March 1, 1998 | Share
Behind the Labels: Made in China
Nightmares and Dreams
By Han Dongfang
China Labour Bulletin
Riding on various preferential policies, foreign investors have reaped harvests under China's 'celebrated' economic reforms unleashed in the early eighties. Their close partners--local government officials--have also filled their pockets with all the power they can exercise. What about the workers then? A PRECIOUS job opportunity offering 15 hours of forced work in conditions of slavery! This is no secret, and foreign investors know it well. Think about the unwritten preferential policy that foreign investors in China enjoy: they can flout every worker's rights and still comfortably stay at large.
In early March, a listener to my program, 'Labor Bulletin,' on Radio Free Asia, gave me a call and recounted what happened in a Taiwanese shoe factory in Dongguan, Guangdong Province. On March 4, a worker (from the inland province of Hunan) was suspected of having stolen something from the factory and was fired right away. But this was not the end of the story. The boss forced him to crawl out of the gate right under the eyes of the several hundred workers in the factory. The worker did go out on all fours. I asked the caller, "Why didn't he just walk out?" "He dared not," the caller said. I kept asking, "What if he refused?" The caller said, "The boss would then ask the factory security guards to beat him up."
The caller went on describing the harsh management in the factory: workers have to work from 7 am to midnight. They are not allowed to go out except after work at midnight on Tuesday, Thursday and Saturday. They can meet their friends from outside the factory at lunch and dinner breaks, but they can only chat with them through a tiny head-size opening, which management has been considerate enough to put in the iron entrance gate.
The caller is a middle-level executive in a foreign-invested factory, and came to the special economic zone in search of his dream after graduating from university. "What is your dream?" I asked him. "I shared a hope with my colleagues in the universitythat we would work in foreign enterprises after graduation. We thought that since people in these companies cam from democratic countries, they would have better ideas of management and would better respect human individuality and dignity. We had the strong hope that we could learn a lot from them," said the caller. When I asked him whether he had learned a lot, he told me with indignation, "They have shattered my dreams of democracy, freedom and human rights!"
I asked him for details. He said plainly that from what he heard and saw in the special economic zone, not one single foreign enterprise followed China's Labor Law--no pensions, no medical insurance and forcing workers to work overtime.
To round up, he asked me, "Mr. Han, you have been to a lot of places and you must have seen a lot. Can you tell me whether these goreign bosses do the same to the workers back home? I answered, "I think they would like to do the same in their own country. It's just that they dare not as there is pressure from trade unions and strict monitoring from the government in accordance with the law. Even so, they will still squeeze the workers whenever they can. In China, we don't have independent trade unions while the All-China Federation of Trade Unions is just an agent of the government and employers; our government turns a blind eye to violations of workers' rights in order to attract foreign investment--with all these 'conveniences,' foreign investors will surely squeeze every bit out of the workers here with no scruples."
As a final note, I said to the caller, "If we workers want to honour our dignity and command respect from others, we have no other way but to organize ourselves. No matter where we are, we have to earn our respect and recognition through our own strength. In other words, we shouldn't expect employers to respect workers' rights voluntarily without any external pressure."
What I have described above is but one of many incidents that happen every day in China's special economic zones. Faced with this kind of reality, I have only this to say to those foreign investors who have seen their profits rocketing:
You are simply looting a burning house when you unscrupulously violate the basic human rights of Chinese workers under the full protection of the government's repressive policies. We don't expect much from either your corporate code of conduct or self-monitoring. What we expect you to do is at least obey the labour laws in China as much as you obey the labour laws in your country. And you have to understand that we are not begging you for mercy when we request you to do this. Respecting workers' rights in China is not an act of charity. I have to tell you that you are wrong if think so.
Still ringing in my ears is the comment made by this university graduate who went to work in a foreign factory in the special economic zone:
"They have shattered my dreams of democracy, freedom and human rights!"
Han Dongfang was imprisoned for two years for attempting to organize an independent union in China. He now lives in exile in Hong Kong, where, as editor of the China Labour Bulletin, he remains an outspoken advocate for the human rights of Chinese workers. He is banned from entering mainland China.
In the first 10 months of 1997, American companies imported more than one billion garments made in China, which is more than four garments for every man, woman and child in the United States.
There are four million apparel workers in China, the vast majority young women, rural migrants who are unaware of their legal rights and have never heard of U.S. corporate codes of conduct. Workers can be fired for even discussing factory conditions, and there are no independent human rights, labor or religious organizations to provide protection. American companies have taken advantage of the vulnerability of these workers.
American companies are acting in ways that are actually lowering standards in China, slashing wages, eliminating benefits, imposing excessive forced overtime, denying legal work contracts and tolerating widespread arbitrary firings.
Conditions at factories producing garments for export to the U.S. include forced overtime, 60 to 96-hour work weeks, 10-to-15-hour shifts, six to seven days a week for wages of 13 to 28 cents an hour, without benefits. Migrant workers are housed in cramped dorms and fed a thin rice gruel.
Among the well-known labels produced under many of these conditions are: Ralph Lauren/12-to-15-hour shifts, six days a week, for 23 cents an hour; Ann Taylor/7:00 a.m. to midnight, seven days a week, for 14 cents an hour; Kathie Lee/Wal-Mart/12-hour shifts, seven days a week for 13 cents an hour; The Esprit Group/7:30 a.m. to midnight, seven days a week for 13 cents an hour; The Limited/70 hours a week for 32 cents an hour; Liz Claiborne/66 hours a week for 25 cents an hour; J.C. Penney/11-hour shifts, seven days a week for 18 cents an hour, and Kmart/70 hours a week for 28 cents an hour.
The major apparel producers in China include: Wal-Mart, Liz Claiborne, Dayton-Hudson, Kmart, May Co., Federated and The Limited.
Despite claims by American companies that they are monitoring factory conditions in China, these factories operate behind a veil of secrecy and are part of a growing subcontracting network in which several factories work on the same order. It is likely that many U.S. companies are not even aware of where their garments are being produced, let alone what human rights conditions are.
The American people are left completely in the dark, with no way of knowing which companies produce what in China, in which factories, under what conditions and wages. Without corporate disclosure, guaranteeing the public's right to know, there is no way to hold corporations accountable for human and worker rights—and these abuses will continue behind closed doors.
When you see an Ann Taylor suit on sale for $198, do you ever imagine 20-year-old women in China being forced to work 96 hours a week, from 7:00 a.m. to midnight, seven days a week, and being paid just 14 cents an hour? When you think of Ralph Lauren or Ellen Tracy do you imagine women in China being paid 23 cents an hour to work 15-hour shifts six days a week? Or the Esprit label, which is sold in 44 countries around the world, being made in China by young women forced to work from 7:30 a.m. to midnight, seven days a week, all for just 13 cents an hour? Do you associate Liz Claiborne with 12-hour shifts, six days a week for just 25 cents an hour, or J.C. Penney clothing with a 78-hour work week in China, 11-hour shifts, seven days a week, to earn just 18 cents an hour?
Is it possible that after all the publicity over child labor in Honduras, that Kathie Lee Gifford and Wal-Mart would today continue to make handbags in China, with young women forced to work seven days a week, 12 hours a day, earning as little as 12 to 18 cents an hour with no benefits, housed in cramped, dirty rooms, fed on thin rice gruel, stripped of their legal rights, under constant surveillance and intimidation—really just one step removed from indentured servitude? Unfortunately, Kathie Lee Gifford and Wal-Mart are in fact producing handbags in several factories under conditions which violate even China's labor laws, let alone internationally recognized human and workers rights standards.
Could you imagine that Wal-Mart, and other giant American companies, are actually lowering standards in China, slashing wages and benefits, extending forced overtime hours, and weakening respect for human rights while relocating their work to a growing sector of unregulated foreign-owned sweatshops in the south of China?
When you went holiday shopping for new sneakers, did any of the store managers mention to you the "Black Season?" This is what many shoe workers in China call the months of May and June, when they are forced to work 16-hour shifts seven days a week—110 hours a week—so the sneakers will be on store shelves in the U.S. in time for the holiday season.
Could it be that the industry and the giant multinationals—Wal-Mart is the largest retailer in the world—are just so arrogant and opposed to reforming factory conditions, so indifferent to human rights, that they just do not care? Do they think they can fool the American people?
It is time to name names, and to drag the companies out from behind closed doors in China and into the light of day. Let the American people decide if we need to keep applying social pressure on our corporations, to do the right thing, to respect human rights.
Who's behind the label? Most of the workers in China producing goods for the U.S. companies are young women, 17 to 25 years old. The majority are migrants from rural communities, with little formal education, and are often unaware of their legal rights. "Home" for these workers is 6 to 12 people sharing a dorm room. For breakfast, they are fed thin rice gruel. They can be fired for even discussing conditions in their factory. They are afraid, isolated and vulnerable, with nowhere to turn. Independent human rights, labor and religious groups are outlawed in China and immediately crushed. These women never heard of U.S. Corporate codes of conduct.
Mr. Irwin Gordon is someone who knows a lot about China, first hand. He is president of the Ava-Line company, located in Whippany New Jersey, which makes lapel pins. Ava-Line, which sold 150,000 lapel pins to the 1996 Republican National Convention, was ranked 68 in Entrepreneur's list of the "100 Hottest New Small Businesses in America." In trying to explain the success of his small company, Mr. Gordon made a mistake, he told the truth. This is what he said:
We have a factory in China where we have 250 people. We own them; it's our factory. We pay them $40 a month, and they work 28 days a month. They work from 7 a.m. to 11 p.m. with two breaks for lunch and dinner. They all eat together, 16 people to a room, stacked on four bunks to a corner. Generally, they're young girls that come from the hills.
(Business News, August 21, 1996)
That is 14-hour shifts, seven days a week (with every other Sunday off) for 9 cents an hour. And he "owns them," the young girls.
In an attempt to cut costs, U.S. companies are shifting work out of publicly owned, regulated factories in the north of China, to a booming sector of low wage, unregulated foreign-owned private factories along China's southern coast. Taiwan is a major investor in these assembly plants in China producing for export to the U.S.
The following is a first-hand description of how the Taiwanese managers run their shoe factories in China—with an iron fist:
Workers come from the villages several thousand miles away. There is no reason to place confidence in them. Under such circumstances, what can we do but military-like management? In the mainland, honor and self-respect cannot help improve productivity. It seems the more direct and primitive the way, the more useful it is.
(Taiwan Footwear News, October 1997, quoted in Change, December 1997)
No doubt such military discipline, behind closed doors, with young women, in an environment swept clean of independent human rights or labor organizations, is convenient for the American companies.
But what do the Chinese workers think of all this? Han Dongfang, who was imprisoned for two years—where he lost half a lung to tuberculosis—for attempting to organize an independent union, summed up the workers' experience as this:
People have always said foreign investment is the hope of China. This is our bridge to the world. But what comes across the bridge are 12-hour shifts, seven-day work weeks and only two trips to the bathroom a day. What comes across are factory fires that kill hundreds of workers who are locked in because their bosses are afraid they will steal the products. The Chinese government has put an invisible net across the bridge that allows money to come in but not the freedoms of a civil society, not the rule of law and not free trade unions.
(This Week On Line, Pathfinder, Asia Week, July 1997)
No one in America would knowingly support companies exploiting young women in China, paying starvation wages and stripping workers of their rights, only they don't know it. When they learn of these conditions, people get angry, but they often feel lost. What can we do? Last year American companies imported $8.7 billion of apparel made in China, $8 billion worth of toys and sporting goods, and $6.4 billion of footwear. In the first 10 months of 1997, the American people purchased one billion garments made in China. These are our companies. We can do a lot.
The problem is that the American people have no way of knowing what is going on in China. There is no way on earth to know which U.S. companies produce what and how much, in which factories in China, paying what wages under what human rights conditions. The companies tell us that this is "proprietary information" that the American people have no need to know, no right to know, and will not know. Our job is just to buy, period.
Unfortunately, it is hard to think of a single company that has done the right thing on its own, without feeling some pressure, some push, some exposure, some embarrassment by being dragged out in the light of day. Companies do respond, however, to social movements.
We can move these companies to do the right thing. We can demand Corporate Disclosure—the Public's Right to Know. We want to know where the products we buy are made and under what conditions.
We can demand that these factories be open to independent human rights monitoring by local respected human rights and religious non-governmental organizations, to guarantee compliance with fundamental rights, and to open a precious space for workers to empower themselves and regain their dignity. If companies have nothing they are trying to hide, then why should they be afraid of religious and human rights leaders having access to these plants?
We can demand that these companies pay a living wage. Surely Wal-Mart can afford to pay more than 18 cents an hour!
Finally, this is not only the right thing to do, the moral choice, but it is also in our self interest. We cannot allow the multinational corporations to pit American workers against the people in China in a race to the bottom over who will accept the lowest wages and benefits, the most miserable working and living conditions.
Think of it, if J.C. Penney can pay 18 cents an hour wages in China and then sell us the product at an exorbitant mark up, and get away with it, why should any company manufacture anything in the U.S.? And the flip side is, who in China, making 18 cents an hour, could ever afford to purchase anything made here?
We are in the global economy up to our necks. We are in this together, and if we do not act together to raise standards around the world, then there is only one way to go, and it is down.
"You don't speak out in China, because everyone is isolated, especially if you are a worker. Whoever challenges the authorities gets hurt."
--Han Dongfang, just after his release
from prison for organizing
an independent union.
World Press Review, December 1991
In 1978, when Free Trade Zones were being developed around the world in low wage countries, China's paramount leader Deng Ziaoping began creating similar autonomous industrial areas, or special economic zones, which he said would be China's "windows on the global economy." Today there are 400 special economic zones in China where 30 million people work. These special economic zones enjoy favorable tax conditions and are granted lower import and export duties. Manufactured goods now make up 80 percent of China's total exports.
The United States takes in one-third of China's total exports worldwide.
So, who are the workers who make our clothing, our shoes, our toys?
