Companies Love Misery
by Charles Kernaghan
Dollars and Sense magazine, March/April 1999
(The National Labor Committee, based in New York City and led by Charles
Kernaghan, has been a leader in efforts to spotlight the horrific wages
and working conditions at garment factories throughout Central America and
the Caribbean. In October 1998, Kernaghan spoke at a forum sponsored by
the Harvard Trade Union Program, titled "Global Labor Standards and
the Apparel Industry. " Central to the forum were efforts by U.S. labor
and student activists, pushing industry to adopt and enforce labor standards
in their contractors' factories, no matter where the factories are located.
Below we present excerpts from Kernaghan's speech.)
Recently we went to El Salvador with a group of college students. We
dashed to the hotel, threw our stuff down, and went right to our first meeting.
In came thirty or forty workers, who told us, "We just got off from
work. We've been working seven days a week, sometimes up to 15 hours a day.
" They would get there at 6:45 in the morning and they'd go right through
till 11:00 at night. On Saturdays they'd work until 5 PM, although sometimes
they'd work 22 hours straight till 6 AM the next morning. If they didn't
work 22 hours, they'd work till 4 PM on Sunday.
They told us about the piece rate, the pressure, the humiliation, the
yelling at the workers. If a thread was hanging out of a garment, supervisors
would throw the garments in the workers' faces, scream at them. They told
us about the enormous pressure [to produce].
There was very limited access to the bathrooms-once in the morning,
once in the afternoon. They told us about women who were tested for pregnancy-when
they tested positive, workers were immediately fired. They told us the wages
were 60 cents an hour. Those wages would meet about one-third of the Cost
of living-real starvation wages.
They told us, "The week before you arrived, 18 workers were fired
for protesting being forced to work on an important national holiday in
El Salvador, Patron Saints' Day, and because of a rumor that the workers
wanted to organize." This was the fifth time in this factory that workers
had been illegally fired to break a union organizing drive.
In these factories companies pass around a sheet so you can "voluntarily"
sign up for overtime. If you don't sign this sheet, you get suspended for
three days without pay. The second time it happens, it's eight days' suspension
without pay. The third time you're fired. So these workers were forced to
work enormous overtime hours. They were not permitted sick days. If they
took a sick day or a few hours off, they were docked two days' pay.
We said to them, "What label do you make?" They reached into
their pockets and took out a label Liz Claiborne. The jacket cost $198 and
the women in El Salvador were paid 84 cents to sew it. What's significant
is that for the last two years the Liz Claiborne company has co-chaired
the White House Task Force to eliminate sweatshop abuses. It says a lot
about how far we have to move from the theory of ending sweatshops to the
El Salvador is now the eighth-largest exporter worldwide of apparel
to the United States. This year it will send us 288 million garments. There
are 60,000 to 65,000 maquiladora workers, and not one union-they are not
As for the factory that the clothing was produced in, the cinder-block
walls are ten feet high, topped by barbed wire, and there are locked metal
gates. It's the same everywhere you go in Central America. There are teenagers
going in to work. When the door opens, there are goons- armed guards-carrying
pistols and sawed-off shotguns. They don't allow visitors. Many times Labor
Ministry officials can't get into the factories. The workers are vulnerable
They were paid about $4.79 a day, and they told us how they lived on
those wages. It costs 80 cents a day to go back and forth from work by bus,
91 cents for breakfast and $1.37 for a very small lunch-chili, tortillas,
some rice. Just to survive and get back and forth to work cost them $3.08.
When you make $4.79 that leaves you with $ 1.71. How do you feed your family,
go to the doctor, buy clothing, send your children to school, pay rent and
utilities? The women told us that the cheapest rent in the Progresso area
of San Salvador would be $80 a month, for dilapidated living conditions-and
$80 a month is $2.63 a day.
Obviously, if they pay their rent they have no money for food. The workers
would work eleven hours a day making Liz Claiborne garments, and yet they
would often go to bed hungry. They said to us, "We don't always go
to bed hungry. If we can scrape together 28 cents, we have tortillas and
eggs. That's our supper. " They told us the cheapest child care you
can get is about 68 cents a day, but no one would want to send their child
into those sorts of conditions. We asked them if they could ever afford
to buy new clothing, and they all laughed at us. Every single worker we
know in Central America purchases secondhand goods from the United States.
We give them to Goodwill, they sell them in El Salvador where the local
entrepreneurs then sell them to the workers. Their children never had milk,
meat or fish, juice, cereal, fruits, or vitamins.
