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February, 25 2009 |  Download PDF |  Share

Women Exploiting Women

Women in the U.S. are purchasing clothing sewn by women who are exploited in Guatemala.
The Nicotex sweatshop produces clothing for Briggs New York and Lane Bryant.
The U.S. Free Trade Agreement with Central America continues to fail,
undermined by corruption and a total lack of enforcement of labor laws.

En Español

Update, March 14, 2009:  Auditors speak with Nicotex workers

Company responses

 

 

This research and preparation of this report was a joint effort between the National Labor Committee and CEADEL, the Center for Studies and Support for Local Development based in Chimaltenango, Guatemala.  CEADEL is dedicated to promoting human rights and especially the rights of women and children.  In the last several years, the NLC and CEADEL have collaborated successfully on a number of cases that have contributed to progress toward the eradication of child labor in the agro-export industry and diminishing human and worker rights violations in the "maquila" garment export sector.

Nicotex factory
27 Avenida 9-83
Zona 4 de Mixco
Finca el Naranjo
Mixco, Guatemala

Tel:    (502) 243-43688;  -43276
Fax:  (502) 243-44048
Email:  nicotex@itelgua.com

* Legal Representative:  Lic. Patricia Jengezoon Rosa

* Ownership: Korean-owned.  (Nicotex, situated in a suburb outside Guatemala City, was founded in Novemeber 2007 when it purchased the Eternal S.A. plant—also Korean-owned—which had been in operation since September 2001.)

* There are approximately 320 workers in the factory, about 70 percent of whom are indigenous women in their mid-twenties.

* Eighty percent of total factory production is for Briggs New York, including women's blouses and skirts being sewn on five assembly lines.  Briggs New York is owned by the Kellwood Company.

* The remaining twenty percent of production is women's jackets for Lane Bryant.  Lane Bryant is the third largest women's specialty retailer in the U.S. and is owned by Charming Shoppes, Inc.

  Nicotex Factory

Illegal Sweatshop Conditions at the Nicotex Factory

"It's a pity that the Guatemalan laws are not applied to these people [factory owners] who treat us badly.  I think the laws are good, but they're useless because they don't apply them to the ones who violate the rights of the workers.  We're always the ones who suffer the most, because if you complain before the Ministry of Labor, they're always protecting the owners.  Until we have people in the ministry that support the workers or a government that supports the workers, the rights of the workers will not improve."

-- A woman worker at Nicotex

 

Forced overtime and grueling hours mean the workers' children are left alone:

The regular shift at the Nicotex plant is 8 2/3 hours, from 7:00 a.m. to 3:40 p.m., Monday through Friday, with just one 40-minute break for lunch.  On Saturdays, the regular shift is four hours, from 7:00 a.m. to 11:00 a.m.  This complies with the legal standard of a regular 44-hour work week.  However, overtime work is common, obligatory and excessive, which is a violation of Guatemalan law.  It is common for the women to be forced to work 20 to 25 hours of overtime a week.  This was the case in January 2009.  The system works like this:  No one can leave the factory until the day's production goal— arbitrarily set by management and which workers say is excessively high—is completed.

Especially on the days before the Briggs New York and Lane Bryant garments are to be shipped to the U.S.—the shipments leave twice a week, on Thursdays and Sundays—the women have no choice but to remain working until the total order is complete.  On these days the women sewing operators are routinely kept for six hours of overtime, toiling a grueling 14 2/3-hour shift from 7:00 a.m. to 9:40 p.m. and sometimes even later.

It is even worse in the inspection and packing departments where the workers are often forced to toil 22 to 24 hours straight before shipping dates—from 7:00 a.m. to 5:00 or 7:00 a.m. the next morning.

What makes it even more difficult for the women, many of whom have young children, is that they never know when they will be let out of the factory.  The workers are never notified of overtime in advance.  Rather, management decides, often just 30 minutes before the shift's end, instructing the workers that they must stay for another 2 ¼ hours of overtime to 6:00 p.m., or six hours to 9:40 p.m.  This creates havoc with the workers' families, since it is impossible to make plans, especially for child care and to see that their children are fed, do their homework and are put to bed.

In January 2009, the women were at the factory 67 to 72 hours a week, while toiling 64 to 69 hours, including 20 to 25 hours of mandatory overtime.  It is not uncommon for the workers to be at the factory 12 hours a day, toiling 11 ½ hours, six days a week.