Beatings, Forced Overtime, Cheated on Wages, Firings, Blacklisting
"Beatings, insults, arbitrary fines, body searches, forced overtime, few or no breaks and holidays, wage arrears, embezzlement of wages and being cheated out of overtime pay are all part of the picture for workers in these enterprises. Their plight is made substantially worse as a result of very poor housing conditions and quality of life in general. And the situation is getting worse. Serious workplace accidents and injury, fatal fires and poisoning as a result of having to work with deadly chemicals without adequate training or protection now engulf the life and health of the mingong (migrant workers). Resistance, or even an expression of dissatisfaction, is met with deportation back to the village or even a prison term."
"Workers often run the risk of being dismissed or blacklisted in their struggle for their rights. Activists are either fired, suspended and fined or do not get their contracts renewed. In many cases, physical assaults and victimization take place after stikes or stoppages."
--Asia Monitor Resource Center
Eighty percent of these assembly workers are young women, ranging in age from 17 to their mid-20s. Perhaps the average age is 22. It is not uncommon for women over 25 years of age to be dismissed for being "too old." (It is also a way for the company to cut back on having to pay maternity benefits.)
The majority of the factory workers are migrants from the countryside, referred to as "mingong," meaning "peasant workers." They are granted temporary residency permits, which are valid only so long as they are working. Companies sometimes confiscate these ID cards, leaving the worker extremely vulnerable.
For most of the workers, this is their first paid job. They have little formal education and do not know their rights. Most workers our researchers spoke with believed that overtime started only after midnight, despite the fact that they had been working since 7:30 a.m. They were unaware of their legal right to work contracts, holidays, overtime pay and more.
Many of the workers were in a very difficult position, since their families depended on their financial support. One young woman told us that her little brother was waiting to go to school back in their province, but they needed her wages. Another couple, who shared a single dorm room with two other couples, said they were working so they could send money home for their two children.
The workers are clearly afraid. Giving information about factory conditions can get you fired. Raising grievances, or carrying out any work action, is also met with firings, which are widespread. People learn to be quiet in order to protect their job. When you are fired, you lose everything. There is no unemployment insurance, no social security. You are deported back to your rural community with nothing.
Workers are isolated and alone, with nowhere to turn, no independent unions, human rights, religious or worker education organizations are allowed.
The factory workers are also surrounded by widespread poverty. If you lose your job, a thousand others are lined up to take it. There are 140 million people in China without employment. (In 1995, according to China's state statistical bureau, 18.3 percent of China's people were without work—out of a total workforce of 830 million, 690 million people were engaged in some form of economic activity.)
According to Human Rights Watch:
"Chinese labor activists were among those who received particularly harsh administrative sentences during the year, and Chinese independent union organizer Han Dongfang, now resident in Hong Kong, remained banned from entering the mainland."
"In China, the government increased its control of organized religious activities, claiming that religion was being used by foreign powers to subvert and destabilize the country. The stepped-up control affected Protestants and Catholics, Muslims in Xinjiang and Tibetan Buddhists."
--Human Rights Watch, November 1997
There are great language barriers, so the women are unaware of what labels they sew, and have never heard of the U.S. companies they ultimately work for. They are in the global economy with no tools to defend themselves. They have no information whatsoever on these companies.
Add to that the numbing repetitiveness and tiredness of working 12, 14 and 16-hour shifts seven days a week, "specialists" repeating the same operation over and over again. Moving from work to dormitory under constant surveillance, these workers, mostly young women, are surely in a difficult position.
But they are proud women, proud that they have left the rural poverty and started a new life, proud that with sacrifice they can send a little money home to their families.
It is amazing, but despite the threats, the firings, the fear and isolation, the workers told our researchers that they would like to have a union—only they could not, because they would be fired if they tried to organize openly. These workers want their human rights and they want to learn more.
Despite government repression, spontaneous worker protests are widespread.
On January 20, 1998, the New York Times reported:
"Almost every week now reports filter out, usually via human rights groups based abroad, of demonstrations or protests over labor issues."
The question is: How will the American companies operating in China deal with the vulnerability of these workers? Will they act in a way to improve conditions, or will they take advantage of them?
There is a saying in China among human and labor rights advocates: that trying to investigate transnational corporations is like riding the Asian Tiger, and the tiger does not eat grass. In other words, watch your back.
In April, July, September and October 1997, human rights researchers working with the National Labor Committee investigated 21 garment factories in four areas of China—Guangdong, Shanghai, Jhejiang, and Tianjin. Being caught investigating factory conditions in China can get you arrested. Being seen talking with human rights advocates can get a worker fired. The researchers who investigated the factories will go unnamed due to the likelihood of severe reprisals being directed against them by the Chinese government. The identity of the workers who spoke with us will also be protected.
It is noon in New York and 11 p.m. in China.
According to human rights organizations
"Most of the corporations are very proud of
"It is clear that the corporations keep their
--Hong Kong Christian Industrial Committee
The factories we visited in China attempted to cloak their operations in total secrecy. Often, no signs are posted on the factories. Many are not even listed on official business directories in customs offices, or in special economic zone headquarters. Visitors are not allowed, not even potential U.S. buyers.
U.S. buyers almost always deal with agents working out of upscale showrooms in Hong Kong, who present themselves as legitimate sourcing agents. American companies prefer the one-stop shopping offered by their Hong Kong agents, who also function as brokers and quality control managers, overseeing production from beginning to end. Often U.S. companies then list these agents as the primary suppliers, when in fact they neither own nor operate any production facilities. They source the work to China.
In the South of China near Shanghai and Hong Kong, our researchers found evidence of a widespread, and growing, informal system of subcontracting, where ten factories at a time could be working on one order. It is common in China for U.S. companies to maintain relations with many contractors. For example, Avon, the cosmetics company, has 50 suppliers in China, which not only guarantees quick production whenever it is required, but also allows Avon to pit them against each other in a competition to provide Avon the lowest costs. Couple the secrecy and the use of multiple contractors with this large scale informal sourcing network, the existence of which the U.S. companies may not even be unaware of, and it becomes clear how confusing the situation really is.
It is possible that many U.S. companies do not even know in which factories their clothing is being produced, let alone what conditions are in these plants, which they may never have visited.
This is, of course, very different from what the companies tell us. They say everything is under control; all is fine; they are monitoring their contractors in China for compliance with human rights.
The American people have no way of knowing. Such little independent information comes out of China, especially regarding working conditions, wages and respect for human rights in factories producing for U.S. companies.
How well, in fact, do American companies monitor factory conditions in China? China is a big place with 1.2 billion people. There are 4 million apparel workers alone in China, and 44,000 apparel factories. Three major dialects (Chinese or Mandarin, Cantonese and Shanghainese) are spoken in China, which is 13 time zones away from New York—a 17 hour flight. In China, independent human rights, labor or religious non-governmental organizations are outlawed and immediately suppressed. Even worker rights educational centers are crushed and disbanded.
Are American Companies Responsible for Factory Conditions-
What Are Corporate Codes of Conduct?
In response to growing awareness and public outcry over widespread sweatshop abuses, companies adopted voluntary human rights codes of conduct, claiming these codes would guarantee the rights of workers producing their goods anywhere in the world. The standard corporate code of conduct prohibits forced and prison labor, child labor, discrimination, physical abuse and sexual harassment, while guaranteeing decent and safe working conditions with legal minimum or prevailing wages, and that contractors' factories will strictly enforced all local labor was, including the right to form imdependent unions.
After a second round of public criticism that the corporations were doing little, if anything at all, to implement and monitor their codes- in fact, the vast majority of workers had never even heard of these codes- companies promised to step up enforcement. For example, Walt-Mart and Kathie Lee Gifford now started that every contractor's plant would first have to pass a rigorous inspection including responding to detailed questonnaires and signing a contractual agreement to fully implement Wal-Mart's code. Wal- Mart inspectors would make unannounced visits to these factories. There would be annual reviews and illegal subcontracting would be ended.
Wal-Mart and the other companies told the American people to trust them- for who could better monitor the palnts than they could, who understood how the industry functioned? This allowed the companies to go on producing behing closed doors, with no real public accountability.
But Such claims did trap the companies, in that they cannot not have it both ways. Either they are monitoring their contractors' operations- as they say they are, in which case they are reponsible for factory conditions, and therefore are misleading the American people with false claims. In fact, codes of conduct can endorse very beautiful human rights language, but without public disclosure of which factories the companies are producing in, there in no hope for any real independent monitoring and corporate accountability for human rights.
45,000 U.S Apparel Jobs Lost in 1997
In 1997, 45,000 American apparel workers lost
The workers are afraid to talk openly about factory conditions. Arbitrary firing for even raising grievances is widespread. After working 12, 14, 16 hour shifts, seven days a week, the workers return to dorm rooms they share with 6 to 12 others. Many workers feel that they are under constant surveillance in an atmosphere of intimidation. Many are very young women who migrated from rural areas and are unfamiliar with their legal rights.
Given the preponderance of these facts—factories operating in secrecy, the multiple contractors, widespread subcontracting, no independent human rights or labor groups, and the trap the workers are in, isolated and vulnerable—how real is the claim by U.S. companies that they are adequately monitoring their production in China?
Think of it. It seems impossible, but in just the first ten months of 1997, American apparel companies and retailers imported over one billion garments made in China. That is more than four garments each for every single man, woman and child in the United States. (From January to October, 1997, China exported 1.857 billion square meter equivalents of clothing to the U.S. There are 1.66 meters of fabric in the typical shirt.)
In dollar terms, U.S. companies imported $4.1 billion worth of clothing sewn in China in just these ten months.
U.S. apparel production in China is booming. In the first eight months of 1997, U.S. apparel imports from China were up an amazing 46.2 per cent.
But even these huge figures are misleading and understate the amount of clothing actually imported. The American Apparel Manufacturers Association (AAMA), using U.S. government trade figures, placed U.S. apparel imports from China at $3.769 billion in 1996. What is not explained to the American public however, is that this $3.769 billion figure includes only trade covered under the Multi-Fibre Agreement (MFA) governing import quotas. In fact, in 1996, U.S. companies imported another $1.081 billion worth of silk garments which they had made in China, but which enter the U.S. quota free. These silk imports also continue to boom: in the last year, October 96 to October 97, U.S. companies imported $1.4 billion worth of silk garments from China.
Overall Trade Deficit with China Grows
It is not just apparel. China produces one-half of
In 1996, the U.S. imported $51.4963 billion
In 1997, our merchandise trade deficit with China grew to $49.7 billion, up 26 percent over the previous year.
More accurately then, in 1996, U.S. companies imported $4.85 billion worth of apparel made in China ($3.769 + $1.081 = $4.85).
Nor do the official U.S. government trade figures like to draw attention to the vast amount of clothing illegally transshipped to the U.S. from China each year. Carlos Moore, Executive Vice President of the American Textile Manufacturers Institute, states that the U.S. Customs Service is aware that "there are billions of dollars of transshipments from China to the U.S." (Women's Wear Daily, January 1998).
We could go further. In 1996, U.S. apparel imports from Hong Kong totaled $3.861 billion. In 1997, Hong Kong was incorporated into China, yet the industry has decided that Hong Kong will be considered a separate trading entity for the next 50 years.
However, if we add Hong Kong's $3.861 billion in apparel imports to mainland China's $4.85 billion, a truer picture of U.S. companies' clothing imports from China totals $8.711 billion, which actually makes up 22% of America's apparel imports world-wide.
To put some of these figures into perspective, consider that for all of 1996, American companies exported a total of $7.4 million ($7,351,000) worth of apparel to China. This is actually a drop from 1995 when apparel exports were $8.746 million.
Even leaving aside Hong Kong, American apparel companies' exports to China came to less than 2/10 of one percent of the amount of clothing they in turn imported from China. ($7.351 million ÷ $4.85 billion). U.S. companies import 6,600 percent more clothing made in China than they export there.
If we include Hong Kong, the U.S. has an $8.7 billion trade deficit with China for apparel.
Three Factories Making Kathie Lee Handbags
Our researchers investigated three privately owned factories making Kathie Lee handbags in Dongguan City, which is located in the southern coastal province of Guangdong. These particular factories were owned and operated by investors from Hong Kong and Taiwan. We believe that there are at least 10 factories in China producing handbags for Kathie Lee/Wal-Mart.
Of the 21 factories our researchers investigated across China, these Kathie Lee handbag plants were among the worst.
Like other factories described in this report, these handbag plants operated behind a veil of secrecy, with a high level of surveillance. For example, dormitories are always guarded by at least two people, and visitors were strictly prohibited from entering the rooms. Our interviews with the workers had to be conducted away from the factory in a safe location. (All descriptions of factory conditions throughout this report were provided to the NLC by workers in China.)
The vast majority of the workers were young women, and 70 percent were migrants from the countryside.
The workers knew they were producing for an American company under contract with a Hong Kong agent, but they did not sew on the labels at the point of production. This was done afterwards, in another location. (Our researchers encountered this quite a bit at several apparel plants. In light of the billions of dollars of illegal transshipments from China each year, this is of obvious concern.)
It is extremely disturbing that none of the workers we spoke with in these plants had ever heard of the Kathie Lee/Wal-Mart Corporate Code of Conduct, which was supposed to guarantee their rights. In fact, the women in these factories had no idea of what their legal rights actually were.
Kathie Lee Handbags: If Kathie Lee handbags could speak, this is the story they would tell:
LIANG SHI HANDBAG FACTORY:
Wages as low as 13 cents an hour—$1.25 pay for a 10-hour day/working 7 days a week/no fire exits in the factory/dirty cramped dorms with five beds to a room/workers are left with $3.44 for a 7 day work week after deducting food and lodging.
Liang Shi Handbag Factory
Liao Xia Industrial District
Hou Jei Town
Dongguan City, Guangdong
The Liang Shi factory occupies a three story building, with just two entrances in the front on either side of the structure. There are no fire exits. Also the two front doors are partially blocked by factory equipment and debris scattered outside the plant, making any emergency exit even more hazardous. Workers report that the factory itself is not clean.
