NOT Made in USA: A Research Paper on Sweatshops and How They Could or Could Not Always Be a Bad Thing. By: Diana Joines and Christina Zahn

Transcription

1 1 NOT Made in USA: A Research Paper on Sweatshops and How They Could or Could Not Always Be a Bad Thing By: Diana Joines and Christina Zahn CRS 530 Consumer Economics April 25, 2009

2 2 Introduction This paper is a research paper about sweatshops, how they began, why they are being disputed, a possible solution, and how they are a good asset to the textile and apparel industry around the world. This research paper topic was decided by my partner and I because it is still considered a current problem in today s society and we wanted to put forth our research information that we found to help others understand the benefits of sweatshops in third and fourth world countries. What are Sweatshops? A sweatshop is a place of employment with workers who make mainly apparel garment items but also make electronics and toys, where the working conditions are poor with long hours with very few breaks. Today, a sweatshop is considered to be an "employer that violates more than one federal or state labor law governing minimum wage and overtime, child labor, industrial homework, occupational safety and health, workers compensation, or industry registration." History Though history shows sweatshops to be crowded, dangerous, and what many people consider being inhumane, the beginning of these types of factories started in the eighteen thirties with a longing to begin the future of the apparel industry. In 1830, these factories employed mainly women and children who had employers that were called sweaters in which were considered to be middlemen who directed other garment

3 3 workers. These factories employed very little employees in which most employed only as much as one hundred workers at each shop at a time. The sweaters were considered to be a very important role in the apparel and retail industry as they were the subcontractors and were in charge of their group of workers who were isolated in small workshops. Because of the isolation in the workshops, the workers could not differentiate who was their boss and who was not due to collective bargaining between multiple sweaters coming in to each workshop. Tailors and other apparel retailers would hire the subcontractors with work for the employees of the sweatshops and workers would have multiple sweaters bargain over garments and pay. From this, each employee of the sweatshop began to have a piece rate for each apparel item produced. Many of the workers were hungry for any type of work they were available to get and this began the profit making process of the middleman. Many of these workers were women and children, as I said before, and were very poor so the middlemen realized that they could offer the absolute minimum wage to them and still make a large profit for themselves. Even though many workers could make more money by making more apparel garments, workers who were less productive earned very little wages; this was considered to be called starvation wages. Employment at sweatshops was very risky and it is true that workers who became sick were quickly replaced by new and faster employees. Beginning in 1850, sweatshops began to grow rapidly in major cities such as England, East London, and New York. These immigrants migrated from rural and poor areas of the world to come and work for long hours in order to make, at the time, large amounts of money for their families. From then on, where ever a sweatshop was, there

4 4 were protestors and critics who disagreed with the poor ventilation, crowded areas, long hours and the overall working environments of sweatshops. Many protestors argued that the crowdedness of the sweatshops produced fire hazards, rat infestations, and the quick spread of sickness. By 1910, the International Ladies Garment Workers Union evolved in order to improve the working environment of sweatshops. This began the regulations for safety and labor in the workplace. This movement became an international phenomenon with journalists even getting involved by using the word sweatshop in a negative way in their articles and deeming every workshop condition as intolerable and inhumane. Journalists in America also began exposing the business of the textile and apparel industry by writing investigative articles, which were called Muckrakers, which forced politicians to campaign for new labor laws. In 1911, the Triangle Shirtwaist Factory Fire in New York City only added on to the evolution of new labor laws for apparel factories. The fire killed one hundred and forty-six female employees out of five hundred, to which most were around the age of fifteen. This caused even more controversy over safety and labor regulations and eventually began the decreasing of sweatshops in developed countries and increased trade unions, fire safety codes, minimum wage laws, and labor laws. It however did not eliminate them and still did, in turn, help them increase within developing countries. Today s Conflict Today, many sweatshops are still around and many have improved working conditions, however, do still have problems with developing countries and human trafficking. Within many developing counties, women children, and men are still being tricked into working in the industry without consent. These individuals are usually young,