To climb out of misery in El Salvador and just reach the poverty line,
the wage would have to be about $ 1.18 an hour. Would that break the backs
of Liz Claiborne and the other retailers? Sixty workers on a production
line put out 600 jackets a day. At 60 cents an hour, there's 84 cents of
labor in this jacket for the sewers. If they were to pay the stunning figure
of $ 1.18 an hour, there would be $ 1.66 of labor in a jacket, which is
only eight-tenths of 1 % of the retail price of the garment.
It's startling to see the hypocrisy and the enormous lies of the companies.
Take Wal-Mart, for example. If you go into Wal-Mart, you see flags flying
everywhere and a statement saying, "Made right here in the United States.
We support American manufacturers that support American jobs."
We thought this was very interesting. We're not a "Buy American"
group, but if Wal-Mart was saying that they work with U.S. manufacturers
and U.S. workers, it was another way for the largest retailer in the world
to say that there are standards below which they won't go. So we called
Wal-Mart and asked them how much of their clothing, handbags and shoes are
produced in the United States. We got a funny response back: they said they
didn't know. But of course they know what they're bringing into the stores!
So we decided to do something we wouldn't recommend to just anyone.
We went into Wal-Mart and spent 100 hours counting clothing and handbags.
We used hidden, voice-activated tape recorders, and I spent every Friday
night, Saturday and Sunday in Wal-Mart. I went into 14 stores in 12 states.
We counted 105,000 items in Wal-Mart, and it took another 200 or 300
hours to transcribe the tapes. Of the 86,500 pieces of clothing we counted,
only 17% were made in the United States, and 83% offshore. We counted 16,245
pairs of shoes, and only sixteen pairs-not 16% -were made in the United
States; the rest were made in China. We counted 1,910 handbags and pocketbooks
and stopped counting because zero were made in the United States. Of the
famous Kathie Lee Gifford clothing line, only 11% was made in the United
States and 89% was made offshore. The McKids brand of children's clothing
from McDonald's had 4% made in the United States, with 96% offshore. Faded
Glory men's clothing had 13% made in the United States, with 87% produced
offshore. So Wal-Mart was flat-out Iying to the American people.
We thought: Why don't we sue Wal-Mart for consumer fraud? But when we
took a look at their small print we found out we couldn't sue them. Even
though Wal-Mart declared its "unprecedented commitment to purchase
American-made goods," in the small print it added, "whenever they
meet the pricing available offshore." So Wal-Mart was completely covered.
American workers were only going to get the job if they could compete with
the nine-cent wages in Indonesia or the 50-cent wages in Mexico.
Wal-Mart produces private-label apparel in 48 countries around the world.
The big producers for the Kathie Lee Gifford line right now are Mexico and
Indonesia, where the currencies have fallen through the floor. Garment jobs
are quickly going to these countries-in fact we lost 68,000 U.S. apparel
jobs in the last 12 months. What Wal-Mart ultimately wants to do, of course,
is to pit the American people against desperately poor people in the developing
world in this race to the bottom. It comes down to who will accept the lowest
wages, the least benefits and the most miserable living and working conditions.
THE BUCK STOPS HERE?
But after the exposure of Kathie Lee Gifford, The Gap, and Nike, the
sweatshop issue is out of the bottle and the companies cannot get it back
in again. The reason why the companies are even meeting to discuss codes
of conduct and verification standards is because they realize the American
people don't believe them anymore. If you picked up The New York Times in
1985, you would have read the retailers saying, "It's not our problem,
it's the manufacturer. " The manufacturer would point to the contractor.
The contractor would blame the subcontractor. Each would rationalize that
it was the government's problem to implement U.S. Iabor law, not theirs.
They don't get away with that anymore.
So there has been a sea change. More people are aware of sweatshop conditions
now than ever before. The American people are doing more to challenge the
multinationals and to hold them accountable to respect human rights and
to pay a living wage than anywhere else in the world. We shouldn't lose
One of the most significant developments in the struggle to defend worker
rights has been the involvement of students. Today there are student movements
on 50 campuses demanding that their universities become sweat free. The
companies are frightened about where this movement is going, frightened
about the growing coalition of religious, labor and student groups. They
realize that this is a struggle for the hearts and minds of the American
To shop with a conscience, we must have the "Right to Know"
where, in which factories, under what conditions and for what wages the
products we purchase are made. We need transparency in the global economy.
We need to drag these factories out into the light of day, out from behind
the barbed wire and armed guards, where it will be harder for the companies
to use child labor or operate sweatshops. There are no easy answers, but
one thing is sure: without a social movement pressuring the companies, they
will quickly fly back to business as usual.