There are approximately 800 workers, the vast majority young women, 70 percent of whom are migrant workers from the countryside.
What Should a Living Wage Be in China
According to independent labor rights
The typical workweek stretches to 60 or 70 hours, with 10 hour shifts six or seven days a week.
Hourly wages for warehouse personnel are as low as 12 cents an hour, while the sewers earn between 18 cents and 23 cents an hour. That means that a woman sewing Kathie Lee handbags would earn $1.80 after working a 10 hour shift, and $11.09 for a six day, 60 hour workweek. In a year, she would earn $576.92. It would take this woman more than a week's wages to purchase one of the $12.96 Kathie Lee handbags, of which she sews hundreds each day.
A worker earning at the high end of 23 cents an hour would earn $2.31 for a ten hour shift, and $13.87 for working six days a week.
Warehouse workers earn just $1.25 for a ten hour day, or less than 13 cents an hour. They work seven days a week, 70 hours, to earn just $8.75. It gets worse. Most are migrants from rural areas who are forced to pay for their food and lodging, which costs them $5.31 a week. Only 76 cents a day, it sounds incredibly cheap. But these workers are only making $8.75 for working 10 hour shifts every day of the week. That means at the end of 70 hours of work, after deductions, they would be left with $3.44!
They are really in the position of being indentured servants! Even a sewer who earned $11.09 for working a 60-hour week would be left with only $5.78 after the deductions for food and lodging. And these workers receive no benefits, no health insurance, pension, workers compensation, nothing.
In their first paychecks the workers are always shortchanged one or two weeks wages. They get paid once a month, on the 15th day. Despite the fact that they may have worked 40 or 45 days prior to receiving their first pay check, they are only paid for the standard one month period.
The workers described their dorm as dirty, with debris scattered everywhere, and very cramped. There were no screens and many of the windows had broken panes of glass. Two people had to share a small bed, five of which were crammed into a room, nearly filling it. There is just a foot and a half of open space between the beds, and another very narrow walking space, just enough to be able to enter the room and to reach the beds.
No visitors are allowed into the dorm, which is under 24 hour surveillance.
The workers also complained that the food they received was not good, and their diet lacked sufficient protein and nutrition.
One worker told our researcher: "I don't understand it. Very fine leather is stored in the factory. How can the factory pay us so poorly?"
Nor are the workers given their legal work contracts, which leaves them especially vulnerable. They have no union, and never heard of any such thing as a Wal-Mart/Kathie Lee Corporate Code of Conduct. In fact, the workers were unaware of what their legal rights were.
Hang tags attached to these Kathie Lee handbags advertise to the American people that a portion of the proceeds from the sale of this product will be donated to children's charities. Is it really possible to help our children on the backs of women in China being paid just 12 cents an hour?
|A Kathie Lee handbag made in China with a tag that reads, "A portion of the proceeds from the sale of this item will be donated to various Children's Charities."|
YA LI HANDBAG LIMITED:
18 cents an hour/some workers not paid for three and four months/ mandatory overtime, fined for refusal/sometimes 16-hour shifts/ overtime premium is 2 cents an hour/12 workers to a dorm room/no work contract/no benefits/below subsistence wages, the workers are trapped with no money to even leave to look for better work/never heard of the Kathie Lee/Wal-Mart Code of Conduct.
Ya Li Handbag Limited
Xini Jan Village
Dongguan City, Guangdong
The regular work week at the Ya Li factory is made up of 10 hour shifts six days a week, from 7:30 am to 6:30 pm with an hour off for lunch. During rush periods there are mandatory 16 hour shifts, beginning at 7:30 am and not ending until midnight. Overtime work is obligatory; refusal to stay results in a fine of up to a half day's pay. The overtime premium amounts to 2 cents an hour in addition to the standard piece rate.
Wage rates vary between 18 and 28 cents an hour. For the standard 60 hour, six day week, a worker being paid 18 cents an hour would earn $11.10 a week, $48 per month, and $577 for the year. At the 28 cents an hour rate, weekly earnings amount to $16.64.
There are approximately 500 workers, mostly women, 70 percent of whom are housed in dorms, 12 to a room. With its painted grey exterior the dormitory resembled a prison. Food and lodging costs are deducted from the workers' wages, though no one had any idea of what this amounted to, since nothing is listed in their pay stubs. Here too, the workers described their diet as lacking nutrition and protein.
Many of these Ya Li factory workers were clearly badly off. Some had not been paid for months. Our researchers heard the following: "I have worked at this factory for four months. I work from 7:30 am to 12:30 pm, and 1:30 pm to 6:30 pm, six days a week. When I was hired the factory told me the first payment would be given to me in 40 days. But is has been four months and I haven't received any pay. I have to borrow money from my roommates or relatives for spending money."
Another worker related, "I have been working for three months and I haven't been paid. I work 10 hours a day. Sometimes working overtime until midnight. If I miss overtime just one day I am fined 20-to-50 percent of my day's pay. The factory has never explained the payment delay." Nor do the workers receive benefits.
Dorm Life/ Surviving on a thin rice gruel
After working shifts averaging 12 hours a day or longer
Lunch and dinner are more or less the same, consisting of
In the majority of cases, the dorm food is insufficient, so
(Under Chinese law, each migrant worker should enjoy for
One woman told us: "I don't know what to do because I don't have money. If I wanted to find another job I wouldn't have the money for transportation or living expenses." In other words, she worked ten-hour shifts six days a week, but after unlisted "deductions" by the factory, she was left with nothing, so she could not even afford to take a bus to the nearby city to look for better work.The trap was pretty much airtight. The workers were not given their legal work contracts, so they were in effect, stripped of their rights and left with no legal recourse. Also, just to get a job at the Ya Li factory a worker had to pay a $4.00 deposit up front. If you decided to leave the factory during the first three or four months of your employment, you forfeited your deposit.
There was no union at the Ya Li factory, and the workers were completely ignorant of any Wal-Mart Code of Conduct which was supposed to guarantee their rights.
Ya Li was an appropriate name for such a factory: In Chinese it means "pressure."
LI WEN FACTORY:
12 hour shifts, 7 days a week, 84 hour workweek/some 24 hour shifts/wages as low as 20 cents an hour/no overtime premium/no benefits/fined up to 2 days wages for not working overtime/no fire exits in the dorm/never heard of Wal-Mart Code of Conduct.
Li Wen Factory
Liu Wu Qu
Dongguan City, Guangdong
The work week at the Li Wen factory is grueling; 12 hour shifts, seven days a week, 84 hours a week, with only every other Sunday off. Each workday stretches from 7:30 am to 9:30 pm, broken into three periods: 7:30 am to 12:30 pm, 1:30 pm to 6:30 pm; and from 7:30 pm to 9:30 pm. During rush periods 24-hour shifts are mandatory. There are over 1,000 workers at the Li Wen factory, the vast majority young women, and at least 70 percent of the workers are rural migrants.
At times, the Saturday and Sunday shifts are lowered to 10 hours per day from the normal 12 hours. This would amount to an 80 hour workweek. One worker described his schedule: "I have worked at the factory for one year. I usually work 7 days, 12 hours per day. Sometimes on Saturday and Sunday we don't have to work at night; we don't work the usual overtime hours between 7:30 pm to 9:30 pm. I get only two days off per month. During the Dragon Boat Festival I didn't work the 7:30 pm to 9:30 pm overtime hours, so I could be with my relatives and friends on the holiday. I was fined my whole day's pay."
Another worker explained, "Yes, the pay was very low. I cannot save my money. I want to work overtime to get extra money, but too much overtime will affect my health—making me feel weak—so I don't want to work overtime everyday. During rush orders they give us no choice, because if we don't work overtime we get fined up to $6.25"—(2 days' pay).
Wage rates vary at Li Wen vary between a low of 20 cents and a high of 35 cents an hour. At 20 cents an hour, for a 12 hour shift, the day's pay would amount to $2.40, or $16.64 for a seven day workweek. At the 35 cents hourly wage, one would earn $27.74 for working an 80 hour week. This top rate would come to $4.20 per day for a 12 hour shift.
No overtime premium is paid. Hourly earnings are based solely on the standard piece rate. One worker described the easiest piece rate work as sewing the straps for the handbag, which paid 19 cents for every 100 straps made.
The workers received no benefits, and had to pay their own medical costs, plus food and lodgings. After a year, the factory would pay one half of medical insurance costs.
The dormitory was separate from the factory but linked by a courtyard, so you could only enter the dorm by passing though the factory. No visitors were allowed. The dorm had no fire exits.
Fifteen year old Wendy Diaz (center) with co-workers at Global Fashions factory in Honduras where they made Kathie Lee pants for Wal-Mart.
The cost for dining at the dorm canteen was $1.25 U.S. per day. The workers said the food was not very good. But it does seem cheap, at 42 cents a meal. Yet when you are only making 20 cents an hour, this means that you must work two hours just to pay for each meal, working six hours a day just to eat and then you have to pay rent, and any other expenses.
Lodging costs at these crowded factory dorms vary between $9.00 and $20 a month, further eating into the meager wages the women make. Once again, there is no union, no legal work contracts, and no one ever heard of a Corporate Code of Conduct.
It is no wonder that the workers were unable to save any money, despite the grueling work week.
What Happened? Is Kathie Lee to blame—or, is it Wal-Mart again?
There is an important background to the abusive conditions under which Kathie Lee handbags are being made in China.
In 1996, in the aftermath of the National Labor Committee report that 13, 14 and 15-year-old girls were sewing Kathie Lee pants in a Honduran sweatshop—working 13 hours a day and earning just 25 cents for every $19.96 pair of pants they sewed—Ms. Gifford agreed to open her contractors' plants to inspection by local, independent human rights and religious monitors to guarantee that these conditions would never again be repeated.
This agreement grew out of a very special meeting Ms. Gifford had in New York in June of 1996, with fifteen-year-old Wendy Diaz, one of the teenaged girls who had sewn Kathie Lee pants at the Global Fashion factory in Honduras. Wendy had started working at Global Fashion when she was 13 years old. Ms. Gifford leaned forward toward little Wendy and asked her to tell us about her life. Wendy, who had never traveled before, who had to start working before she was able to complete fifth grade, and who had never publicly spoken before, looked seriously at Ms. Gifford and began to speak.
Wendy Diaz explained what it was like to live in one room with 11 other people; what it was like to earn 31 cents an hour and often not have money to buy food; how humiliating it felt when a supervisor threw the Kathie Lee pants in your face, cursing, screaming that you had made a mistake and calling you a "shit head" or a "chicken head." She explained how your body hurts—but you try to learn to bear it—when you need to use the bathroom but are prohibited, since the bathrooms are locked and you need a ticket to go, but visits are limited to twice a day—once in the morning and once in the afternoon; and how, when—after working 12 or 13 hours—you come out of the factory at 8:00 or 9:00 pm, in the pitch darkness, in a poor, dangerous neighborhood with no public transportation at that hour, you gather together with the other girls and run home singing and shouting, afraid you might be robbed or raped.
At that point, Ms. Gifford did something very beautiful and remarkable. She was genuinely moved. Ms. Gifford apologized to 15-year-old Wendy Diaz. She asked Wendy to please believe her, that she did not know conditions where like this, but now she wanted to work with Wendy and with the National Labor Committee, the People of Faith Network and UNITE—who were participating in the meeting—to end these abuses. "I give you my word," Ms. Gifford told Wendy, "this will not happen again."
It was at this meeting that Ms. Gifford asked about independent monitoring and why it was necessary. It was explained that the majority of workers in assembly plants producing goods for U.S. companies—not just in Honduras but around the world—were young women between the ages of 17 and 25. Many had little formal education, and very few were aware of their legal rights. In fact, these young women had not even heard of the American companies whose products they were making. They had no idea what the products sold for. They had never heard of the Corporate Codes of Conduct which the companies say will guarantee their rights. They had never heard of the International Labor Organization, or of internationally recognized workers rights. American companies are bringing these young people into the global economy with no tools to defend themselves.
Cal-Safety: Possible Link to El Monte Slave Shop
The owners of the El Monte slave shop in California, where Thai women were forced to work locked behind barbed wire and under armed guard, maintained a "front shop" in downtown Los Angeles, known alternately as D & R Fashions. It was located in a large warehouse with two addresses: 1314 West 12th Street and 1319 West 12th Place.
All cut cloth from the manufacturers and retailers was delivered to the "Front Shop" and was sent from there to El Monte and to another unregistered sweatshop for sewing. Once the garments were sewn, they were returned to downtown "front shop" for finishing, including sewing on buttons and button holes, packing, checking and trimming. The complete garments were then sent to the manufacturers and retailers.
The El Monte "front shop" was a sweatshop where Latino women were forced to work seven days a week: 11 hour shifts Monday through Saturday and another four or five hours each Sunday. The treatment was abusive. The shop was also dirty. Workers were shouted at, harassed, and often had garments hurled in their faces.
Anyone who had been in the "front shop" would know immediately, given that there were only 10 sewing machines, that the number of garments coming out of there had to be being sewn elsewhere.
Before the slave conditons at El Monte were finally uncovered, Cal-Safety visited the "front shop." The workers told their attorney, Julie A. Su of the Asian-Pacific American Legal Center, that Cal-Safety representatives had come through the "front shop" conducting an inspection, and though they did not speak with the workers, they did hand out their business cards. It is not clear who cal-Safety was representing-which manufacturer or retailer it was under contract with, but if they had taken their monitoring seriously they should have traced the garments to their actual production source. If Cal-Safety had done this, they would have discovered the El Monte slave shop, and the women would have been freed at an earlier date.
It would be interesting to know what Cal-Safety was doing in the El Monte "front shop"- who they represented at the time, and why they failed so completely, not even attempting to trace the
For further information, or to help the El Monte workers, contact:
Julie A. Su, Attorney
On top of that, they are almost always stripped of their rights, fired and blacklisted if they dare to stand up and defend themselves, or even meet to learn their rights. These workers are in a very vulnerable position. They could be—and have been—fired for even talking about factory conditions.
