support the FLA. While the President called this agreement an historic event, it is more accurately described as an historic sell-out. A close look at the standards and the monitoring plan show that the Fair Labor Association will not guarantee real improvements in workers' lives.

One way and another, the anti-sweatshop movement that started on America's campuses is beginning to get results. The ideal result would of course be a strong and active labor movement in those countries where sweatshops are now common - including the United States as one of those countries. Here, sweatshop conditions are often associated with "illegal" immigration, similar to the practice in China. In the United States, Mexico supplies many of the workers for the farms and cities of the United States, and the requirement to have a green card makes them illegal. In China, the Chinese countryside supplies the cities with workers, and the requirement for residence premits makes the workers illegal. In either case, the illegal status greatly weakens the ability of workers to deal with oppressive employers.

Globalization, as defined by the World Trade Organization, the International Monetary Fund, the General Argeement on Trade and Tariffs, and the rest of the alphabet soup of "free trade" organizations means that investment capital is free to jump across borders, or flow, or however it gets from place to place. Trade goods of all sorts are free to move from one country to another to another without restriction. Patent and copyright laws as understood by the United States are to be enforced in every corner of every continent. Human rights for human beings and the actual working human beings themselves are to be kept where they are and suppressed in place - unless, of course, specific sorts of workers such as computer technicians might best serve corporate interests by being allowed across borders, in which case an exception has been written into the law.

Globalization, as defined from the other side of the fence, would mean that the freedoms and the rights of human beings are enhanced throughout the world, that the environment is protected, that democracy is built up or rebuilt. and that the needs of people, not the profits of corporations, are given highest priority in all institutions of government. It is really not a question of being for or against globalization. It is a question of what kind of globalization you support. The anti-sweatshop movement pushes in the direction of the best kind of globalization.

Art Myatt is a photovoltaic engineer and technical writer at Energy Conversion Devices in Troy, MI.

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