As part of a charade to cover up the excessive and illegal obligatory overtime, management forces the women to sign forms stating that they are "volunteering" to work overtime.  Those who beg to be excused from overtime due to family need are either threatened with firing or told that if they leave the factory they will be prohibited from working overtime for the next month.  As no one can possibly survive on the legal minimum wage, being barred from working overtime means their families will have to cut back on basic foods and other necessities.  As it is, even with the grueling overtime, the workers and their families live from day to day and from hand-to-mouth, borrowing money to survive.

The red-black pattern top (top) has been under production for the last two to three months on Nicotex's number five production line. The red top on the bottom was being produced at Nicotex until January 2009.

Workers speak out on long hours, constant pressure, humiliation and threats:

The women workers cannot be identified due to the certainty that they would be fired and blacklisted by management for daring to speak truthfully about the illegal factory conditions.

  • "What bothers us the most is the constant pressure and all the shouting to work faster.  They say overtime is not obligatory, but if we don't work one day of overtime, the Korean [owner] takes away all the overtime for the month saying:  'You don't need to work overtime.'  Also, it bothers us that we never know when we are going to get out of work in the afternoon or in the evening.  We can never make plans for a Saturday because the supervisor could all of a sudden tell us that our [production] goals have not been reached, and he forces us to work all day.  The overtime pay helps us live, but we deserve a little respect." --Worker #1
  • "These goals are impossible to finish in the shift.  The goals are never completed, which is why we have to work until 9:40 p.m.  The goals are unfair, because there are only 34 people on the line, it isn't enough.  [Note:  Thirty-four workers on an assembly line must complete 1,600 Briggs New York blouses during the regular eight-hour shift.  The workers are allowed just ten minutes to complete each blouse, for which they are paid 19 ½ cents.]  We are threatened.  They have us frightened.  They pressure us to produce, but they don't care about us" They don't pay us on time, they don't pay our bonuses on time. [By law, management must pay the workers' two bonuses, one in July and the other at Christmas, each equal to one month's minimum wage.]  They still haven't paid the other half of our Christmas bonus.

"Sometimes you don't even have time to go to the bathroom, they pressure us so much.  We're always in a rush" Supervisors tell us not to go to the bathroom.  'You don't have to go to the bathroom, because you waste time.  It is better to be working.'  And the bathrooms are now only open from 9:00 a.m. to 11:00 a.m. and in the afternoon from 2:00 p.m. to 5:00 p.m."

         --Worker #2

  • "The supervisors are Guatemalan, the chief of the plant is from the Dominican Republic and the Koreans are the owners.  There are two Koreans, a man and a woman.  The supervisor on Line 5 behaves badly with us.  Lately he's been saying that he will treat us the way the Koreans treat him.  He always shouts:  'Make this quickly—what's the matter with you!'  Then he tells us we have to stay for overtime, sometimes to 9:40 p.m."

         --Worker #3

  • "I work on Line 3 and sometimes I can't stay [for overtime] because I have to be with my children, and I tell the supervisor 'Today I can't stay,' and he refuses:  'If you don't want to work, there is the door.  It's open.  You came to work by yourself, and now you can leave by yourself [i.e. quit].  You came here because you needed work, and if you don't have any need of working more, get out right now.'"

"They're always threatening, so we stay working overtime.  They shout and say things in a way that makes you feel frightened.  So you stay.  The supervisors tell us we are good for nothing."

         --Worker #4

  • "The Koreans shout too much at the workers.  The Korean woman is always very angry.  She shouts at me and many others.  If we can't work overtime, even one time, she won't give you any more overtime.  She sends you home at 3:40 p.m., and she changes you from line to line and harasses you with the work.  'Go to your home,' she says, 'Go to your home.'"

         --Worker #5

  • "Bauterio, the Dominican [plant manager], he hits and pounds your workbench.  He's always punching the tables [sewing machine platforms] shouting 'Hurry up.  Hurry up you old women.'

"Even if you are sick, you have to stay for overtime.  They force you to stay.  If the Korean finds out, she immediately sends you to the office to sign a warning.  At the third warning, you're lost, they fire you without a penny."