Under such intimidating circumstances, it is critical that workers be approached by local, respected human rights and religious organizations whom the workers trust. The women can speak to these organizations in confidence. They can work together to gradually restore respect for human and worker rights.
Ms. Gifford understood this, and the same evening, following the meeting, she signed an agreement endorsing "independent monitoring," specifically pointing to the Committee for the Defense of Human Rights in Honduras (CODEH) as an example of the kind of independent human rights organizations that should conduct the monitoring. Ms. Gifford stated that such independent monitoring "would include those factories worldwide where Kathie Lee Gifford apparel is manufactured." Ms. Gifford went even further and agreed with us that the workers making her clothing line and accessories, and other Wal-Mart products, should be paid a "living wage." Ms. Gifford stated that these employees should be "provided with a living wage that ensures work with dignity."
However, more than a year and a half after the agreement, neither truly independent monitoring nor a living wage has been implemented.
We can only speculate that when Ms. Gifford approached Wal-Mart, they flat out rejected any pursuit of independent monitoring or discussions of a living wage.
Instead of independent monitoring, Wal-Mart and Ms. Gifford hired a for-profit corporate consulting firm, Cal-Safety to check conditions in their contractors' facilities. Evidently, Cal-Safety was under contract to monitor the factories in China producing Kathie Lee handbags. If they were, Cal-Safety's monitors failed miserably. Cal-Safety was also supposedly monitoring plants in Nicaragua where Wal-Mart's "Faded Glory" shirts were being made—also under abusive conditions with below-subsistence wages of 23 cents an hour.
What is the difference between real independent monitoring and the role Cal-Safety plays? Cal-Safety is working for Wal-Mart and Ms. Gifford—just as these hand bag factories in China are producing under contract for Wal-Mart. In the workers' minds—and the perception seems accurate—there is no difference between Cal-Safety and Wal-Mart, so if they are approached by Cal-Safety monitors, they tell them what they think the company wants to hear, since they want to keep their jobs.
Cal-Safety's job is to report factory conditions back to Wal-Mart, leaving Wal-Mart to decide what to do, if anything. If Wal-Mart were to decide it would prove too embarrassing for the company should these conditions become known to the public, they could pull out, leaving the women without work. Every bit of this, everything discussed and done, is done behind the backs of the workers, who are left completely in the dark.
Cal-Safety's job is to protect Wal-Mart's reputation, not to defend human rights.
Carol Pender, now the president of Cal-Safety, was a buyer for apparel companies for the better part of a decade before she bought Cal-Safety. Recently, Ms. Pender told Women's Wear Daily that, in fact, it was the sweatshop workers who were violating wage laws, since "some workers are requiring the factories to keep double sets of books." Ms. Pender believes the workers resent having to be paid according to federal overtime laws (Women's Wear Daily, October 20, 1997). How's that for human rights work?
Could you imagine a for-profit corporation like Cal-Safety, paid by Wal-Mart, going to China and informing the workers of their rights under China's laws and under Wal-Mart's Code of Conduct, informing them of their internationally recognized workers rights, of the important deliberations of the White House Task Force which is now confronting the issues of independent monitoring and a living wage to assure that products are made under humane conditions?
The role of truly independent monitoring is to guarantee respect for human rights, by creating a space so the workers can better learn and exercise their rights and empower themselves. The role of Cal-Safety is to advise Wal-Mart.
In April, 1997, almost a year after signing the agreement, it was brought to Ms. Gifford's attention that nothing had been done to implement the independent monitoring agreement. This, despite the fact that human, religious, women's and labor rights organizations had come together to form independent monitoring teams in both Honduras, where Kathie Lee clothing is being produced, and El Salvador. The models now existed.
We still have no response from Ms. Gifford.
For its part, Wal-Mart has refused to even join the White House Task Force.
Would it make a difference if Wal-Mart seriously joined the effort to improve factory conditions? Consider this: Wal-Mart's annual sales are larger than the entire GDP (Gross Domestic Product) of 161 of the world's 191 countries!
Do Wal-Mart and Other U.S. Companies Even Know
KangYi Fashion Manufacturers
2 Bagua Road
Bagualing, Shenzhen, Guangzhou
Three hundred women, 18-to-30-year old migrants from rural areas, work on average between 78 and 84 hours a week (up to 96 hours during rush periods) sewing suits and jackets for Ann Taylor and Preview. The 84-hour work week is made up of 14 hour shifts, six days a week, from 7:00 a.m. to midnight. The work day is broken into three periods: 7:00 a.m. to noon; 1:30 p.m. to 5:30 p.m., and from 7:00 p.m. to midnight, so the women are actually at the factory 17 hours a day. During rush orders they are required to work seven days a week.
Wages range from a low of 14 cents an hour to an average of 23 cents. At the average wage, a woman sewing Ann Taylor garments 84 hours a week would earn $19.42, or $1,009.84 a year. (700 yuan per month for an 84-hour work week; 8.32 yuan to $1.00 U.S.; 700Y x 12 hours = 8,400Y: 8400Y ÷ 52 weeks = 161.54Y per week; 161.54Y ÷ 8.32Y/$ = $19.42.) One highly skilled worker at the Kang Yi Fashion factory (who was not a sewer) earned $61.02 for a 96-hour work week, or 64 cents an hour. This was actually the highest wage our researchers found in China at any of the factories producing U.S. garments.
At times the women were paid two to three weeks late, at others, they would receive only partial payment, having to wait for the balance.
The women were housed in dormitories 6 to 10 to a room. They have to pay 240 yuan ($28.85) a month for food, and some pay an additional 50 to 70 yuan for rent ($6.00 to $8.41), which would take up to $8.60 a week out of their pay. After working an 84-hour week, you could be left with only $10.82. ($19.42—$8.60).
The workers do not have a union and never heard of any U.S. Corporate Codes of Conduct to protect human rights. They had never even heard of the concept before.
Iris Fashions (HK) Ltd.
No 427 Bagua Road
(Publicly-owned/Buyer through Hong Kong)
Three hundred and fifty workers, 90 percent of them young women migrants 18 to 25 years old work between 72 to 80 hours a week sewing pants, shirts, and skirts for Ralph Lauren, Ellen Tracy/Linda Allard.
The "regular" work week is 48 hours, eight hours a day six days a week. Overtime is obligatory, averaging between 24 and 32 hours a week. The 80 hour week consists of work shifts from 7 a.m. to 10:30 p.m., six days a week, working 13 and-a-half hours a day, while being at the factory 15 hours. If there are rush orders the workers are forced to work to midnight.
According to Women's
Wages range from a low of 23 cents an hour, to a high of 37 cents, with the average being 29 cents.
After 54 hours of work, the women are paid only a 6 cent-an-hour overtime premium on top of their normal piece rate, which is a violation of China's labor laws.
Working an 80 hour week, a woman sewing Ralph Lauren or Ellen Tracy garments, would earn $23.08, or 29 cents an hour.
One worker from the Iris Fashion factory told our researcher:
"My name is _______ I'm 20 years old. I begin work daily at 7 a.m. six days a week. We have one hour lunch and dinner breaks. On a normal day work ends around 9 p.m. If we are under pressure for a rush delivery, we work until midnight.
"Right now I average 80 hours per week, which makes it possible for me to earn $100 a month. I'm paid on a piece rate basis, 2 cents per collar. The factory divides up the work orders, with each worker making only one piece of the garment. We believe it is because the owners don't want us to become good at making the whole garment because they fear we'll either demand better wages or leave this place for a better job that will pay us more. I work hard in order to try to save enough money for the future. I would like to do something different that isn't so grueling, but right now this is all I have."
Working a 13-hour shift, this woman earned $3.85 for the entire day, while attaching 192 shirt collars, which means completing one shirt collar ever four minutes.
The workers are housed in dorms, six to a room. They have no union.
It was surprising to us that, when asked in a safe location whether or not they would like to be in a union, the women from this factory and many others invariably responded yes, but that they would lose their jobs if they tried to organize.
You Li Fashion Factory
Huang Shi Road
Shigang Village, Guangzhou
(Privately owned/Buyer J-F Corp)
One hundred and twenty women, 80 percent of whom are 20-to-30-year old migrants from rural communities, work on average between 83 and 93 hours a week sewing pants, skirts and shirts which carry the Esprit label. "Regular" hours at You Li are 63 hours a week (which is illegal given that the Chinese labor code stipulates a regular 40 hour work week) with an average of 20 to 30 hours of overtime required. The women work 7 days a week, unless there is a break in production orders, in which case they are not paid.
The 93 hour work week stretches seven days a week from 7:30 a.m. to midnight, broken into three periods: 7:30 a.m. to noon; 1:30 p.m. to 6 p.m.—or to midnight. This is more or less 13-and-a-half hours of work each day, while actually being at the factory 16 and-a-half hours. When there are rush orders the women are forced to work throughout the night, putting in a 24 hours shift.
One of the You Li workers sewing Esprit garments told us: "We rarely get a day off and when we do, it is a mixed blessing because we need the income." Wages range between a low of 13 cents an hour and a high of 30 cents. For the "regular" 63 hour work week, a woman sewing Esprit garments earned 300 yuan a month, or $36.06, which amounts to $8.32 a week, 13 cents an hour, and $432.70 a year. (300 yuan per month x 12 = 3,600Y ÷ 52 weeks = 69.23Y; 69.23Y ÷ 8.32 (y/$) = $8.32)
Thirteen cents an hour amounts to less than 2 percent of average U.S. apparel wages ($.13 ÷ $8.31 = .0156). The highest wage we saw at You Li was 1000 yuan per month ($120.19), $27.74 for a 93 hour work week, or 30 cents an hour, which is still less than four percent of U.S. wages ($.30 ÷ $8.31 = .0361).
Despite being forced to work excessive overtime hours, the workers are paid no overtime premium, even for work on weekends and holidays. The women are always paid piece rate, no matter how many hours they work, which is illegal.
You Li workers sewing Esprit garments receive no benefits at all; no health insurance, workman's comp, pension, nothing.
Nor are the workers given work contracts, which is also illegal. Without a work contract, the worker is stripped of her rights, leaving the factory free of all legal obligations.
The workers are housed in dorms, 6 to 8 to a room. Our researcher described the dorm as "dark, dirty, and foul smelling." Visitors are not allowed in the dorms. The women feel they are under constant surveillance, watched 24 hours a day, both at work and in the dorm.
The You Li workers were afraid. Even though the interviews were conducted away from the factory, the women were afraid to tell their real story, for fear that word would get back and they would be fired and sent back to their rural communities with nothing.
There was no union at You Li, nor had the women ever heard of any Esprit Corporate Code of Conduct.
Esprit, which is sold in 44 countries around the world, has $2.65 billion in annual sales.
The Esprit USA Company claims that they do not use the You Li Fashion factory, though their garments are sewn at other factories in China. Esprit USA says it is the Esprit Group (Esprit Asia / Europe) which uses the You Li factory.
Well then, who is Esprit?
The Esprit company was founded in 1968 by Susie and Doug Tompkins. From the beginning, Esprit de Corp promoted itself as a highly responsible company, both environmentally and socially. Indeed, the Esprit USA webpage defines the company's name—Esprit de Corp—as "a French phrase much used by English writers to denote a common spirit pervading the members of a body of persons and inspiring enthusiasm, devotion and strong regard for the honor of the group." According to press reports, Esprit founder Susie Tompkins "had a vision of turning Esprit into a vehicle for social responsibility." Even today, Esprit USA's webpage reads: "Esprit dedicates an in-house design and research team to work on more environmentally and socially responsible ways of manufacturing apparel." Esprit's was to be a "humanistic approach."
Unfortunately, however, none of these nice humanistic sentiments or spirit of camaraderie applied to the workers sewing Esprit garments. In February 1976, press reports revealed that immigrant workers sewing Esprit garments at the Great Chinese American Sewing Company in San Francisco were being paid just $2.00 an hour—well below the minimum wage. Then in the face of an organizing effort by workers to improve these dismal working conditions, Esprit—rather than allow a union—simply closed the factory down.
According to press accounts, "In 1971, after labor problems in San Francisco, Esprit started its production overseas." At that time, Esprit established one of the "earliest East-West joint ventures to combine American designer skills and cheap Chinese labor and raw materials to produce clothing for export." Earlier than most, "Susie and Doug Tompkins saw the virtue of sourcing from the Far East where costs are much lower than in North America."
By 1996, 95 percent of Esprit apparel was being made offshore, the great majority of it in Asia. Esprit also sourced 85 percent of its fabric, buttons, zippers, even its labels, offshore, primarily in Asia.
Press reports noted that, "Esprit has had trailblazing experiences with factories in places with inexpensive labor. The company had buying offices in New Delhi and Sri Lanka""
The corporate humanism that was so pronounced in Esprit's promotions and advertising was altogether absent when it came to respecting the worker and human rights of the people sewing their garments, and paying them a living wage.
Esprit USA's webpage reads: "Esprit de Corp. Located at the base of Potrero Hill in San Francisco, Esprit designs women's clothes, shoes and accessories. From our start in 1968, we now serve 44 countries around the world through Esprit stores, better known department stores and now, in the U.S., mail order."
But this is misleading. It appears that in December 1996, amidst intra-company lawsuits among investors and debt restructuring, Esprit was broken into two, three, or more companies. Esprit USA sold off its interest in Esprit worldwide companies to Michael Ying, then Esprit's Asia Director, who combined Esprit Asia and Europe into the Esprit Group. According to Women's Wear Daily, Esprit USA had $350 million in sales in 1997, while the Esprit Group had approximately $2.3 billion.
It is still more confusing, in that the larger Esprit Group remains a minority owner of Esprit USA. At one point, Michael Ying owned 33 percent of Esprit's U.S. operation.
