What to Know
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
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
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
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
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
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
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
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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