         --Worker #6

  • "Everybody in the factory has a plastic bottle to drink water.  We take the water from the tap.  There's a room where you wash your hands and where you also take water to drink.  Twice a week, Nicotex sends containers to export, on Wednesday and Saturday.  [Those are the days the workers are forced to work long overtime hours in preparation for the containers to leave the following day.]  Those days they only let us fill up our bottles in the morning, early, and then they lock the room during lunch time, and they don't let us go out of the factory during lunch time to buy something to drink."  [The less the workers drink, the less they will have to use the bathroom.]

         --Worker #7

 

Scraping by on meager wages, Nicotex workers can only afford to live in crude shacks 

Below-subsistence Wages even further Undermined
Workers Shortchanged of their bonuses, cheated of their healthcare,
Maternity leave and severance pay


"The Korean or Chinese factory owners look for poor countries and because we have needs, we tolerate everything in order to earn a wage and benefits—although they make a great injustice with us because they treat us in a wrong way."

--Worker #8

The minimum wage in Guatemala is 76 cents an hour, $6.10 for an eight-hour shift and $33.55 for a 44-hour work week.  However, in Central America there is a tradition known as "Seventh Day's" pay, which functions like an attendance bonus.  If a worker does not miss a day or arrive late, she will be paid the base wage for all seven days of the week.  This brings the wages up to 97 cents an hour, $7.76 a day and $42.70 for the week.

These wages do not come even close to meeting the most basic subsistence-level needs of the worker, let alone his or her family.  As the workers fell deeper into misery a few years ago, the Guatemalan Government passed a law requiring that the workers also be paid a monthly bonus of 250 quetzals, or $31.94, which comes to $7.98 a week. [7.8278 quetzals = $1.00 U.S.]  This brings the workers' wages up to $1.15 an hour, $9.22 a day and $50.68 for the week.

As their wages still fall far short of meeting basic subsistence-level needs, two additional bonuses have been decreed—the Christmas or "13th Month" bonus and the "14th Month" bonus, to be paid in July.  In both months, the workers must be paid a bonus of $183, which is equal to one month's base wage plus the Seventh Day attendance bonus.

As we will demonstrate in the following section of this report, this series of bonuses has not been sufficient to lift the workers out of extreme poverty.  The workers can survive—poorly—only by working excessive amounts of overtime.  Moreover, the workers report being shortchanged on their Christmas and July bonuses.

   

Workers smuggled these two wage stubs from the Nicotex factory   

Guatemalan Women Sewing Clothing for Women in the U.S.
Remain trapped in desperate poverty,
Despite working 64 to 69 hours a week!

What happened to the U.S.-Central America Free Trade Agreement,
Which was supposed to lift wages while improving respect for human and worker rights?

"The truth is that the wage is not enough.  We have to juggle the bills to pay.  We can't eat well because everything is very expensive and you can't buy as before.  Now one eats less as the money is not enough"  There are some foods only for rich people that we can't buy because they are expensive.  We only eat beans, eggs, sausage, cheese.  But meat, chicken and fish—we can't buy it" When they pay us, I already have debts.  I have a list of what I have to pay, and even though one wants to reduce expenses or wants to save, it's not possible because living is very expensive.  All the prices increase, and if they increase the wages, prices increase, so we are always stuck in the same place.

My economic level has not increased in all these years.  All I can do is try to stand still and not have too many debts."

--Worker #9--a woman at the Nicotex factory, who has been sewing garments for export to the U.S. for the last six years.

"The minimum wage did not provide a decent standard of living for a worker and family" Labor representatives noted that even where both parents worked, the minimum wage did not allow the family to meet its basic needs."

--U.S. State Department
Guatemala/Country Report on Human Rights Practices, March 11, 2008

Workers smuggled this Briggs New York label from Nicotex

Wages fall short of even a poverty-level existance

A woman seamstress at the Nicotex factory walked us through her most minimal expenses.  Her husband is also a garment worker and they have one child who is nine years old.  The woman begged us not to use her name or show any pictures of the room they live in—knowing she would be immediately fired by management for daring to speak truthfully about factory conditions, including the abuses and low wages.  The family lives in a single small room, which they rent.

She told us she could never dream of purchasing a small one or two-room house.  Even with the few possessions they have—a table-top gas burner, a small table, a TV, a radio, two beds, some pans and a small cabinet—their room is overcrowded.

