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Sweating It Out

Nike’s Bad Air

by JEFFREY ST. CLAIR

This is an excerpt from JEFFREY ST. CLAIR’s new environmental history, Born Under a Bad Sky, now available from AK Press / CounterPunch Books.

The place is in Honduras, a so-called free-trade zone or maquiladora—little more than a ragged swath hacked out of the rainforest and ringed by a tall fence, tipped with razor-sharp wire. Inside a clump of factories produce cut-rate apparel for American companies. Armed guards, many of them veterans of the Honduran defense forces (accused by human right groups of assassinations, drug-running, and torture of political prisoners), patrol the borders.

Most of the workers here are young and upwards of 80 percent are female. The average age of the Honduran sweatshop laborer is about fifteen, though some may be as young as ten. Workdays may stretch to fourteen hours, six days a week, in oppressive heat. Laborers are allowed only two tightly monitored breaks for water and bathroom use. And many days the work doesn’t end at the factory. To meet production quotas, some workers lug their sewing home, where the entire family toils away late into the night.

Questions of health benefits, worker compensation, pensions and overtime pay simply have no relevance here. The issues facing workers inside these squalid factories are much more basic. It’s about day-to-day survival, enduring the wrath of abusive managers, working through illness, injury, and depression. And it’s about growing old very fast.

“It’s hard and painful work,” says Wendy Diaz, a sixteen-year-old Honduran girl who worked at the Global Fashions factory, making pants for sale at Wal-Mart under the “Kathie Lee Gifford” line. “I started work there at thirteen. The managers were cruel. They would yell at us all the time. They would lock the bathrooms all day long. When we got tired or talked to each other, they would beat us to keep us on schedule.” Diaz’s family couldn’t afford to let her stay in school past the fifth grade. So she worked sixty-five hours a week, every week of the year.

This dire situation is hardly confined to Latin American countries or the garment industry. “Sweatshops are absolutely not limited to apparel,” says Charles Kernaghan of the National Labor Committee in New York City. “Sporting goods, electronics, shoes, sneakers, agricultural products, coffee, bananas—you name it—it’s made under some pretty rough conditions—in factories in Malaysia, the Philippines, Indonesia.”

In Pakistan, children are often sold into servitude to factory owners where they are chained to looms for fifteen-hour days, making rugs and carpets for export to the United States; in Africa and Indonesia, male children, some only twelve years old, are sent into hazardous mines owned by American and Canadian firms to extract gold and silver that will be forged into rings and trinkets; in Colombia, children are forced into dangerous jobs making bricks or out into the coffee plantations to pick beans for Starbucks; in India, kids toil near blazing furnaces making glass bangles; in Siberia, American and Japanese timber companies are paying timber workers (one of the most dangerous professions) less than $1 an hour to log off the last wild forests in western Russia, home of the Siberian tiger. The Associated Press reported that there may be more than 200 million children working in overseas sweatshops producing goods for American consumers. This geography of shame is global, the dark underside of the new international economy.

In 1996, public concerns about overseas sweatshops prompted congressional hearings, lofty promises by apparel companies to more closely monitor their contractors and a presidential task force on the issue. In April 1997, following leafleting by the US/Guatemala Labor Education Campaign, Starbucks Coffee finally took action towards a pilot project that will implement a more humane code of conduct by coffee growers toward workers in Guatemala.

But so far there’s no sign of a wide-spread shift toward restraints on child labor, better pay or safer working conditions. One reason for this is that new international trade pacts, such as GATT and NAFTA, make it difficult to enact sanctions against countries that permit labor abuses. And another reason is the obvious one: these cheap labor pools are enormously profitable for American corporations.

The consequences of the new global trade reach far beyond the wretched conditions inside the factories themselves. Environmental degradation is a hidden externality of the shift in industrial production from developed countries to Latin America and Southeast Asia. The new plants consume enormous amounts of energy in areas where power supplies have been primitive in the past. To meet the increased demand, Indonesia and Mexico have begun constructing huge coal-fired power plants, posing a grave threat to air quality in places like Jakarta and Mexico City. Similarly, China is in the midst of building dozens of new coal-fired plants that will emit thousands of tons of greenhouse gases each year, a dangerous contribution to global warming trends. But China also has more monumental ambitions: the Three Gorges hydroelectric dam. The 800-foot tall dam is the largest construction project since the building of the pyramids. It will impound nearly 400 miles of the Yangtze River, destroy the habitat of more than two dozen rare and endangered species, and force the dislocation of nearly 3 million people, all in order to power an estimated 2,500 new factories in China’s southern provinces.