5 5 uneducated, poor, and have been kept under mental constraint throughout their lives. It is true that sweatshops in underdeveloped countries have harsher working environments and living conditions when compared to developed countries, which is the main cause of the contradiction between countries and human rights. Most people that were raised in developed countries believe that the workers of sweatshops are mistreated and hate their lives. However, the people of those underdeveloped countries disagree some times. People from underdeveloped countries, such as China, India, Honduras, Bangladesh, and Vietnam, seek to encourage outsourcing for their working and employment because it provides them with the availability of more jobs, money, and opportunity to become a better, possibly developed country with the help of other developed countries, or what is called Globalization. The Anti-Sweatshop Movement The modern anti-sweatshop movement in North America, as well as other countries, has worked creatively for over a decade to push for reforms of the production system and to educate the public about the systemic sweatshop abuses. This movement began in the mid-1990 s with a sweatshop in El Monte, California in the United States that was ran by an American icon, Kathy Lee Gifford. Many sweatshop activists demanded for codes of conduct and factory monitoring in order create sweat-free factory labor standards which consisted of a living wage, limited hours of work, and safer factories. Many activists stressed the crucial importance of factory location disclosure, so contractors could be investigated, and freedom of association for workers to organize and improve their own working conditions. The public attention and activist demands put the industry on the defensive.

6 6 Major code/monitoring programs that deal with multiple companies in the apparel industry include the Fair Labor Association (FLA), which grew out of President Clinton s Apparel Industry Partnership initiative of the late 1990s, Social Accountability International (SAI), founded by the Council on Economic Priorities, and the Worldwide Responsible Apparel Production (WRAP) system, which is run by the major industry trade association, the American Apparel and Footwear Association. Dissatisfied with corporate controlled code/monitoring systems such as these, the United Students Against Sweatshops (USAS) created the Worker Rights Consortium (WRC) to investigate problems associated with the production of university-licensed apparel.6 Other code/monitoring systems exist in Europe, such as the Ethical Trading Initiative (ETI) and the Fair Wear Foundation (FWF). Statistics of Today Wages Wages of employees and their hard work has been a major focus of many econometric studies. Some economists say that after controlling for other factors, multinational firms pay higher wages than domestic firms in Third World countries, while other economists say that multinational firms improve workers lives by increasing the demand for labor. When wages are converted to US dollars, the average apparel worker from Vietnam is $0.26 per hour and $1.31 per hour from Honduras. However, when converted, the average household in Honduras makes an annual income of $8,120 which equals out to an average minimum wage of $3.52 per hour. Therefore, the wages actual help families make ends meet when compared to their currency. The minimum wage for people of Vietnam is $0.46 per hour when converted to their

7 7 currency, which again makes their currency just seem a lot lower than developed countries think. To developed countries, their currency seems very low however actually are relatively normal to sometimes even higher in underdeveloped countries. Even though sweatshops today are seemed to offer very little pay according to some, the working pay differs from country to country and also by contractors who are making the work available to them. The following chart compares the apparel industry wages as a percent of the average national income for individual countries.

8 8 The second figure compares the apparel industry wages as a percent of average national income per worker for individual countries. Figure 2 Apparel Industry Wages as a Percent of Average National Income per Worker Rights and Codes of Conduct The World Trade Organization (WTO) was developed to produce specific rules for world and international trade between countries. Even though this organization does not necessarily include workers rights, it helps control them due to investigations and monitoring of facilities. The expansion of free trade around the world, long a pillar of U.S. foreign policy, is once again becoming a cornerstone of U.S. policy. After the end of World War II, the United States employed trade policy as a tool to promote economic freedom and stimulate economic growth both at home and abroad. Because of its leadership on trade, more people in more countries experienced greater improvements in their living standards than at any previous time in U.S. history. In fact, world exports

9 9 in dollars are 18 times higher and world gross domestic product (GDP) is now six times greater than they were in 1948 when the major economic countries signed on to the market-opening General Agreement on Tariffs and Trade (GATT), which laid the groundwork for today's World Trade Organization (WTO). Many countries strive to get their country to be available for free trade however due to each country s individual human rights, some cannot seem to change their way of living due to their exclusive poverty.