An Esprit USA press release quotes Esprit USA's Chairman and CEO, Jay Margolis, stating:
"Esprit is an incredibly strong company on a global basis. We will continue to communicate ideas with Esprit's design studio in Europe and Asia in order to achieve continuity in global product and brand image. We will look to integrate other areas of our business internationally where there is the right strategic fit. Ultimately, we are looking forward to operating as one company under the worldwide Esprit brand name."
Esprit USA continues the larger Esprit's practice of producing approximately 95 percent on its garments offshore in low-wage, unregulated sites, such as China, Guatemala, Indonesia, Sri Lanka, India, the Philippines, etc.
Shanghai Jiang District Silk Fashions Ltd. Factory
161 Channan Road
(Privately owned/U.S. buyers)
One thousand workers, 90 percent young women, work between 60 and 70 hours a week sewing garments for Liz Claiborne and Maggy London.
The regular work week is 40 hours, with an average of 20 to 30 hours overtime, totaling between 60 and 70 hours worked a week. This would be 11-1/2 hour shifts, six days a week.
Windfall Savings and Profit:
The average apparel wage in the U.S. ($8.31 an hour) is 30 times higher than what Liz Claiborne is paying in China.
A woman earning 28 cents an hour in China and working 11.66 hours a day would earn just $3.27 for the entire day. There are 1,000 workers in this Shanghai factory, so the total daily payroll would be $3,270.00. On the other hand, the average apparel worker in the U.S. earning $8.31 an hour would earn $96.89 for an 11.66 hour day. With a 1,000 person workplace, this daily payroll would total $96,894. Leaving aside all benefits and taxes, Liz Claiborne saves $93,624 a day just on wage alone by relocating production to China.
The average wage is 28 cents an hour. A woman working 70 hours would earn $19.42 for the entire week, $84.13 a month, and $1,009.62 for the year.
The workers live at home and receive medium benefits and workers compensation.
Liz Claiborne/Bugle Boy—Shanghai Shirt 2d Factory:
Shanghai Shirt 2d Factory
(Privately owned/U.S. buyers)
Two hundred workers are obligated to work a standard 66 hour week sewing shirts for Liz Claiborne and Bugle Boy. "Regular" time is 48 hours a work (40 hours is the legal limit for regular hours) with an obligatory 18 hours overtime per week. In the factory work area a large black board announced the following message:
"From April 2 everyone must work overtime to 8:00 p.m.
No absence allowed. Those who do not stay will be fined."
The work day stretches from 8:00 a.m. to 8:00 p.m. , with an hour off for lunch.
Wage rates vary between 25 and 30 cents an hour. Some workers working the 66-hour weeks report earning 700 yuan per month ($84.13), which comes to $19.42 per week, or 30 cents an hour. Other workers report earning only 600 yuan per month ($72.12), which would come to $16.64 per week, or $ .25 an hour. (700 yuan x 12 mo. = 8,400 yuan; 8,400Y ÷ 52 weeks = 161.54Y; 161.54Y ÷ 8.32 = $19.42; $19.42 ÷ 66 hours = 30¢/hour. Or, 600 yuan x 12 = 7,200/year; 7,200Y ÷ 52 = 138.46Y; 138.46Y ÷ 8.32 = $16.64; $16.64 ÷ 66 hours = 25¢/hour.)
Could Liz Claiborne—and other giant multinationals—afford to pay a living wage?
Liz Claiborne, with sales of $2.4 billion in the last year, is the 11th most recognized apparel label in the United States. In 1996, Liz Claiborne's profit was $155.7 million.
And Liz Claiborne's profits are soaring. In the first nine months of 1997, Liz Claiborne's profits were up 18.6 percent, posting a $84.6 million profit on $2.4 billion in sales. Their gross margins were up 41.3 percent in the third quarter, prompting Women's Wear Daily to write: "Liz Claiborne Inc.'s third-quarter earnings soared past Wall Street estimates, with more of the same expected in the fourth quarter." (October 23, 1997).
Liz Claiborne, which co-chairs the White House Task Force to Eliminate Sweatshop Abuses, was recently the focus of a campaign by members of Working Assets, who sent the Liz Claiborne company somewhere between 60,000 and 120,000 letters urging Liz Claiborne and other multinationals to pay a living wage around the world. The Working Assets letter pointed out that, caught in the desperate competition to attract foreign investment, developing countries often set the legal minimum wage well below subsistence levels. A living wage, on the other hand, would be set to actually meet the cost of basic survival needs—like food, shelter, clothing—in each society. In Haiti, for example, where the 28 cents an hour minimum wage is set below subsistence levels, the Haitian workers sewing garments for U.S. companies like Walt Disney say that they could climb out of misery and into poverty with a 60 cent-an-hour wage. In Nicaragua, where U.S. companies like Wal-Mart pay a minimum wage of 23 cents an hour, the workers say they could survive (not even dreaming of a middle class living standard, but basic survival) on 80 or 90 cents an hour.
Surely the multinationals can afford this!
The need to set living wages is especially urgent now, given that the crisis in Asia is already driving wages down in developing countries around the world. In Indonesia, which has seen its currency lose 70 percent of its value, minimum wages that U.S. companies pay have dropped to around 9 cents an hour. According to the New York Times, The Limited is a "winner," "enjoying a bonanza" because "making stylish blouses, sports clothes and underwear in Asia is suddenly less costly, which means a windfall profit for the lucky retailer"Weaker Asian currencies make whatever is produced in the region less expensive in dollars. And rising unemployment in Indonesia, Sri Lanka and the Philippines holds down the wages of those who make The Limited's clothing there."
Nor does it end there. There is a spill-over effect to other developing countries outside of Asia. This was confirmed by The Limited's vice-president in charge of manufacturing, Martin Trust, who explained, "Even outside Asia, where currencies have not devalued, our suppliers are sensing the competitive pressures from Asia and they are holding back on what they charge us." Mr. Trusts went on to say that this is the case in Mexico, where The Limited produces a lot of the clothing it sells in the U.S. and Canada (New York Times, 1/30/98).
In the latest twelve-month period (October 1996 to October 1997), The Limited had $8.9 billion in sales, and its 1996 profit was over $434 million.
The Limited could easily afford to pay a living wage, but without public pressure, The Limited may even use the economic turmoil in Asia to push wages down even further below subsistence levels.
The workers have no union. All the workers are local and live at home.
As is typical, except in the privately-owned sweatshops booming in the south of China, these Shanghai workers do receive medical benefits and workers' compensation.
Tianjin Yuhua garment Industrial Company
217 Hebei Road
Eight hundred local workers spend 60 hours a week sewing shirts for Wal-Mart, earning a low of 23-cent-an-hour wages, but with the norm being average wages between 37 and 55 cents an hour. Some workers earned 500 yuan per month ($60.10) for a 60 hour week, or $13.87 a week and 23 cents an hour; while others earned up to a high of 800 yuan per month ($96.15) for only a 40 hour week, or $22.19 a week and 55 cents an hour. However, the average would be more on the 37-cent- an-hour range.
These workers receive medical and retirement benefits, as well as workers' compensation.
Wal-Mart lowering standards in China:
It would seem incredible that a giant retailer like Wal-Mart, the largest in the world, with over $113.4 billion in sales over the last year and $3.3 billion in profits, would be fleeing 37-cent-an-hour wages and a few benefits, but that is exactly what Wal-Mart is doing as it relocates its work to even lower wage unregulated sweatshops in the south of China. The TianjinYuhua garment factory, which in the past did a lot of work for Wal-Mart, is now steadily losing Wal-Mart's orders to South China factories. In fact, the Tianjin Yuhua plant is the last factory in Tianjin holding Wal-Mart orders. All the rest of the work has already been pulled out.In its search for even lower wages, no benefits, no regulations, excessive forced overtime hours seven days a week, and lower taxes, Wal-Mart is actually lowering standards in China, as it moves its work to privately-owned sweatshops which are booming in China's southern coastal provinces.This directly contradicts Wal-Mart's and other U.S. companies' claim that their presence in China would increase standards of living, improve working conditions, while building respect for human and worker rights. In reality, nothing could be further from the truth.
Zhong Mei Garment Factory
Nan Xin Zhuang Road
(privately owned/U.S. buyer)
Three hundred local workers, women ranging from 18 to 30 years old, sew J.C. Penney shirts for up to 78 hours a week, earning a low of 18 cents an hour. The average wage appears to be 20 cents an hour, while 35 cents an hour was the highest wage a sewer could earn.
A woman working 11-and-a-half hour shifts, six days a week, would earn 500 yuan per month ($60.10) for a 68 hour week, or $13.87 for the week, and 20 cents an hour.
The workers receive no benefits whatsoever and do not have a union. The workers our researchers had spoken with had never heard of any J.C. Penney Corporate Code of Conduct, and were totally unaware of any human rights monitoring efforts.
J.C. Penney made $565 million in profit in 1996.
Tianjin Beifang Garment General Factory
(privately owned/U.S. Buyer)
Four hundred local workers work 60 hours a week sewing shirts for Sears, earning an average of 28 cents an hour.
The regular work week is 40 hours with an additional 20-hour overtime on average each week. For ten hour shifts six days a week, these workers earn 600 yuan per month ($72.12), or $16.64 per week, and 28 cents per hour. (600 yuan per month x 12 = 7,200; 7200Y ÷ 52 weeks = 138.46Y; 8.32 yuan=$1.00; 138.46Y ÷ 8.32Y= $16.64; $16.64 ÷ 60 hours = 28¢.)
These Tianjin workers are paid all benefits.
Sears' profit in 1996 was $1.3 billion.
AoDa Garment Factory
Yunhuichengcongquiao Industrial Area
(privately owned/US buyers)
Two hundred workers, the vast majority young women 18 to 25 years old, 60 percent of whom are migrants from rural communities, work 70 hours a week sewing silk shirts for Structure and other labels.
Regular time is 40 hours a week, with an additional 20 to 30 hours a week overtime being the norm. For a 70 hour work week, the women earn between $22.19 and $33.28 for the week, or between 32 and 48 cents an hour. The workers do receive medical benefits and worker compensation.
There is no union. Sixty percent of the workers live in dorms, six to a room, and they must buy their own food.
Giant U.S. Retailers Support U.S./IMF $100 Billion Bailout
Chunmei Garments Factory
(Privately Owned/U.S. Buyer)
One-hundred-and-fifty migrant workers, women 18 to 20 years old, work between 60 and 64 hours a week sewing shirts and pants for Casual Corner.
Regular time is 40 hours a week, with on average of 20 to 24 hours overtime required. A 64-hour week is broken into 10-and-a-half hour shifts, six days a week.
Wages range from a low of 18 cents an hour to an average of 22 cents an hour. A woman working a 6-day-64-hour week would earn 500 yuan ($60.10) per month, $13.86 for the week, and 22 cents an hour. (500 yuan per month X 12 months = 6,000Y ÷ 52 weeks = 115.38Y ÷ 8.32 yuan to one dollar = $13.86 ÷ 64 hours = 22 cents)
When there are no orders and no work, the workers receive no pay.
There is no union at Chunmei Garments, and the workers never heard of any U.S. Corporate Code of Conduct to protect human rights.
But again, unlike in the newer factories in the coastal provinces, these workers do receive medical benefits and workers' compensation.
China's Military Exports
Jun Mei Fashion Co. Ltd.
HeDongNan No. 1 District of Chaohui
(Joint Venture Public/Privately Owned/U.S. Buyer)
Two-hundred women, 18 to 25 year old rural migrants, work on average between 60 and 70 hours a week sewing garments for T.J. Maxx. In the past Jun Mei also produced for J.C. Penney and Sears. Regular hours are 40 hours a week, with an additional 20 to 30 hours of overtime.
Wages range from a low of 16 cents an hour, to an average of 24 cents. A typical worker earned 600 yuan ($72.12) per month for working 70 hour weeks, which comes to $16.64 per week, or 24 cents per hour. (600 yuan per month X 12 = 7,200Y ÷ 52 = 138.46Y ÷ 8.32 yuan to one dollar = $16.64 ÷ 70 hours = 24¢.)
The workers are housed in a dorm eight to a room, and must pay for food. There is no union. However, unlike most of the privately owned factories in the Southern Coastal provinces, the JunMei workers do receive workers' compensation and medical benefits. They also have legal work contracts.
Kmart—Shanghai No. 4 Shirt Factory:
Shanghai No. 4 Shirt Factory
300 Yanchang Road
One hundred workers work up to 70 hours a week sewing shirts for Kmart. They have also produced garments for Fenalli and Repp. Regular time is 40 hours per week, with overtime up to an additional 30 hours. Wages vary between 28 cents and 32 cents an hour.
For a 70 hour week, the women earned between 700 and 800 yuan ($84.13 and $96.15) per month, which comes to between $19.42 and $22.19 per week, or 28 cents to 32 cents per hour. (700 yuan per month x 12 months = 9,600Y ÷ 52 weeks = 184.62Y ÷ 8.32Y per $1.00 = $22.19 ÷ 70 hours = 32¢)
As is the case in the majority of the publicly-owned factories in mid-to-north China, the Shanghai workers receive full benefits, medical, life insurance and workers' compensation. If workers are required to work extra long overtime shifts, they can take time off when the rush order is completed.
All the workers are local and live at home.
Meiming Garment Factory
(privately-owned/buyer through Hong Kong)
Three hundred migrant workers work 60 to 70 hours a week sewing Cherokee Jeans. The workers are forced to pay an 80 yuan deposit ($9.62) in order to get their jobs, which is illegal.
Racing to the bottom/ U.S. companies
For a 70-hour work week, the Meiming workers earn $16.64, or 24 cents an hour. (600 yuan per month x 12 months = 7,200Y ÷ 52 weeks = 138.46Y ÷ 8.32 per $1.00 = $16.64 ÷ 70 hours = 24¢.)
The workers receive no benefits whatsoever.
They have no union, and never heard of any Corporate Code of Conduct or human rights monitoring.