The attraction of Latin American and Southeast Asia for US companies, such as Sears, Gitano, and Eddie Bauer, is easy to understand: no pesky environmental standards to put up with, no worker safety codes, minuscule corporate taxes, and astoundingly cheap labor costs. In Haiti, for example, workers making the lucrative, movie-related clothing lines for Disney make no more than 28 cents an hour, or around $40 per month. Even in this impoverished country, that’s not enough to live on without making sacrifices. Some costs, such as rent (which can consume half of the monthly pay), cannot be reduced. So usually it comes down to eating less. As Bob Herbert, a columnist with the New York Times, observes, these companies “thrive on the empty stomachs and other hardships of young women overseas.”

Though largely unremarked on by the mainstream press and the American public, this situation has been building for more than a decade. During the mid-1970s, the US enjoyed a $3 billion trade surplus. Since 1976, however, America has suffered from a spiraling trade deficit, reaching $170 billion a year in 1987. US corporations that have shifted manufacturing operations overseas account for nearly 60 percent of this figure. The US Commerce Department reports that nearly 60 percent of the apparel sold in the United States in 1996 was imported, nearly twice the level of 1980. Most of these garments are made in sweatshops throughout the Third World, utilizing child labor.

Despite airy promises of tough standards on working conditions and environmental protection, international trade agreements passed in the early 1990s, such as NAFTA and GATT, have merely exacerbated the problem, according to Sarah Anderson, a researcher at the Institute for Policy Studies in Washington, DC. US companies, such as General Electric, Louisiana Pacific, and Alcoa, have flocked to the Mexico to take advantage of the country’s meager environmental provisions. The toxic legacy of this migration is already showing up. Alcoa, which has been hit with some of the largest criminal fines for hazardous waste violations in US history, opened a plant in Ciudad Acuña in 1993. Within a year, a series of poisonous gas leaks sent 226 workers to the hospital. When workers at GE’s Ciudad Juárez plant talked to reporters about the deadly chemicals used at the factory, they were fired.

The figures on jobs lost in the US due to NAFTA are also sobering. Anderson points to a study from the University of Maryland that estimates that in 1994 alone more than 150,000 US jobs were lost as a result of Mexican imports—90,000 of those jobs in the apparel industry. The US Department of Labor estimates that America may lose another 759,000 manufacturing jobs by the year 2010.

“We find ourselves in a wage race with the rest of the world,” says Charles Kernaghan. “It’s a race to the bottom of the pay scale.” The real wages of American workers have declined about 8 percent since 1989. Forced to compete with overseas sweatshops, American garment workers have watched their pay decline by more than 12 percent. But this trend shows up most starkly in the pay of American farm-workers, which has fallen by more than 20 percent in the last two decades. In the broccoli fields of California’s Parajo Valley, workers are paid only $2.50 per box of broccoli picked, down from $3.70 in 1986. Meanwhile, truckloads of low-cost (and pesticide-laden) Mexican broccoli, strawberries, and other fruits and vegetables stream across the border every day.

This disaster for workers and the environment has been a bonanza for hundreds of multinational corporations. Take Nike, ostensibly an Oregon-based company that now controls 35 percent of the athletic shoe and apparel market. It began making shoes in Japan in 1967, where production costs were a quarter of that in the United States and Europe.

Rising labor costs prompted its production factories to move to South Korea in 1972. Donald Katz writes in Just Do It, a best-selling book about Nike, that the shoe plants were run by a combination “of terror and browbeating.” After Korean workers won labor rights in the mid-1980s, Nike picked up its bags and moved once again, this time to Indonesia and China. In the mid-1990s Nike began to shift operations to an even more pliant labor market: Vietnam.

In Vietnam, Nike employs more than 25,000 workers who produce nearly a million pairs of shoes each year. The conditions are grim. Thuyen Nguyen of Vietnam Labor Watch, a New York-based group, says that Nike workers are subject to intense verbal, physical, and sexual abuse. In one factory outside Ho Chi Minh City, nearly sixty female workers were forced to run laps around the factory as punishment for not wearing the proper shoes. A dozen of the women fainted in the oppressive heat and had to be hospitalized. In another instance, twelve female workers were viciously beaten on the head with a shoe by plant supervisors. As discipline for talking on the factory floor, workers have had their mouths sealed with duct tape. “Nike is clearly not controlling its contractors,” Thuyen said. “And the company has known that for a long time.”