This woman frequently works a 14 2/3-hour shift, from 7:00 a.m. to 9:40 p.m., and is at the factory up to 72 hours a week.  She is no slacker—and this is how she and her family live:

Minimal Household Expenses:
Housing Monthly  Weekly 
- Rent (for a small, single-room apartment for 3 people)  $63.87  $14.74
 
- Water  $1.28  $0.30 
- Electricity  $3.19 $0.74 
- Cooking gas  $13.87  $3.20 
- Garbage collection  $1.28  $0.30  
  Subtotal:   $19.28
Food     
- Food (going without meat, chicken or fish—the minimum cost)   $89.42 $20.64
 
- Tortillas (purchased daily from a neighborhood stand)  $15.16  $0.50
 
- Lunch at the factory   $38.40  $9.60 
(Since they are often required to work more than 14 hours a day, six days a week, she has no time to prepare lunch to take to the factory.  This estimated cost is the minimum expense, since the workers are frequently kept working all day on Saturday as well, which would increase the monthly cost.)    
  Subtotal:  $30.74 
     
Transportation to work:  $9.96  $2.30 
(The factory pays half the cost of the bus.)     
     
Child Care   $102.20  $23.50 
(As both parents work long hours six days a week, often arriving home at 10:00 or 11:00 p.m., their nine-year-old son requires child care.  The cost includes a small afternoon snack and supper.)     
     
Public School  $8.00  $1.54 
(Their 9-year-old child attends public school, which is within walking distance of their apartment.  In Guatemala's public schools, parents must purchase notebooks, pencils and photocopies, and must pay for activities.  The cost is between $8.00 and $10.00 a month.  We have used the lower figure.)     
     
Other school related purchases     $2.85
(There are significant one-time expenses for parents with children in public school.  At the beginning of the year, parents must purchase textbooks and notebooks, which cost about $30;  two school uniforms, which are $20 each, or $40 total; $18 for a gym outfit;  $20 for sneakers and another $40 for two pairs of shoes each year.  At a minimum, these expenses total $148, which comes of $2.85 a week.)     
  Minimum Weekly Expenses   $80.21

 

The minimum $80.21 necessary to cover the most basic household expenses does not include health care, phone, weekend transport to shop, clothing, emergencies, household furniture and repairs—let along even the simplest entertainment or a tiny savings account.

If her son falls sick, it will cost the mother $45 or $50 for a doctor visit, medicine and return visit.  (The workers at the Nicotex factory are cheated of their state health care, which they pay for, but even if they did have coverage through the state Social Security system, children over six years of age are not covered under their parents' policies.)  Even spending as little as they can on clothing and stretching out purchases to last at least a year, the mother must spend $60 a year on clothing, while men's clothes are more expensive at $100.

The legal minimum wage is 76 cents an hour and $33.55 a week, which includes the Seventh Day's attendance stipend.  Government decreed bonuses can bring wages up to $1.15 an hour and $50.68 a week.  Garment wages in Guatemala do not come close to meeting basic subsistence-level needs.

Workers paid 19 ½ cents to sew a Briggs New York Woman's Blouse

Briggs New York women's blouses are sewn on assembly lines #2 and #4.  They are short-sleeved blouses, 94 percent polyester and six percent spandex.  The 34 sewing machine operators on each line have a mandatory goal of completing 1,600 blouses in the regular eight-hour shift, from 7:00 a.m. to 3:40 p.m., with a single 40-minute break for lunch.  The women say the goal is excessively high and almost impossible to reach.  The line must complete 200 blouses an hour, which amounts to 5.88 blouses for each worker.  The total time allowed to sew the blouse is just 10.2 minutes.  This means that a woman earning $1.15 per hour, which includes all bonuses, is being paid just 19 ½ cents for each Briggs New York blouse she sews.  This is hardly a lot of money.  Imagine what would happen if the U.S. apparel companies were to double the women's wages to 39 cents per blouse—which would allow them to climb out of misery and live with their families with a modicum of decency.  Would the whole apparel industry collapse?

 

 

Workers smuggled this Briggs New York label from Nicotex

Briggs' long spandex skirts are sewn on production lines #1 and #5.  These skirts have a retail price of $40.

(A recent visit to a J.C. Penney's store in New England revealed that the vast majority, if not all, of the Briggs New York clothing was sewn in Guatemala, certainly a good proportion of it in the Nicotex factory.)