The women are housed in dorms, eight to a room.
Cherokee, with $8.7 million in sales in 1996, is the 48th most recognized brand label apparel in the U.S. The company is based in Van Nuys, California
Embroidering for U.S. Companies— Mei Yi Embroidery Factory:
Mei Yi Embroidery Factory
21 Kaiyuan Li
One hundred local women work 70 hours a week doing embroidery work for various U.S. companies, earning 28 cents an hour. As the women do not handle the final garment they are unaware of which particular labels they are sewing.
"Regular" time is 70 hours a week (China's labor law stipulates a regular 40 hour work week), nearly 12 hour shifts six days a week. There are no benefits paid, and the wage is 28 cents an hour. For a 70 hour week a woman earns 700 yuan per month ($84.13), or $19.42 a week, and 28 cents an hour. (700 yuan x 12 = 8,400Y ÷ 52 weeks = 161.54Y ÷ 8.32 yuan to the dollar = $19.42 ÷ 70 hours = 28¢.)
The workers do not have a union.
Embroidering for U.S. companies—Tianjin Mei Hua Computer Embroidery Garment Co.
Tianjin Mei Hua Computer Embroidery Garment Co., Ltd.
No. 2 Jieyuanxidao Road
(privately owned/U.S. buyers)
This factory does embroidery work for various U.S. companies, but does not handle the final garment, and therefore does not see the label. One hundred local women work on average between 68 and 78 hours a week. "Regular" time is 48 hours, with the norm being an additional 20 to 30 hours overtime each week. Pay ranges between 28 and 33 cents an hour, and the workers do receive all benefits, including medical, retirement and worker compensation.
A woman sewing embroidery for a U.S. company 78 hours a week would earn 800 yuan per month ($96.15), or $22.19 a week for her 11 hour shifts seven days a week. This amounts to 28 cents an hour.
There is no union in this factory.
Working for various U.S. companies—Hua Yong Garment Factory:
Hua Yong Garment Factory
427 Bagua Road
Bagualing, Shenzhen, Guangzhou
(privately owned/buyer through Hong Kong)
One hundred and fifty young women, 18 to 24 year old migrants from the countryside, work from 78 to 96 hours a week sewing clothing for export to the U.S. The particular labels are only delivered from Hong Kong at the end of production, and had not arrived yet when our researcher visited the plant.
The "regular" work week is 60 hours, with average overtime ranging from 18 to 36 hours. During rush periods, workers will be forced to work 24 hours straight right through the night. Failure to work overtime is punished with a fine, which is illegal.
Hua Yong workers told us: "During the hurry orders, we have to work 24 hours straight. Some workers almost fall asleep on top of their sewing machines."
During rush periods the workers are required to work 14 hour shifts seven days a week, broken into three periods: 7 a.m. to noon; 1:30 p.m. to 5:30 p.m.; and then from 7 p.m. to midnight.
Pay ranges from 18 cents to 20 cents an hour. For a 78 hour week, working over 11 hours, seven days straight, a worker is paid 500 yuan per month ($60.10), $13.87 per week, or 18 cents an hour. This comes to wages of $721.15 per year.
The workers receive no benefits at all.
Our researchers spoke to 15 young teenaged women form Jiangsu province who had to pay 50 yuan, or $6.00, to get their jobs. It is illegal to force workers to pay a fee to secure their jobs.
The women are housed 8 to 10 to a dorm room. They must pay $6.00 a month for rent and some part of their food, water, and electricity bills.
The Hua Yong workers have no union, and as was the norm, had never heard of any U.S. company's so-called Corporate Codes of Conduct.
The workers are not given their legally-mandated work contracts, leaving them totally vulnerable, stripped of their legal rights.
Various U.S. Labels (not identified)— Shenzhen Yang Fu Garment Factory:
Shenzhen Yang Fu Garment Factory
No. 1 Bagua Road
Bagualing Industrial Area
(Joint public-private venture/Hong Kong buyer)
One thousand local workers sew shirts for 68 hours a week, earning 49 cents an hour, and with just limited medical benefits. The workers could not identify which labels they were producing (no one had ever asked them before).
Working 68 hours a week a woman would earn 1,200 yuan per month ($144.23), or $33.28 a week, which came to 49 cents an hour.
The workers had never heard of any U.S. Corporate Code of Conduct. The women did report that there were children employed as sewers in smaller shops in the area which specialized in detailed handiwork on short runs of clothing.
We are sure that the U.S. companies sourcing production in these factories will remain reluctant to come forward to identify themselves, which is one more reason we need corporate disclosure.
Milano label—Xin Fu Group garment factory:
Xin Fu Group Garment manufacturing Corporation
Tian Liao Industrial Area
Gong Ming County
(publicly-owned/Hong Kong buyer)
Two thousand workers, 40 percent of them rural migrants housed in dorms, work between 70 and 82 hours a week sewing shirts and cotton blouses for the Milano label.
"Regular" time is 70 hours a week (which is illegal), with an additional 12 hours a week overtime being the norm. During the 82 hour week, the workers put in nearly 12 hour shifts seven days a week. Wages vary between 34 and 40 cents an hour.
Working these 12 hour shifts every day of the week, a women would earn 1,000 yuan per month ($120.19), or $27.74 for the week, and 34 cents an hour.
The workers do receive medical benefits and worker compensation. The migrant workers are housed in a dorm four to a room, and must pay for their own food. There is no union.
Minimum Wage Rates Set Shockingly Low:
Legal minimum wage rates in China vary as they are set by each provincial government. The following are some examples:
American companies actually lowering working and living conditions and human rights standards in a developing country as poor as China? It does not sound possible. Yet that is exactly what is happening, as American companies shift their production from larger publicly-owned factories in the north of China, to booming foreign privately-owned sweatshops in the south. Work is being removed from factories in northern provinces such as Tianjin, and relocated hundreds of miles south to Jiangsu and Zhejiang provinces near the port of Shanghai, and to Guangdong province right above Hong Kong.
In the north, in the publicly-owned factories, wages may average 50 cents an hour, while in the foreign, privately-owned factories in the south, wages are as low as 13 cents an hour. In the larger northern factories workers must receive health and social security benefits, worker compensation, pension insurance, child care, sick days and continuing education. In the new privately-owned factories in the south the workers receive little or no benefits. In the state-owned enterprises in the north, excessive overtime is prohibited, while in the south work shifts of 12 to 14 to 16 hours a day, seven days a week, are not uncommon. In the north the overtime rate is paid, in the south it is not. In the north part-time work is prohibited, as is subcontracting. It is the opposite in the privately-owned factories in the south, which are tied into a vast subcontracting network, and where the majority of workers are hired on a contingency basis. When there is work, you get paid, and when there is no work you do not get paid. In the south, the housing for migrant workers is poorer, as is the food, and there is less concern for health and safety protections. In the north the factories are regulated, in the southern provinces along the coast above Hong Kong they are unregulated. Depending on local incentives, taxes in the south are also lower.
It is interesting to note that a recent World Bank study concluded that sophisticated methods of quality control were being introduced to southern China in order to modernize the industrial sector. If the com- panies can do this, then why are worker rights always left behind?
World Bank Economic Review,
With little red tape or regulations in the way, foreign factory managers in the south often deny employees their legal work contracts, and nothing stands in the way of widespread arbitrary firings. As the majority of workers are young women from the countryside, with little formal education, often unaware of their legal rights, and who have never heard of U.S. Corporate Codes of Conduct, they are more easily intimated.
Where do you think the U.S. companies are headed? They are going south. Wal-Mart, for example, is now in the process of pulling its last production orders out of Tianjin in the north and relocating its work to the lower-wage, unregulated factories in the south. Sears is doing the same.
The American companies will probably respond in the abstract, that this is how the free market operates, and that they have to seek out lower costs and greater flexibility to be able to meet their customers changing demands. What they will not explain, in the concrete, is how they are doing this in China through slashing wages and benefits, undermining social safety nets, subcontracting, excessive overtime and the systematic denial of fundamental worker and human rights.
This means that today there are far more garments entering the U.S. which were manufactured in China under unregulated sweatshop conditions with sub-subsistence wages and excessive forced overtime.
Earlier studies by two highly respected NGOs based in Hong Kong—the Asia Monitor Resource Center (AMRC) and the Hong Kong Christian Industrial Committee—confirm a longstanding systematic pattern of widespread worker rights abuses by U.S. contractors in China. A 1996 investigation of garment factories in China by the AMRC found a pattern of:
Excessively long hours, with work weeks averaging 69 hours, but often stretching during rush periods to over 100 hours;
7:00 a.m. to 12:00 midnight work shifts, seven days a week;
Forced overtime, while not being paid legal overtime premium;
Few workers were given their legally mandated employment contracts, thereby stripping workers of their rights to any social welfare benefits;
Health and safety violations were neglected;
Workers were subject to illegal fines as punishment; and,
Any form of protest or raising grievances resulted in widespread firings, under which conditions workers learn to keep quiet in order to keep their jobs.
Fashion Garment Factory
The Fashion Garment Factory (Wei Yuen Tao, Humen Zhen, Dongguan) produces clothing for export to the U.S., Canada and Europe. Ninety-five percent of the workers are young migrants from the countryside, and 60% are women. The 150 workers are obligated to work 80 to 84 hours a week, an 11-1/2 to 12 hour shift, seven days a week. They get every other Sunday off. The work day is broken into three shifts: 7:30 a.m. to 11:30 a.m.; 1:00 p.m. to 5:30 p.m.; and 6:30 p.m. to 9:30 or 10:00 p.m. The women get paid 26 cents an hour, or $22.18 for an eighty-four-hour week. (800 RMB per month at 8.32 RMB per $1.00 = $96.15 per month x 12 months = $1,154 for the year ÷ 52 weeks = $22.19 per week ÷ 84 hours = 26¢.)
The women are not given legal work contracts. They are fined two hours pay if they arrive 10 minutes late to their sewing machine. If they miss three days of work, they are fired, or rather, it is written down as a "resignation." The workers are housed in a small dorm, sharing three double beds per room. The dorm canteen was filthy. The workers are charged a fee of 60 RMB ($7.21) per month for their food.
There is no union.
Tung Tat Garment
Another factory investigated by the Asia Monitor Resource Center was the Tung Tat Garment Factory in Shilong, Dongguan, which produced for ADIDAS. Here the norm was to work 12 hour shifts, six or seven days a week, putting in between 75 and 87 hours of work. Sometimes the workers would be forced to stay sewing throughout the entire night, working 24 hours straight. Overtime was obligatory, while the legal overtime rate was not paid. The work day was broken into three shifts: 7:30 a.m. to 11:30 a.m.; 1:30 p.m. to 5:30 p.m.; and from 6:30 p.m. to 11:00 p.m. The workers earned between 22 cents and 26 cents an hour. For working more than 12 hours a day, seven days a week, a worker could earn as little as $19.42 for the entire week.
Adidas, the 23rd most
A sign in the factory informed the workers that they would be fined if they were late, found resting or taking too many breaks, and for talking. Workers also had to join morning calisthenics—if they did not, they were fined.
The workers were housed in dorms, eight to a room, and the kitchen area was filthy. The workers also had to pay an 80 RMB ($9.26) fee per month toward their food costs (which may not seem like much, unless you make only 22 cents an hour and must work 44 hours just to make $9.62).
Just to get the job, the workers had to pay 68 RMB ($8.17) to obtain a temporary residence permit, and the factory illegally retained the workers' first three months' wages.
"Conditions of Workers in the Garment Industry in China"
Asia Monitor Resource Center (Hong Kong)
Sudwind Institute of Economics and Ecumenism (Germany)/March 1997
Worker Rights Denied:
Anyone who shopped for toys this last holiday season knows that most toys are made offshore. In fact, nearly 80 percent of the toys we purchase each year in the United States are imports, and 63 percent are from China. The American people spend $20.7 billion a year on toys, with more than half of these purchases made during the holiday season.
Consider the Sewco Factory in Zhongshan, which produces toys for export to the U.S., only one of more than 2,000 Hong Kong-owned toy factories in Guangdong province alone.
Here the workday is 13-hour shifts, seven days a week. There are no weekends off and very few holidays. This adds up to a 92-hour work week. The work day is broken into three periods: 7:45 a.m—11:30 a.m.; 1:30 p.m.—5:30 p.m.; and 6:45 p.m.—11:45 p.m. However, it was not uncommon to be forced to work until 2:00 or 4:00 a.m., putting in a 20 hour shift. No overtime rate was paid. The workers earn 19 cents an hour, $2.47 for a 13-hour day!
Despite the fact that the workers handled toxic spray paints, solvents, glues, dyes and plastics, there was inadequate ventilation in the factory, and the workers were given no protective equipment. People in the spray painting department suffer frequent illnesses, especially influenza—a flu which will not go away.
In 1996 the United States imported over $8 billion worth of toys, games, sporting goods and baby carriages made in China. At retail, these goods would sell for $18.4 billion.
"Labour Rights Report on Hong Kong Invested Toy Factories in China" No. 2
Asia Monitor Resource Center
Coalition for the Charter on the Safe Production of Toys, April 1997
Migrant worker at Apollo Toy Factory. Wages at Apollo are as low as 12 cents an hour, 96 cents a day, $6.73 a week.
Life in a Toy Factory
Chen Yuying was just fifteen years old when she went to work in the Zhili Toy Factory, in 1990, hand sewing stuffed animals. She said she entered the factory as a "happy-go-lucky and fashionable teenager," glad to have found work so she could help pay for her brother's education back home in their rural village. Just three years later she left the factory crying, disabled and in misery.
Chen Yuying worked in the Zhili Toy Factory in Kwai Yong, Shenzhen. She and her co-workers were forced to work 12 hour shifts seven days a week, earning just 7 cents an hour. For an 84-hour work week she earned a total of $5.55. It was like working in a cage, the exit doors were bolted and the windows barred. The company often confiscated the young workers' identification cards, so they could not leave to look for better work. Most of the time they were owed back-wages as well.
