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Testimony before the Senate: Sweatshop Abuses in China

October, 25 2007 Share

Testimony

before

United States Senate

Committee on Commerce, Science & Transportation

Thursday, October 25, 2007

by

Charles Kernaghan

Director, National Labor Committee

 

For more information about sweatshop abuses in China:

Toys of Misery
Speedo
Thomas and Friends

Senator Dorgan, I want to thank you for holding this very important hearing investigating the illegal sweatshop conditions under which our children's toys are made.  In 2006, the American people spent $22.3 billion purchasing over three billion toys and sporting goods.  Last year, China accounted for over 86 percent of all toy imports to the U.S., and to date in 2007, China's toy imports have surged another 16 percent.  The timing of your hearings could not have been more appropriate, as the last three months of the year typically account for almost 80 percent of all toy sales.  Last year, holiday sales in the U.S. reached a total of $457.4 billion.  This year, each consumer is expected to spend $791 on holiday purchases, including toys and sporting goods.

Many parents in America would be shocked and disturbed if they knew of the abusive sweatshop conditions under which their children's toys are being made in China.  Parents, however, have no way of knowing, as Mattel—the largest in the world—hides its 40 or so contract plants in China just as the other toy companies do, refusing to provide the American people with even the names and addresses of their plants.

Mattel's Barbie toys, along with Thomas & Friends toys for the RC2 Corporation and Wal-Mart are made at the large Xin Yi factory in Shenzhen.  The 5,000 workers there are stripped of their rights, forced to sign mostly-blank temporary contracts lasting anywhere from just 10 days to a maximum of three months.  At management's discretion, "new" temporary contracts can be renewed every two to three months.  Workers can be employed full time for a year or more, but always remain temporary workers with no legal rights.  Temporary workers can easily be fired for being "inattentive" at work, or for "speaking during working hours." Temporary workers have no right to participate in the mandatory national Social Security program which provides health care, no right to paid holidays, vacation, sick days, maternity leave, or severance pay.

The routine shift is 14 ½ hours a day, from 7:30 a.m. to 10:00 p.m., six days a week.  Workers are typically at the factory 87 hours a week, while toiling 70 hours, including 30 hours of forced overtime, which exceeds China's legal limit by 260 percent!

In 2006, it was even worse, as the young toy workers were routinely kept at the factory 15 hours a day, from 7:30 a.m. to 10:30 p.m., seven days a week, going for months without a single day off.  The workers were typically at the factory 105 hours a week, while forced to work 50 overtime hours a week, which exceeds China's legal limit by 530 percent!

The factory is excessively hot and everyone is drenched in their own sweat.  Workers are prohibited from standing up during working hours, and cannot leave their hard wooden benches, which do not have back rests.  The workers say that after several hours, their legs become numb.  It is routine for the supervisors to yell and curse at the workers and every day, the workers say, you can see young women crying.  Workers have but two choices:  to bow their heads and remain silent despite the humiliation, or speak up and be immediately fired without receiving their back wages.  Independent unions are, of course, prohibited in China, leaving the workers with no voice.  Workers who fall behind in their assigned production goal are docked five hour's wages.

The base wage in Shenzhen is just 53 cents an hour, $4.27 a day, and $21.34 a week.  Despite being forced to work a 70-hour week, workers report being routinely cheated of nearly 20 percent ($8.31) in overtime wages legally due them each week.  This is the equivalent of being cheated out of two day's wages each week.  For working 70 hours, the workers earn just $39.79 while they should have been paid $48.60.  In 2006, this too was even worse, since the Xin Yi factory illegally paid no overtime premium at all, robbing the workers of 40 percent of the wages legally due them!

Workers are housed in primitive dorms, 12 people crowded into each room, sleeping on double-level metal bunk beds and fed company food the workers describe as "awful." Every morning workers have to cue up to wait their turn to brush their teeth and use the toilet.  After deductions for room and board, the workers' take-home pay drops to just 46 cents an hour.

It does not have to be this way!  As an example, Mattel's "Barbie Hug 'N Heal Pet Doctor" set costs just $9.00 to make in China, yet—even on sale—it retails for $29.99 in the U.S.  This means that the price of the Mattel toy is being marked up an astonishing $20.99—or 233 percent. 

There is clearly sufficient money here both to make toys safe and to treat the toy workers as human beings, respecting their most basic legal rights.

Mattel spent nearly $2 billion in advertising over the last three years, which amounts to 11 ½ percent of its revenues.  This means that Mattel spends $3.45 to advertise the Barbie Pet Doctor toy—more than 18 times the 19 cents they pay the workers in China to make it!

There is absolutely no need for toxic and hazardous toys, as one industry estimate puts the price of thoroughly screening toys at just 10 cents per toy.  Further, with a 233 percent ($20.99) mark-up on each toy, it is clear that Mattel could afford to assure respect for worker rights in China and pay the workers a fair wage so they could climb out of misery and at least into poverty.  After all, Mattel's CEO paid himself $7.3 million last year, 6,533 times more than he paid his toy workers in China.