A light jacket for the Lane Bryant label is sewn on assembly line #3.  There are 40 workers on this line and they have 24 minutes to sew each jacket.  Here too, the women report that the goal is excessively high and impossible to meet.  What makes things worse is that each worker is required to complete two or three separate operations as the jacket moves down the line.  Some of these Lane Bryant jackets, which have rounded collars and no buttons or zippers, retail for $90.

The workers are paid just 46 cents to sew the $90 Lane Bryant jacket, which means that their wages—the direct cost to sew the jacket—amount to just one half of one percent of the $90 retail price.

  This Lane Bryant label was smuggled from the factory 

Cheated on Health Care and Maternity Leave

The law is very clear and straightforward.  All employers—including the Nicotex factory—must inscribe their workers in the Guatemalan Institute of Social Security (IGSS), which covers health care and pension benefits.  The state health insurance program covers all medical expenses, including hospitalization, doctor visits and drugs as well as paid maternity leave.  Belonging to the Guatemalan Social Security System is mandatory.  Automatic deductions amounting to 4.83 percent of the regular and overtime wages earned each month are taken from the workers' wages.  Management is required to pay 10.67 percent of the workers' wages to the state Social Security Institute.  For example, if a worker earned $50.68 a week, $2.45 would be deducted from her wages for Social Security, while management's contribution would be $5.41.  When management and workers are up to date on their contributions, the workers receive a "Certificate of Social Security" card.  This card guarantees health care and medical attention at any Social Security hospital or clinic in Guatemala.  The card also provides free health care for workers' children under the age of six and, of course, covers paid maternity leave.

But at the Nicotex factory, it does not work this way.  In fact, Nicotex is just a part of a larger corrupt scam which is undermining the state's Social Security Institute and leaving workers and their children robbed of health care and maternity benefits.

The scam works like this:  Instead of inscribing all their workers in the mandatory Social Security system as is demanded by law, Nicotex and other factories inscribe just 20 percent or so of their workers, allowing them not only to avoid paying their 10.67 percent deduction on regular and overtime wages due Social Security for 80 percent of the workers but also to pocket the 4.83 percent deduction they have taken from those workers' wages.

The impact on the workers and their families is devastating.  Of course, corruption on this scale would be impossible without the complicity of at least some Social Security officials.  This scam is an open secret across Guatemala.  It is also very disturbing that the labor rights provisions in the U.S.-Central America Free Trade Agreement (CAFTA) have had zero impact in reversing this corruption and the impact it is having on the workers' lives.

For its part, the Social Security Institute (IGSS) operates in secrecy, refusing to publicly release the list of factories and the numbers of workers inscribed in each plant.  Making such a list public would be inconvenient.

The factory owners are also tricky.  They do not necessarily inscribe the same 20 percent of their workers each month, but rather rotate the insurance coverage so different groups of workers have health care for short periods of time.

Lacking access to the Social Security hospitals and clinics—for which they are paying—the workers and their children have no choice but to turn to state hospitals for the poor as a last resort.  Needless to say, these hospitals are severely overcrowded, the waits long, infrastructure and equipment in poor condition and medical treatment, of necessity, is brief.  There are just too many people to attend to.

This is one of those Wal-Mart-like set-ups, where the U.S. apparel companies and their contractor factories in Guatemala not only cheat their workers, but then pass on the expense for medical care so that the Guatemalan government has to pay for it.

"Women having babies can't go to the IGSS hospital because they're not accepted since Nicotex hasn't paid the quotas.  So the women have to go to public hospitals and beg to be attended.  And IGSS doesn't pay their maternity leave.  The Koreans give some money to the women when they have their babies to avoid a scandal."

 - Worker #10

"I have problems with my kidney.  I've been waiting eight months for the certificate and the explanation the Korean gives me is 'We are delayed with the quotas [payments].  Go to rest.  You need to rest."

 - Worker #11

"In my case, I've been asking for my certificate for a month, and they don't give it to me.  Last Monday I spoke with the Korean woman, and she told me they were delayed with the IGSS quotas and that she couldn't give me the certificate.  I told her I was up to date with my quotas because I see the deduction every two weeks.  In retaliation, what she is doing now is not allowing me to work overtime.  She takes me out of the factory at 3:40 p.m. and doesn't allow me to work overtime."

 - Worker #12

"I had a pain in my knee.  I asked for my certificate at the office and they took my ID card.  After a while, the Korean woman called me and said, 'This takes time.  We have to do a lot of administrative procedures, but I don't know where, so here's your ID back." [She never did receive her payment.]