Then in November 1993, the factory caught fire, 87 workers were killed and 46 badly burned. They had been locked in the factory and could not escape.
Chen Yuying was badly burned over 60 percent of her body, left with massive scars covering her left ear and arm, her back, breasts, waist, hips and legs. She was left with only two fingers on her left hand. She lost all her toes on her left foot. The tissue scars under her arms were so bad she could not lift her arms. She suffers constant bouts of inflammation and bleeding, always with the recurring pain. It was two years before she could even get out of bed. She easily overheats now, as her cilia cannot perspire, and she becomes dizzy.
Chen Yuying was sent home with only a $12 a month pension, to take care of herself and try to survive. No one can live on $12 a month.
Chen Yuying is 22 years old now. She cannot find work. She would like to get married, but she is afraid no man would take her. If she was lucky enough to ever have a family, she worries she would only be a burden on them.
"What can I do" she asks, "when is the end of my suffering?"
The Asian Network for the Rights of Occupational Accident Victims
Canada's International Center for Human Rights and Democratic Development
Wellco, a Korean-owned factory in Changian City, Dongguan, employs 8,000 workers—70 percent of them young women 20 to 25 years old—making Nike athletic shoes.
Nike officials say that Wellco is a "model" contractor, that the plant has a "stellar safety record," and that Nike's Code of Conduct has been translated in Chinese and distributed to all the workers.
Yet, when human rights researchers from the Hong Kong Christian Industrial Committee and the Asia Monitor Resource Center met with these Nike workers in mid-1997, they learned quite a different story.
The Canadian International
Wellco ran its production lines on 11-to-12-hour a day shifts, seven days a week. If you did not stay for the overtime you would be fined up to two days' wages. The workers were given two days off a month, every other Sunday.
For working between 77 and 84 hours a week, the women were paid a base wage as low as 16 cents an hour, though the average wage was approximately 19 cents an hour. No overtime rate was paid. In fact, quite the opposite, if you were unable to reach the very high piece rate quota assigned for the day, you would be required to stay for "prolonged work" until you finished, without pay.
Most of the workers had not been provided legal work contracts, and their first month's wages were illegally detained as a security deposit. As another form of intimidation, management sometimes confiscated the identity cards of workers, leaving them vulnerable for deportation back to their rural provinces. Workers reported that they were yelled and cursed at, and there were even some cases of corporal punishment. There were cases in which pregnant women, or those "too old"—over 25 years of age—had been arbitrarily fired. There were fines for talking while at work.
Workers one sewing department in the factory estimated that just in that department ten children, 13 to 15 years old, worked on the Nike sneakers.
"As a result of the privatization of state enterprises, the welfare system and labor rights are
On two occasions in 1997 several workers were fired for raising grievances over being cheated on their wages or when they protested maltreatment.
The workers reported high noise, dust and fume levels. There were industrial accidents, broken fingers and one person was reported to have lost his arm. Another worker died from inhaling chemical fumes.
The workers were housed in a dorm, 16 to a room.
Most workers had never heard of the Nike Code of Conduct. Before any visit by Nike representatives, the workers were alerted, the factory cleaned, and if Nike representatives were to interview workers, it was always done in the presence of factory management.
A Simple Question for Nike: If the Nike company is really proud of the Wellco factory, and feels strongly that the Nike Code of Conduct should be understood and adhered to, then why not invite respected independent human rights organizations—like the Hong Kong Christian Industrial Committee and the Asia Monitor Resource Center —to enter the factory so they can help explain to these young women, migrants from rural areas, what the Nike Code of Conduct actually means, and what their rights are under Chinese laws.
Yue Yuen Factory
Imagine a factory where 50,000 to 60,000 young women, 18 to 22 years old, work six or seven days a week, 10 to 12 hours a day, earning just 19 cents an hour. To put this in perspective, there are only 37,000 footwear production workers left in the entire United States.
This is the Yue Yuen factory in Dongguan (part of a Taiwanese-owned conglomerate employing 140,000 workers in China sewing sneakers for export to the U.S.) where Nike and Adidas athletic shoes are made.
Here, depending upon rush orders, the work week varies between 60 and 84 hours. For a 60-hour week, a worker earns $11.12, or 19 cents an hour.
Overtime is compulsory, and no overtime premium is paid.
No worker who was interviewed had ever heard of the Nike Corporate Code of Conduct.
Workers complained of excessive noise, pollution and fumes in the factory, causing some workers to suffer skin irritations, dizziness and constant headaches. Some industrial accidents were reported. One worker reportedly lost an arm, another worker lost his fingers when they were caught in a machine.
There are mandatory calisthenics every day.
"Working Conditions in the Sports Shoe Industry in China"
Hong Kong Christian Industrial Committee
Asia Monitor Resource Center
The Black Season/16 Hours a Day/Seven Days a Week
In August 1997, reporters from the Guanzhou Evening Post went undercover, taking jobs at the Taiwanese-owned Yixin Shoe Factory.
They discovered that in May and June workers were forced to work 16 hours a day (and sometimes even longer, until 3:00 a.m.), seven days a week. They worked 110 hours a week, without a day off for months. This was, according to the workers, their "Black Season," when production was at its peak to stock shelves in the United States on time for the holiday season.
"In China, new studies by reseacher Anita Chan showed a system of bonded labor in some of the footwear manufacturing plants that have grown up in the country's booming coastal provinces, whereby migrant workers, recruited from inland provices, are required to pay their employer a deposit for a temporary work permit which is then deducted from wages. She also documented widespread physical abuse of workers, including the use of electric batons by private security guards with links to the Chinese police."
Human Rights Watch
The reporters found extreme physical abuse and humiliation of the workers by the management. One form of disciplinary punishment used in the factory was the "sun shower" when workers were ordered outside to stand in rows under the sun, some having to hold weights, or piles of shoe boxes, in their arms. Workers were forced to do push-ups, or to stand on their heads for an hour. Supervisors sometimes hit workers on the head with a shoe brush. Factory managers sometimes hung heavy iron molds around the necks of workers they believed had made too many mistakes, and made them run and jump around the area outside the factory. Especially humiliating was the discipline of "frog jumps," when plastic buckets filled with water were hung around the neck of a worker who was then forced to squat down and leap like a frog, splashing water all over themselves.
Over 90 percent of the shoes purchased by the American people each year are imports, 68 percent of which are made in China.
The Guanzhou reporters also found dangerous levels of exposure to benzene—a carcinogen—in the factory.
In the shoe industry across China producing sneakers for the United States, it is estimated that 30 percent of the workers, mostly young women, deal directly with and must handle poisonous and hazardous materials.
In 1996 the U.S. imported $6.04 billion worth of footwear from China, which would retail in the U.S. for $13.9 billion.
Hong Kong Christian Industrial Committee
Strict Worker Discipline/Reebok Big-Brother Style
The KTP factory in China, a jointly owned Hong Kong—Taiwanese venture, produces shoes under contract for Reebok. Strict company regulations, set out in more than 130 articles, govern worker behavior.
Failure to adhere to factory regulations, for example, talking while working, will be punished with a fine.
Reebok, the 10th most
Workers must participate in daily collective physical exercise.
No worker may leave the factory without permission between 7:30 a.m. and 7:00 p.m.
"Any worker who stays away from work without prior approval for three consecutive days, or for five days within a month, is regarded as having resigned. No compensation will be offered and the salary for that period will not be issued." Since the workers are paid on a monthly basis, this may mean losing an entire month's pay.
Workers are searched by security guards when entering and leaving the factory. Women workers may be body searched by male guards. Management reserves the right to enter the workers' dorm quarters at any time for an investigation.
Workers will be fired or handed over to the police if they "post or disseminate inciting publications which will destroy harmonious labor relations." The same will happen to workers who "gang together to destroy the harmony of the community."
Hong Kong Christian Industrial Committee
But China has a Union—a "company" union—the All-China Federation of Trade Unions.
Here's how it works:
At the 12th Congress of the All-China Federation of Trade Unions (ACFTU) in 1993, its chairman, Wei Jianxing, reported:
"The new historical challenges before us mean that the responsibility of trade unions is even greater and our tasks more formidable. Every trade union at every level must conscientiously study and comprehend the hope and demands laid before us by the Chinese Communist Party Central Committee leadership. We must fully accept the leadership of the party and strive to preserve our unity with it."
In December 1996, another All-China Federation of Trade Union officials was more to the point:
"We should strengthen trade unions to handle some critical issues and to help develop a legal foundation for overtime work and punishment of workers."
President Jiang Zemin has also warned:
"We should take precautions against the tendency of the trade union to become Poland's Solidarity Trade Union or another political entity. The trade union should follow the united leadership of the Party and the government in different levels."
Nike, with $9.1 billion in sales in 1996, controls 47 percent of the U.S. sneaker market. Nike spends $650 million a year worldwide in advertising. Nike reported a $796 million profit in 1996.
According to Women's Wear Daily:
"Despite critism of its labor practices overseas, Nike continues to dominate the $17.2 billion activewear field, with sport-specific apparel, footwear and equipment and a stable of professional athletes to promote them. This year, the company inked a two-year marketing agreement with the Women's National Basketball Association and sponsored the first intramual soccer competition for the national women's team. Endorsement deals with collegiate athletic programs and, to a lesser degree, high school programs, are a key element in Nike's promotion plan...Michael Jordan men's activewear will be intoduced at retail for the holiday..."
Women's Wear Daily
Nike was officially incoporated in 1968---making this its 30th year anniversary. Nike's founder and CEO, Philip Knight, is today worth $5.2 billion. In other words, Knight has been compensating himself to the tune of $173.3 million a year, or $474,886 every day of the year, which comes to $19,787 an hour, 24 hours a day.
By comparison, a young woman in China sewing Nike sneakers is paid 16 cents an hour, and is forced to work 12-hour shift, seven days a week. Sixteen cents an hour for a twelve-hour day totals $1.92, which for a seven-day week adds up to $13.44. If she works 12-hours shifts every single day of the year, without a holiday, she would earn $698.88 for the whole year.
Nike Justice:= The tens of thousands of young women in China would have to each work more than 28 years to earn what Philip Knight pays himself in one hour while he is asleep.
What can Philip Knight possibly do with $5.2 billion dollars? To get our hands around this we phoned a travel agent. We wanted to know how much it would cost to fly first class around the world each day, stay at the plush Waldorf Astoria Hotel on Park Avenue in New York, and eat three meals a day there (and we don't mean a continental breakfast), while also buying a brand new Lincoln Continental every week.
Phlip Knight has enough money to do this for the next 1,295 years!
Knight has enough money to stop riding on the backs of these young women and the starvation wages they are paid.
Who pays for Nike's
Worker Rights on Paper, While in Reality Repression—China's Catch-22
China's 1982 constitution guarantees the people of China the right to form unions, assuming the "freedom of association." The catch is, there is only one officially recognized union in China, the All-China Federation of Trade Unions (ACFTU), which according to the U.S. State Department, "is controlled by the Communist Party." Next, to establish a local union in China requires the approval of the government controlled ACFTU, which just happens—what a surprise—to never have approved the creation on any independent unions. So, while on paper the workers have the right to form unions, in reality, "Independent trade unions are illegal."
U.S. State Department
Report on China
A Challenge to Nike/Reebok/Adidas
"These multinationals claim that they highly respect workers' rights and have drafted their own codes of conduct. However, various reseach shows that it is not done. Their suppliers in China violate basic workers' rights and local labor laws and no evidence has shown that the situation is improved."
TOP U.S. APPAREL COMPANIES CONTRACTING PRODUCTION IN CHINA ESTIMATED 1996 CLOTHING IMPORTS BY POUND. (BASED ON AVAILABLE U.S COMMERCE DEPARTMENT DATA.)
China Imports, pounds
Estimated Annual Imports
Phillips Van Heusen
TOP U.S. APPAREL
PRODUCTION IN CHINA
Companies hide their production in China/The Public Record is very incomplete.
There is no way to place a dollar value on these companies' imports from China. In fact, we only know of three instances in which, either in the press or in corporate 10K filings, companies publicly revealed how much clothing they produced in China.
Patriotism-Fruits of the Loom Style
Fruit of the Loom is not a huge producer in China, although it is near the top 20 U.S. companies sourcing apparel production in China. Almost all of Fruit of the Loom's production is located offshore in Mexico, Central America and the Caribbean.
In fact, in just the last half of 1997 Fruit of the Loom laid off 7,700 workers, taking all the work offshore. In the last two years
Fruit of the Loom's next move was to announce that they are setting up a tax shelter-holding company in the Cayman Islands so they can escape many U.S. government taxes.
Fruit of the Loom issued its second brilliant statement: "Unlike the United States, which imposes corporate income taxes on the worldwide income of United States corporations, the Cayman Islands generally imposes no corporate income
Wall Street then rewarded Fruit of the Loom-style of patriotism, its ruthless commitment to the bottom line, before all else, by increasing the value of Fruit of the Loom's stocks.
According to the New York Times, in 1996, the Chairman of the Federated (Macy's and Bloomingdales) estimated the Company's 1995 imports of clothing made in China at between $150 and $200 million (wholesale), which would translate into about $529 million in actual retail sales (NYT, May 16, 1996. The American Apparel Manufacturers Association estimates wholesale import value as 33.8 percent of retail value.)
In that same New York Times article, The GAP reported that less than five percent of its goods were made in China. If this is still accurate, based on GAP's most recent sales figures (October 1996-October 1997) of over $6 billion, then the GAP imported some $300 million-worth of clothing from China in 1997.
One of The Limited's major suppliers is the Tarrant Company, whose 10K tax filing reveals total sales of $230 million, of which 67 percent—$154 million—went to The Limited. Since Tarrant sources 80 percent of its production in China, this means that in this one case, The Limited purchased (wholesale) $123.28 million-worth of goods made in China, which would retail for $365 million.
