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© International Labour Organization/G. Cabrera/www.ilo.org

Young girls in Pakistan sewing soccer balls.


"Our concerns for workers extend beyond our borders since we live and act in a global marketplace. Through the eyes of faith,

we are called to see others, not as economic rivals or problems, but as members of one human family. In a rapidly

shrinking world "loving our neighbor" takes on a new meaning and globalization redefines and enlarges

 the Biblical question "who is my neighbor?"


Roger Cardinal Mahony
Archbishop of Los Angeles
Labor Day, 2001



Co-op America: Economic Action for a Just Planet

What to Know

Sweatshops exist in countries around the world, even in the US. Why? The search for cheap products that can be sold for greater profit is fueling a race to the bottom where we all lose--our families, communities, farmers, workers, and the environment.


This set of FAQ's should answer many of your questions, and can serve as a resource for your own efforts to educate others about sweatshop labor.

Q: Why are there sweatshops?
A: Corporate greed and global competition to produce goods at the lowest possible price are the main reasons for the existence of sweatshops. It's much more cost-effective for corporations to subcontract their manufacturing to suppliers who produce goods cheaply by minimizing worker salaries and benefits, skimping on factory and dormitory upkeep and standards, and demanding high levels of productivity (long hours and big quotas) from their workers.

Developing countries desperately need foreign investment, and therefore compete with one another to produce goods more and more cheaply, allowing US corporations to dictate their purchase prices. As reported by the business journal Fast Company in December 2003, Wal-Mart (the country's largest retailer) actually implements a corporate policy of requiring its vendors to continually seek ever-lower prices for its products. "[Wal-Mart] has a clear policy for suppliers," writes Fast Company's Charles Fishman. "On basic products that don't change, the price Wal-Mart will pay, and will charge shoppers, must drop year after year."

As retailers compete with one another by seeking lowest-cost workers, they put pressure on suppliers to keep their costs down, and they encourage consumers to buy more at "discount" prices. This market for cheap goods then squeezes factory owners to pinch even more. The result is forced overtime, low wages, punishments and fines for slow work and mistakes, worker intimidation, child labor, and other abuses.

Q: But if the reality is that companies have to cut costs to stay competitive, aren't sweatshops inevitable?
A: No. Low prices are only one of many factors consumers take into account when they shop, and most consumers don't willingly purchase goods made in sweatshops or with child labor. Since 1995, three separate research organizations have conducted surveys on consumer attitudes toward purchasing products made under sweatshop conditions. The surveys consistently find that the average consumer would pay up to 28 percent more for an item if s/he knew it wasn't made in a sweatshop.

Furthermore, with staggering disparities between the pay rates of corporate executives and the pay rates of actual workers, there's no reason that the pursuit of low prices should demand rock-bottom wages for those least able to afford it. For example, while workers in Saipan sewing Levi's blue jeans were making just $3.05 per hour, Levi's CEO Philip Marineau saw his pay soar to $25.1 million (or $11,971 an hour), nearly 15 times what he earned in 2001, according to Sweatshop Watch. The money allocated for Marineau's raise could have accommodated a 50 percent pay increase for more than 7,500 minimum wage workers in Saipan, helping to lift whole communities out of poverty. Alternatively, such a large sum of money could have continued to pay the salaries to more than 600 of the Levi's workers recently laid off in San Antonio, and Levi's could have avoided shifting even more of its production overseas. Furthermore, even with the shift to cheaper overseas production, such savings at the corporate level do not get passed on to consumers. If corporations can afford such exorbitant compensation for their executives, they can afford to pay workers a living wage while remaining competitive in the marketplace.

Q: Isn't the low-wage employment offered by sweatshops better than not being employed at all? Don't sweatshops help poor people climb out of poverty?
A: No. Sweatshop workers and child laborers are trapped in a cycle of exploitation that rarely improves their economic situation. Since multinational corporations are constantly pressuring suppliers for cost-cutting measures, workers most often find conditions getting worse instead of better.

Consider the example cited in a 2003 National Labor Committee report on a Honduran worker sewing clothing for Wal-Mart at a rate of 43 cents an hour. After spending money on daily meals and transportation to work, the average worker is left with around 80 cents per day for rent, bills, childcare, school costs, medicines, emergencies, and other expenses. Not surprisingly, many workers are forced to take out loans at high interest rates and can't even think about saving money to improve their lives as they struggle to meet their daily needs.

Q: Isn't it time-consuming and expensive for corporations to track their goods' origins?
A: No, actually most corporations already track their goods to the subcontractor or factory level in order to monitor the quality of their products. "In competitive industries like the apparel industry, all companies have quality control," says Nikki Bas, executive director of Sweatshop Watch. "If companies are able to send representatives to inspect the quality of a garment, they can inspect the quality of their factories as well."

Around the world, name-brand retailers are investing in new technologies—information systems, international shipping firms, quality assurance monitoring, business-to-business software, bar codes, universal numbering systems, and more—all of which can facilitate better oversight for the factories at products' points of origin.

Q: When companies track their goods to keep sweatshop labor out of their supply chain, do they mark their products with a special label?
A: Unfortunately, no overarching "sweatshop-free" label exists. Some independent monitors like
Verité follow the supply chains of companies that pay a fee for that service and help facilitate follow-up correction programs for factories found to be in violation of labor standards. Because conditions can change rapidly at factories, Verité does not go on record endorsing particular companies or factories. For some select industries, however, dedication to monitoring efforts has resulted in useful labeling for a handful of products. For example, the RUGMARK Foundation combats the existence of child labor in the woven rug industry by certifying manufactures to agree to RUGMARK standards, and then following up with random, unannounced inspections. Carpets made by these companies then carry the RUGMARK label, letting consumers know that the carpet is child-labor-free.

Certain commodities such as coffee, tea, chocolate, and bananas are monitored by TransFair USA, which labels products as Fair Trade Certified™, meaning that the consumer can be assured that the farmer at the product's point of origin received a fair price. You can find Fair Trade products listed in Co-op America's National Green Pages™.

Q: Should I boycott manufacturers that use sweatshop labor, or should I pressure companies to change?
A: You can do both. In general, boycotts are most effective when organized by the workers themselves. Otherwise, a boycott effort could cause a company to cut and run from a factory found perpetuating sweatshop conditions, rather than working with the factory to change its business practices. A good way to help improve conditions for workers is to contact the retailers and manufacturers of the products you buy and ask for guarantees that their workers were paid a living wage and given basic rights. Include the tag from inside a garment with your letter to let the company know you are already a customer. If you can find the product that you need produced by a company you know to be responsible in its labor practices, you should reward that company with your business.

Learn more about organizing a boycott »

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Sweatshops: Economic action to end sweatshop and forced child labor