 - Worker #13

"When we go and ask for the certificate, they tell us to ask for it 15 days in advance, but the sickness doesn't let you know 15 days before"."

- Worker #14


Factory Clinic:

There is a "medical clinic" in the Nicotex factory or at least a sign on a door.  The only problem is that the room is empty and has never functioned as a clinic.  The workers remark that "there is not even a first aid kit."

Scraping by on meager wages, Nicotex workers can only afford to live in crude shacks   

Cheated of their paid vacations:

Guatemalan labor law is again very clear:  After one year's employment, every worker is guaranteed 15 days paid vacation.

Here too, the Nicotex workers are routinely cheated.  No worker at Nicotex has had a single day's paid vacation since the factory opened in November of 2007.  Moreover, for six years, before the plant changed names from Eternal S.A. to Nicotex, the workers did not have a single day of paid vacation, let alone 15 days a year.  However, in early 2007 the workers did receive five unpaid "vacation" days, because the factory had no work.

The workers say that when they ask for their legal vacation time, the supervisors typically respond:  "Forget it.  Nicotex never rests.  If you feel tired, then resign and go to your home.  There you can sleep.  The gates are wide and open.  If you go, we will replace you in five minutes."

The 15 annual paid vacation days would cost the company just $91.50 per worker.  The vacation pay is calculated at the base wage of just $6.10 a day times 15 days.  It may not seem like a lot of money to many people in the U.S., but for the women garment workers at Nicotex, not receiving it is a huge loss.  Collectively, management cheats the 320 workers of $30,000 a year in wages due them.

Cheated of Severance Pay:

When factory workers resign or are laid off, Guatemalan labor law guarantees them one month of severance pay for each year they have worked.  When the Nicotex owners purchased the Eternal S.A. factory in 2007, many of the former Eternal workers, who had worked at the factory for six years, signed a contract with the new Nicotex factory which guaranteed that their right to severance pay earned during their time at Eternal would be respected.  On paper, the agreement looks good.  But in fact, Nicotex management does not respect any severance payments at all.

Especially given the worldwide economic meltdown—and that Guatemala's garment factories are exporting to a U.S. apparel industry that is collapsing—the workers are terrified that if they are terminated and removed from the factory, they will not receive a single cent of the severance legally due them.  This will leave the workers in desperate straits.  The severance pay—one month's pay for every year worked—functions as a sort of unemployment compensation, extending a lifeline to the workers and their families for six or so months as they scramble to find new work.  When the Nicotex factory refuses to pay the severance, it casts the workers into misery.

Shortchanged of their bonuses:

Given that the legal minimum wage in Guatemala does not come even remotely close to meeting the most basic subsistence level needs, the Guatemalan government has instituted a policy providing the workers with two months of bonus pay, the Christmas or "13th Month" bonus and the "14th Month" bonus in July.  The two bonuses are each paid at $183.  The Christmas bonus is particularly important to the women workers and by law 50 percent of the $183 bonus must be paid in December, with the second half paid in January.  The school year in Guatemala runs from February to November and it is at the beginning of the semester that parents must purchase school uniforms, books, notebooks and shoes for their children.  Since the families are living hand-to-mouth with no savings, it is the Christmas bonus which provides the money to purchase the school goods.  This is why the Christmas bonus is so critical.

But Nicotex management makes its own laws.  Nicotex paid no bonus in December and on January 15 paid just half of the bonus the workers were due.

It was the same with the July bonus, which was supposed to be paid in two installments on July 1 and July 15.  At Nicotex, the workers did not receive their full bonus until October.

One woman worker asked a supervisor, "When are we going to get the other 50 percent of the Christmas bonus?  I need it for the children's school expenses."  "Shut up," the supervisor responded, "That is a prohibited subject here."  This led the woman to observe, "They're always telling us lies and lies.  Why can't Nicotex pay on time if we do our work on time, every day, even when we have to stay to 9:40 p.m. at night?"

 

Scraping by on meager wages, Nicotex workers can only afford to live in crude shacks  

Corporate Audits of the Nicotex Factory are Laughable:

In general, according to the workers, auditors come to the factory twice a year.  The last time the auditors where there was in December 2008, when both North Americans and Koreans showed up.