Right now there is no way for the American people to know which companies produce in China, what goods or labels they make, how much, in what factories, under what conditions, or what wages are paid.
The President of the United States could not find this information.
The companies say that their production in China is "proprietary information," which the public has no right to know. The U.S. Commerce Department does keep shipping records of all cargo entering U.S. ports, which in a limited way they have made available to the Journal of Commerce which in turn created an import/export database. If you have the money to pay for it, you can access these PIERS records tracking import shipments, for example which American apparel companies are importing how many pounds of clothing from China.
As they stand now, these records are extremely limited, for the U.S. parent companies use a staggering array of middlemen and shipping companies to import their offshore clothing, leaving no visible link to themselves in the documents. But, even this was too much potential public accountability for the companies, fearing that consumers and human rights advocates would use the data to track where and how much they produced around the world. So more and more U.S.-based multinational corporations producing offshore are now having their names totally removed from the import shipping records which are available to the public.
Rather than more public accountability, more openness in the global economy, the corporations are going in the opposite direction, where all offshore production goes on behind closed doors. We, the consumers, have no right to know.
That is why the National Labor Committee, the Center for Constitutional Rights (CCR) and the People of Faith Network, working with a coalition of religious, human rights, labor, consumer and student groups across the country will launch a national grassroots campaign: Corporate Disclosure/The Public's Right to Know. We have the right to know where the goods we purchase are made, in which factories, under what conditions and wages, and whether or not human rights are respected.
U.S. Commerce Department sponsors management/business volunteers to travel to China to assist manufacturers in improving their operations.
Why just business/What about human rights?
Why not set up awareness training sessions led by independent non-governmental human rights organizations so the workers can actually learn what their legal rights are, and what human and worker rights Corporate Codes of Conduct are meant to protect?
The White House Task Force/Independent monitoring: we've come a long way...but we've still got a long way to go
In the last few years we have come a long way. It was only in 1994, during the debate over extending Most Favored Nations (MFN) trade status to China despite massive human rights abuses, that the corporations ran the other way when approached by Human Rights Watch with the proposal that U.S. companies producing in China adopt a Corporate Code of Conduct.
The New York Times (May 24, 1994) noted the companies' position, which was "that embracing such codes of behavior would undermine their competitiveness and raise suspicions in the Chinese Government."
Moreover, said Robert A. Kapp, president of the United States-China Business Council: "The impetus of laying on the American business community a Corporate Code of Conduct simply gives credence to the idea that business is morally responsible for the human rights situation in China. We don't accept that."
At the same time, the soon-to-be chairman of the National Association of Manufacturers, J. Tracy O'Rourke, stated that companies pressured to adopt these codes of conduct for their factories in China "would find that very onerous." (Washington Post, April 24, 1994).
The Washington Post article went on to note that many U.S. executives believe "U.S. companies that help build a market economy in China do more for human rights than those who stand back and issue statements." According to Mark Hoffman, chairman of Sybase, a California software computer company, human rights in China "are coming very rapidly on the increase in free-market systems over there."
Back in reality, the New York Times (12/31/97) noted that in 1996, "inveighing against the spiritual pollution of China, the government used its control over the telecommunications system to block access to more than a hundred WEB sites, including those of many foreign newspapers, human rights and dissident groups..." It is now a crime in China to use the Internet to defame government agencies.
The fact that the White House Task Force even exists, and that there is now a popular call for independent monitoring of factories by respected local human rights and religious organizations, shows that the American people no longer believe that companies can be trusted to police themselves or to guarantee respect for fundamental human rights.
Get Out of the Way and Let the Free Market Work?
That is what the companies tell us—that the best allocator of resources is the marketplace and that foreign investment alone is the surest way to alleviate poverty in the developing world, and that naive human rights organizations should get out of the way to allow the free market to do its job, which will lead to improved human rights, development and democracy.
A few questions for the companies:
If the marketplace is the best allocator of resources, why did the U.S. taxpayers have to spend $150 billion to bail out the corrupt savings and loans debacle? Just what happened to the free market allocating resources when $43 billion was spent to bail out failing businesses in Mexico during the 1994 peso crisis? And, now the United States is helping direct an over-$100 billion bailout to Asia, which is being supported by the National Retail Federation and other offshore producers.
How is it that the marketplace does not work for giant retailers, banks, wealthy investors—but it does work for 17 year old young women working in factories in China producing goods for Wal-Mart and other U.S. companies? The companies tell us that human rights standards cannot be attached as conditions on trade and investment without upsetting and undermining the workings of the free market.
But what is free about teenaged women—migrants from rural areas in China who are unaware of their legal rights—being forced to work 96-hour work weeks for 14 cents an hour making goods for U.S. companies, and if they even discuss working conditions in their factories, they can be fired and deported back to the countryside with nothing? How does the free market operate in a sweatshop economy, where workers are stripped of their rights, and have never even heard of the U.S. companies they are ultimately working for, let alone what those companies' profits are. How does the free market operate under a regime of intimidation in China, where all independent human rights, religious and labor organizations are crushed and outlawed?
Further, if investment alone—not conditioned on human rights or the environment—leads to the alleviation of poverty, why in fact is it not happening? In 1997, $45 billion in foreign investment flowed into Latin America. The investment is there, yet in the last three decades, the average per capita income in Latin America has actually fallen to one-quarter of first world levels, from one-third in the 1970s. (United National Conference on Trade and Development, as quoted in the New York Times, 2/5/98) Also, the poverty level index has remained unchanged across all of Latin America—except in one country—since 1970.
The U. S. Government is helpless to defend human rights in China—or is it?
Is the U.S. Government helpless? Hardly. Consider this.
In December 1997, when 102 nations signed a financial accord under the auspices of the World Trade Organization, it was hailed as a great breakthrough for further market freedoms. Malaysia signed the WTO agreement, but refused to relinquish its right, should it choose to act on it, to force foreign companies to divest their majority stake in the countries insurance companies. So the United States shot back, not hesitating for a moment. According to the New York Times (12/14/97): "The United States insisted on wording in the agreement that allows it to revoke 'most favored nations' trading rights—a guarantee of low tariffs in the United States—if Malaysia actually moved against a foreign company."
One of New York Life Insurance's chairmen was invited to the White House to announce the new agreement, which he described as "very good."
Try to imagine another scenario. Religious, labor and human rights leaders invited to the White House to announce that if China does not move within the next two years to guarantee respect for internationally recognized worker and human rights, then China would be temporarily stripped of 'most favored nations' status until real progress had been initiated.
China receives about $1 billion a year in export credits from the U.S. Export-Import Bank. Right now the U.S. Senate is holding up legislation requiring the bank to give loan preference to U.S. companies that have at least adopted a Corporate Code of Conduct.
What Is Our Economy?: We Are.
If you think about it, consumer spending makes up more than 66 percent of our entire economy. In just the month of January 1998 alone, the American people spent $214.8 billion over the retail counter. Last year, when consumer spending in the U.S. rose 3.3 percent, our nation's economy also grew 3.8 percent. To a very large extent the health of our economy is what we consumers are able to buy over the counter. When you think of it like that, what happens to our economy as corporations downsize high paying manufacturing jobs, relocating the work offshore, and replace those jobs with service sector employment in places like Wal-Mart, which pays $5.75 an hour, often without benefits?
Industry analysts understand this very well—if you don't have money you can't spend it. Which is why the low-end retailers like Wal-mart did so well in 1997. Jeff Feiner, an analyst at Lehman Brothers Inc., laid it out like this: "If you look at it analytically, what percentage of the population has really gained from the stock market? Maybe 6 percent. In Oklahoma City and Bentonville, Arkansas, people are still under pressure. So the stores that do well are value driven." (New York Times, December 5, 1997.)
THE PEOPLE'S RIGHTS
Some would say, why not just boycott? But many times that is just what the companies prefer.
We are in a global economy, with $1.5 trillion a day flowing across borders. Of the $180 billion the American people spent on apparel last year, 60 percent of it was imports. The economic crisis in Asia could cost the loss of one million jobs in the United States, as Asia's economies try to export their way out of debt by flooding North America with cheaper imports. In 1996, foreign investors poured $42 billion into manufacturing operations in China. American companies imported one billion garments made in China in just the first 10 months of 1997. Clothing imports from China were up 47 percent in the first eight months of last year. Upwards of 50,000 young women are sewing sneakers in just one of Nike's contractors' plants in China. Sixty percent of the toys families purchased during the holiday season were made in China. We have been taken into the global economy up to our necks, whether we like it or not.
Where and how we choose our human rights struggles is critical. Remember that despite the brilliant Nike campaign, Nike continues to dominate the activewear field, controlling a stunning 53 percent of the total U.S. market. Despite Kathie Lee Gifford's link to children being paid 31 cents an hour to sew her clothing line under armed guards in a sweatshop in Honduras, Kathie Lee clothing sales at Wal-Mart reached $500 million in 1997, more than double her 1996 sales. Yet these and other campaigns were enormously successful and helped change America.
Rather than a boycott, we can catch the companies in their lie. The corporations told the American people that their investments in China would improve respect for human and worker rights, and lead to more open spaces for democratic development. The American companies said they would strictly implement their Corporate Codes of Conduct, guaranteeing the human rights of workers anywhere in the world making their products. None of this has happened. In reality, U.S. companies are actually lowering standards in China and they continue to abuse worker rights behind closed doors.
What companies fear most is the light of day. Public exposure is to them what a cross means to Dracula. They do not want a widespread public debate focused on conditions and wages in their offshore factories.
The most solid foundation a human rights campaign has is the decency of the American people, who have an ingrained sense of justice and fairness. Almost no one would want to purchase a product made by exploited women, stripped of their rights, and forced to work excessively long hours for starvation wages. Only they just have no way of knowing. The real issue for human rights workers is to reach people. When people hear the stories of how companies are treating their workers, they get angry and know what to do.
The challenge for human rights campaigns is to accompany the people. Sometimes it does not help to immediately jump over where people's understanding is at, and to declare that a boycott is the only way. Is it really the best strategy to fight it out with parents who are desperate to get the toy their child is begging for?
What is threatening to the companies is that we take a lot of people with us in our campaigns. What frightens companies the most is the broadest coalitions possible, of religious, labor, students, human rights, consumers, solidarity and women's organizations, working together. Not just letterhead institutional support, but real people; real students working to make their schools sweatshop free; real parishioners writing letters to Wal-Mart.
By challenging companies in their own language, focusing on what they said they would do and how they would behave, we have a powerful tool to bring the broadest coalition together.
Corporate Disclosure—The People's Right to Know, would be such a campaign. It would drag the multinationals out from behind closed doors and into the light of day. Imagine Wal-Mart, the largest retailer in the world, having to release to the public a list of the countries it produces in around the world, in which factories, and what wages and human rights conditions are. Imagine Wal-Mart being forced to disclose its contractors' plants in China and their 20 cents an hour wages. Such a disclosure campaign would be a very popular, broadly-based issue, very mainstream, very do-able, very winnable, and very deadly to business as usual in the old boys' network behind closed doors.
Real independent monitoring by local respected human and labor rights and religious organizations—if not coopted by the likes of Ernst and Young, Cal-Safety, SGS, etc.—can be a powerful tool to pry open a legal space for workers to empower themselves, to learn and better defend their rights without being fired and blacklisted. When workers are empowered, and not repressed, they will set their own living wages through negotiations and collective contracts with the company, and monitoring their own factory conditions. Right now the living wage campaign is a very powerful mainstream issue to expose how minimum wage rates have been set well below subsistence levels by desperate developing countries trying to please the multinationals. The multinationals then milk this for all it is worth, claiming it is all legal and above board.
Many people with the deepest commitment to justice, especially religious organizations with missions around the world, want to protect human and worker rights in North America, and in the developing world. No one wants to take jobs out of Haiti or El Salvador, or anywhere else, but that does not mean you cannot fight with all your heart and soul to defend the rights of exploited workers.
Human rights campaigns must link up with people's self-interest and the needs of their real lives. Perhaps the best solidarity work that can be done in the United States to support human rights struggles around the world is to create and sustain a growing, broad-based social movement, engaging more and more people, in a demand for a new corporate accountability.
The companies are watching this very very carefully. Better than almost anyone, they understand that this is a battle over perceptions. If only five or ten percent of the people in this country were upset enough to demand that we hold corporations accountable for their human rights practices, together we could change the country. We could move the companies to do the right thing.
In the United States, we are players because we are citizens and consumers in the largest market in the world. If we reach enough people the companies must listen to us. That is our responsibility and challenge.
Does a corporate strategy make sense? Today, the majority of the 100 largest economies in the world are not sovereign nations, but rather giant multinationals. In fact, the combined sales of the 200 largest multinational corporations is greater than the combined Gross Domestic Products of 182 of the world's 191 nations.
A Call to Action
Don't Be Fooled by the Companies:
This is About Solidarity with the Independent Labor and Human Rights Struggles in China
The corporations would love to pit the American people against the people in China in a race to the bottom over who will accept the lowest wages, the least benefits, the most miserable working and living conditions. The multinationals want us to fight it out over jobs, hoping we will look at the workers in China as our enemy, thus enabling them to deflect attention from themselves, as they laugh all the way to the bank.
The people of China are not our enemies. They are our sisters and brothers. We need to stand together in solidarity if we are ever to stop the downward spiral of working and living standards.
Discussions are great, words are fine, but actions and campaigns are better. We need to do more to help defend the struggles in China to create independent unions, labor and human rights organizations. There is no other route to social justice.
A national campaign demanding Corporate Disclosure/The Public's Right to Know is a critical first step. The corporations can have all the most beautiful human rights language in the world—and they can print their so-correct codes of conduct on treeless paper with soya-based ink. But without full disclosure of precisely in which factories they are sourcing production, there is no real way to monitor their operations.
This is not about taking jobs out of China, or Haiti, or El Salvador, or any other country. It is about the universality of human and labor rights, and our joint struggle to defend those rights by holding our corporations accountable.