It is important to note that while Mattel's Barbie brand is fiercely protected by all sorts of enforceable laws backed up by sanctions—(Mattel sues an average of once a month to protect Barbie and its other toys)—there are no similar laws to prevent toxic toys from reaching our children, and certainly no laws to protect the fundamental human and worker rights of the young toy worker who makes Barbie.  To legally protect the rights of the human being—according to Mattel and the other corporations—would be "an impediment to free trade." So Barbie is fiercely protected, but not the human being who made Barbie.

Like many Americans, I was embarrassed and angered when Mattel's vice president apologized to a Chinese government official for the massive toxic toy recalls.  Mattel apologized after the official pointed out that Mattel makes a large proportion of its profits from its Chinese manufacturers and that Mattel ought to appreciate China's "cooperation."

This is the sort of cooperation they meant:  As late as 2005, Mattel sought and won special "waivers" so they could pay their workers less than the already-below-subsistence legal minimum wage.  And to this day, Mattel has additional special "waivers" allowing its toy workers to toil 72 hours a week—including 32 hours of forced overtime—which just happens to exceed China's legal limit by 295 percent!

Corporations say there is no need for laws to protect our children against toxic or sweatshop toys, as they can regulate themselves through voluntary codes of conduct and private monitoring schemes.  However, this summer's massive recall of toxic and hazardous toys—made under abusive sweatshop conditions in China—clearly demonstrates that corporate self-regulation is not enough.  Toxic and sweatshop toys are two sides of the same coin, and need to be regulated by enforceable laws.

The Guangzhou Vanguard Water Sports Products factory in China manufactures swimming gear and sporting goods for Speedo, their major client, as well as Toys R Us, the giant French retailer Carrefour, which is second only to Wal-Mart—and others.

Speedo may be the best-known and top-selling swimwear brand in the world, and an official sponsor of the upcoming 2008 Olympic Games in China, but the 400 workers producing Speedo goods at the Guangzhou Vanguard factory are drowning in abuse.

One worker told us, "What lies in front of us is a blanket of darkness.  We have no hope." Another worker shed tears as he described being forced to work a grueling all-night 23-hour shift on a dangerous compression molding machine, explaining how exhausted he was, and terrified that his hands would be crushed by the relentless motion of the machine if he slowed down even for a second.

The routine shift at the Guangzhou factory is 14 ½ hours a day, from 8:30 a.m. to 11:00 p.m., seven days a week.  There are also frequent 15 ½ hour shifts to midnight and 17 ½ hour shifts to 2:00 a.m., which is common with Speedo production.  There are even grueling 24-hour, all-night shifts.  Workers report toiling for months at a time without receiving a single day off.  Workers are routinely at the factory over 100 hours a week, including at least 44 hours of mandatory overtime each week, exceeding China's legal limit on overtime by 430 percent!

Workers are also routinely cheated out of 40 percent of the wages legally due them.  The minimum wage in Guangzhou is just 60 cents an hour, $4.77 a day and $23.87 a week.  All weekday overtime must be paid at a 50 percent premium, or 90 cents an hour, while weekend overtime must be compensated at a 100 percent premium, at $1.19.  Factory management refuses to pay any overtime premium at all.  So instead of earning $70.43 a week, the Guangzhou factory pays just $41.32 for 84 hours of work, meaning that the workers are being cheated of $29.11 in wages legally due them each week.  This is an enormous loss for these poor workers, whose regular weekly pay is just $23.87.  The workers are earning on average just 49 cents an hour—including all the grueling overtime hours—while the legal minimum wage is 60 cents an hour.

Despite the fact that the workers are illegally not paid any overtime premium, if they fail to show up for even a single overtime shift, nearly two weeks' wages will be deducted from their pay as punishment.

Supervisors constantly abuse and harass the workers, calling them "idiots" and "garbage" and screaming at them to work faster.  Talking back to management is strictly prohibited.  One worker who tried to defend himself by answering back to a supervisor was attacked, choked, beaten and fired. 

The pace of production is also grueling.  For example, someone working on a compression molding machine—which forms the swim masks—must complete one operation every nine to 12 seconds, 310 to 410 per hour, and 3,720 to 4,920 operations in the standard 12-hour shift.  Production line workers are allowed just 1 ½ minutes to assemble each Speedo "Condor" swim mask, for which they are paid less than two cents.

Workers are so exhausted by the long hours and grueling production goals seven days a week that they often return to their dorms after work only to collapse into bed, falling asleep with their clothes and shoes still on—despite the fact that the dorm rooms are stiflingly hot.  Workers are drenched in their own sweat all day, both on the shop floor and in their dorms.

Workers report handling potentially dangerous chemicals, oil paint, thinners and solvents including benzene.  Yet they do not know the names of the chemicals, let alone their health hazards or how to respond in case of an emergency.  In the silk screening department, workers say they are handling a solvent which, if even one drop touches their body, their skin begins to burn and fester.