In preparation for their visit, the factory was thoroughly cleaned, and soap, toilet paper and towels suddenly appeared in the bathroom.  Management chooses the workers who will speak with corporate auditors, and for this they pick the newest, youngest and most timid workers who do not know much about the factory and who are most frightened about being fired.  This guarantees a pleasant but shallow interview.  It speaks volumes about the auditing process at Nicotex that none of the workers have even heard of any "Corporate Code of Conduct."  We can say these audits are shallow to the extreme.

Unions not Wanted:

The U.S. State Department country report on Guatemala is pretty straight forward regarding the lack of labor rights protections:

"While the law provides for freedom of association and the right to form and join trade unions, in practice, enforcement remained weak and ineffective""  Moreover, "an ineffective legal system and inadequate penalties for violations continued to undermine enforcement of the right to form unions and participate in trade union activities."

The lack of labor rights is so complete that the U.S. State Department can nonchalantly comment, "of the 188 companies operating in the EPZs [Export Processing Zones], only three had recognized trade unions, and none had a collective bargaining agreement."

One does not have to be a rocket scientist to understand the obvious:  Not only are Guatemalan labor laws being routinely and systematically violated with impunity, so are the International Labor Organization's core labor standards—no child labor, no forced labor, the right to organize and join trade unions and to bargain collectively, and decent working conditions.

The labor rights situation is so dismal in many Guatemalan factories—exporting duty free to the U.S.—that conditions resemble those in China.  Certainly in this respect:  Many workers in Guatemalan factories have never even heard the word "union" and have no idea what it might mean.  (In China, when asked, many workers think a "union" is a breakfast meeting.)

We should at least be honest about what is so obvious—that the labor rights provisions of the U.S.-Central America Free Trade Agreement (CAFTA) are stuck in the mud and failing miserably.  Perhaps that is the intention of the government officials overseeing the implementation of CAFTA, but it is definitely a disservice to the people of the U.S. and Guatemala, and it is illegal.

Under CAFTA, a fully-loaded wage of $1.45 an hour in Guatemala is excessive and can be ignored:

It is amazing to think that under a U.S.-Free Trade Agreement with Central America, the fully-loaded wage in Guatemala of $1.45 an hour is under attack and being undermined on a daily basis by factory owners exporting their goods duty-free to the U.S.

The fully-loaded wage in Guatemala's export processing zones is composed of the legal minimum wage, the Seventh Day attendance stipend and the government decreed monthly bonus.  This brings the monthly wage to $219.36.  Then there are the additional bonuses at Christmas and in July, which on average add $30.53 a month to the workers' wages.  The legal fifteen paid vacation days add another $7.63 a month to the workers' compensation.  Finally, there is the cost of the owner's portion of Social Security, the equivalent of 10.6 percent of the workers wages which averages out to $19.55 a month.  IGGS provides health care, maternity leave and a small pension to the workers.

If you total the above, the fully-loaded wage is just $1.45 an hour.  It is a pitifully low wage, set well below even the most minimal subsistence level needs for a worker, not to mention her family.

But the low $1.45 an hour fully-loaded wage is constantly under attack, as the case of the Nicotex factory demonstrates.  Workers are routinely shortchanged of their bonuses while also being cheated of their vacation pay, Social Security deductions and more.

It is a pitiful state of affairs when the lowly $1.45 an hour fully-loaded wage in Guatemala cannot be defended under the U.S.-Central America Free Trade Agreement.  Something is very wrong here, and U.S. officials in charge of monitoring and enforcing the U.S.-CAFTA should explain to the American people exactly what it is that they are doing.

 


 

What You Can Do 

Please write to Kellwood and Charming Shoppes, Inc., and tell them to respect workers rights in Guatemala.

Model Letters:

Briggs New York/Kellwood 

Lane Bryant/Charming Shoppes, Inc.

 


 

COMPANY CONTACT INFORMATION

The Briggs New York label is owned by Kellwood apparel company:

Michael W. Kramer, CEO
Kellwood Company
600 Kellwood Parkway
Chesterfield, MO 63017 

Phone:  314-576-3100
Fax: 314-576-3375

The Lane Bryant label/company is owned by Charming Shoppes, Inc.:

Lane Bryant Brand Headquarters
3344 Morse Crossing
Columbus, OH 43219 

Phone:  614-463-5200
Fax: 614-463-5247

Charming Shoppes, Inc. Corporate Headquarters
450 Winks Lane
Bensalem, PA 19020 

Phone:  215-245-9100
Fax:  215-604-5692