There’s a simple reason companies like Nike have continued to turn a blind eye to these abuses: skyrocketing corporate profits. In Vietnam, it costs Nike only $1.50 to manufacture a pair of basketball shoes that can be sold for $150 in the US. The production costs are low largely because the average pay of a Nike worker in Vietnam is only $42 a month or about $500 a year. Compare this tiny sum to the $20 million a year Nike lavished on Michael Jordon to pitch its basketball shoes, shorts, and hats. Jordan’s salary amounts to nearly twice the annual payroll of the entire workforce of Nike contractors in Vietnam. The disparity with Nike CEO Phil Knight’s annual take is even more grotesque. Knight, who owns 100 million shares of Nike stock, pulls in roughly $80 million in dividend payments each fiscal quarter. At that pace, a Vietnamese worker would need to toil for nearly 4,000 years to equal Knight’s annual income.

None of this seemed to penetrate too deeply into the popular consciousness until the National Labor Committee revealed, in 1996, that talk-show hostess Kathie Lee Gifford’s Wal-Mart clothing line was manufactured by child laborers in Honduran work camps. Initially, Gifford denied the reports. Confronted with incontrovertible evidence, Gifford disclaimed any knowledge of the work camps. When it was later shown that some of her blouses had been assembled under sweatshop conditions at the Seo Fashions factory in New York City, Kathie Lee sent her husband, Frank, to hand out envelopes stuffed with $300 to underpaid laborers who had been making her clothing line. Wal-Mart later said it would reimburse the Giffords.

Shortly after Kathy Lee’s embarrassing news, appalled American consumers began asking serious questions about the conditions under which consumer goods were being made. With the attention of the press and the public finally aroused, President Clinton convened a special task force to develop global labor standards for the apparel industry. The presidential panel included companies such as Nike, Reebok, Patagonia, and Liz Claiborne; two labor unions (Union of Needletrades, Industrial, and Textile Employees—UNITE—and the Retail, Wholesale, and Department Store Union); and the Robert F. Kennedy Memorial Center for Human Rights.

The presidential panel agreed to establish a voluntary code of conduct on working conditions for overseas apparel factories used by American companies and provides for the monitoring of those factories to ensure compliance. Companies that meet standards established by the task force win the right to put a “No Sweat” label in their clothing, thereby assuring consumers that their merchandise is not made with sweatshop labor.

“The problem is that the labor and human rights groups ended up making most of the sacrifices,” says Ellen Braune of the National Labor Committee. “But these are only proposed rules, there’s still a chance to improve them with enough public pressure.” First, companies agreed to establish a maximum sixty-hour work week, unless employees volunteer for more. But many workers, who aren’t making even subsistence wages, will feel compelled to work as much time as they can physically endure. Others will often “volunteer” to do anything management wants because they’ll be fired if they don’t.

The panel rejected calls from human rights groups to adopt a “living wage policy” which would require contractors to pay at least subsistence wages. Instead, the agreement also calls for companies to voluntarily pay their workers the prevailing minimum wage. In many Asian countries the prevailing wage is as little as 20 cents per hour, which does not come close to subsistence levels. In Indonesia, for example, the minimum wage is $2.36 a day, while it takes $4 a day just to meet basic needs. And corporations can even get an exemption from that pathetic standard. Nike has already violated minimum wage standards in Indonesia, and Disney has done the same in Haiti.

Labor organizations lobbied fiercely for independent monitoring of the overseas factories by church and human rights groups, but business furiously fought off that proposal. In the end the crucial task of monitoring the agreement was left to US accounting firms paid by the apparel makers, such as Arthur Andersen, Peat Marwicks, and Coopers & Lybrand. American companies will be able to get away with paying overseas workers 20 cents per hour and be rewarded with the coveted “No Sweat” seal of approval as well. This outcome illustrates a huge drawback in the current trend toward labeling products as worker-and-environment friendly.

The reason companies like Nike pay people like Michael Jordon $20 million is that their profits depend more on the image of the company than the quality of their products. That’s why direct pressure on the corporations such as Nike, The Gap, and Disney may be the most effective consumer strategy of all. Disney, for example, could not long withstand a campaign that tells people that Mickey Mouse t-shirts are made by Haitian kids in oppressive sweatshops where they aren’t paid enough to eat. “If Americans knew what was going on down here, the yelling, the hitting, the abuse,” says Wendy Diaz, “I’m sure that they would help stop the maltreatment.”

JEFFREY ST. CLAIR is the author of Been Brown So Long It Looked Like Green to Me: the Politics of Nature and Grand Theft Pentagon. His newest book, Born Under a Bad Sky, is just out from AK Press / CounterPunch books. He can be reached at: sitka@comcast.net