In another direct violation of China's laws, management has refused to inscribe its workers in the mandatory national Social Security program, leaving the workers without health insurance, including for work injuries.  There is no paid maternity leave, no paid holidays and no paid sick days.

Eight workers are crowded into each primitive 14-by-19-foot dorm room, sleeping on double-level metal bunk beds that line the walls.  There is no other furniture, not even a chair.  The rooms reek of perspiration due to the stifling heat, leading the workers to refer to their dorm room, sarcastically, as a "sauna."  The shared bathrooms are filthy, and due to a shortage of hot water, workers wishing to wash must heat their own water on a makeshift wood stove they set up using an old oil drum.  Workers carry small plastic buckets of hot water back to their rooms where they take a sponge bath.  The workers can afford to spend just $1.52 a day on food.

The Guangzhou Speedo workers are in a trap, with no voice, no rights, and no exit.

It is unlikely that any Olympic athlete—no matter how committed—could endure what China's sweatshop workers suffer day in and day out.

Speedo and the others must clean up this factory and guarantee that the workers' legal human and worker rights will finally be respected.

Thomas & Friends Goes to China, Stumbles and is Recalled:  At the Hansheng Wood Product factory in Dongguan, where over a million Thomas & Friends toy trains were recalled due to excessive levels of lead paint—the workers were cheated right up to the end.  All 1,500 workers have been laid off, receiving less than half of the legal severance due them.  The factory shut down on October 19.  It is unclear whether any of Hansheng's workers who handled the lead paint have been provided with medical examinations—as required by law—to see if they are suffering any affects of lead poisoning.

While Thomas & Friends toys were being produced in the factory, the workers were routinely required to toil 14 ½ to 15 and sometimes 16-hour shifts, from 8:00 a.m. to 10:30 or 11:00 p.m., or even midnight, six or seven days a week.  During peak periods, workers report being forced to work for months on end without a single day off.  Workers were at the factory 87 to 102 hours a week, while working a minimum of 69 hours to over 80 hours a week, including 29 to 41 hours of mandatory overtime, which exceeds China's legal limit (of no more than 36 hours of overtime in a month) by 250 to 389 percent.  The base wage was just 53 cents an hour, $21.06 a week.  While forced to work excessive amounts of overtime, the workers were routinely shortchanged of $38.35—16 percent—of the overtime wages legally due them each month.

Workers were docked 2 ½ hours wages for talking during working hours or for arriving just four minutes late.

In another blatant violation of China's law, Hansheng's workers were also not inscribed in the mandatory national Social Security program, stripping them of their right to work injury and health insurance.

Twelve workers are housed in each primitive dorm room.

Thomas & Friends workers at the Han Sheng factory had no voice and no rights.

At the Li Cheng Industrial Complex in Dongguan, which houses RC2's corporate headquarters in China along with their factories, Peng Hui, Yong Yi and Ri Sheng, which produce toys for Thomas & Friends, Disney, Nascar and others under a licensing agreement with RC2, conditions are no better. 

At the Yong Yi factory, RC2 workers are forced to toil an all-night 21-to-23-hour shift every Saturday, from 8:00 a.m. to 5:00 or 7:00 a.m. the following morning.  This is the only way the workers are allowed Sunday off.  It is not uncommon for the toy workers to be at the factory 98 hours a week and toiling 46 hours of overtime.

At the Ri Sheng factory, RC2 workers are systematically cheated of their legal overtime wages, as management pays just 52 cents an hour, and not the 80 cents to $1.06 per hour they are owed.  Workers are shortchanged $11.11 a week, 42 percent of the overtime wages legally due them.

The Peng Hui factory—the largest in the zone—hires all temps all of the time.  The mostly-young-women workers are allowed just three-month temporary contracts, which management, at its discretion, can renew—but always as "new" contracts.  Workers can be at the factory full time for a year or more, but always remain as temporary workers with no legal rights.  This illegal scam reduces Thomas & Friends toy workers to a contingency workforce with no rights.

In May 2007, the young women were forced to work a seven-day, 84 hour workweek.

Anyone arriving 30 minutes late will be docked half a day's wages, while anyone missing a day will lose two days' wages.  Workers can be fired for having a "bad attitude."

Everyone is drenched in their own sweat, since the factory is unbearably hot.

When Thomas & Friends toys made in China reach the U.S., they are marked up 234 percent above the cost of production, with a Thomas the Tank Engine play tent which cost just $10.32 to make retailing for $34.50 in the U.S.

The RC2 Corporation also hides its contractors' plants in China, refusing to provide the American people with even with the names and addresses of the factories they use to make the toys they urge us to buy.

Unfortunately, toxic and sweatshop toys will be with us for a long time to come, unless enforceable laws are enacted to both protect children from hazardous toys and also finally guarantee respect for the rights of the human beings who make the toys.