The word "sweatshop" was originally used in the 19th century to describe a subcontracting system in which the middlemen earned their profits from the margin between the amount they received for a contract and the amount they paid workers with whom they subcontracted. The margin was said to be "sweated" from the workers because they received minimal wages for excessive hours worked under unsanitary conditions.
Today's subcontracting system functions on a global basis. Large clothing companies produce apparel in 160 countries, often with shockingly low wages and horrible working conditions. Apparel workers in Bangladesh earn 20 cents an hour, and in the free trade zones in El Salvador they earn 56 cents an hour, just to give two examples. The clothing companies then export that apparel to 30 developed countries, like the United States and Canada. Meanwhile, apparel workers in the developed world are forced to compete against those conditions.
A sweatshop is characterized by the systematic violation of one or more fundamental workers' rights that have been codified in international and U.S. law. These rights include the prohibition of child labor, forced or compulsory labor and discrimination in employment based on any personal characteristic other than the ability to do the job; the right to a safe and healthy work environment that does not expose workers to degrading or dangerous working conditions: freedom of association and the right to organize and bargain collectively. A sweatshop is also characterized by wages that do not permit workers to feed, clothe and shelter themselves and their families, and hours of work so long that education and a decent family life are out of reach.
Sweatshops in the U.S. are often lawless operations in other ways, evading not only wage and hour laws, but also paying no taxes, violating fire and building codes, seeking out and exploiting undocumented immigrants and operating in the underground economy, hidden from public view.
Sweatshops are most prevalent in apparel manufacturing, but sweatshop conditions exist in an increasing number of manufacturing and service industries. Subcontracting is being used for auto parts, building maintenance and many kinds of public sector work with the explicit goal of lowering wages and benefits. Even among professionals, there is a trend towards replacing corporate staff with freelance consultants without job security or benefits. Apparel sweatshops are just the extreme version of the general lowering of living standards and corporate attempts to evade responsibility for workers and working conditions.
Why Have Sweatshops Returned?
Today's apparel sweatshop is a product of the global economy. Large retailers and manufacturers, seeking greater profits in a highly competitive industry, contract production to thousands of contractors and subcontractors located wherever labor costs are low, whether in Malaysia or Honduras, Los Angeles or New York.
An increasingly concentrated retail market has changed the structure of the apparel industry. As early as 1993, the five largest retail companies accounted for almost half of total retail sales-$168 billion. Today, these giant retailers often bypass the traditional apparel manufacturer, ordering their own "private label" or "house brand" goods directly from contracting shops at home and abroad.
Changes in immigration laws in the mid-1980s made it illegal to employ undocumented workers. This did not stop the employment of undocumented immigrants; it just drove that employment underground. Once these contractors were breaking the immigration law, it was a simple step to breaking wage-hour, tax and labor laws. And undocumented workers' fear of discovery helped keep sweatshops a dirty secret until recently.
But immigrants do not cause sweatshops. Rather, it is the low prices set by the retailers and manufacturers at the top of the apparel industry chain that create the conditions for sweatshops to flourish and for immigrants to be exploited. The decade of cuts in funds for government monitoring of industry lawbreakers makes sweatshops a highly profitable and low-risk "solution" to the competitive pressures of the global apparel industry.
How Many Sweatshops Are There in the United States Today?
Sweatshops are part of the underground economy and operate in violation of many laws. Transactions are often in cash, and sweatshops actively work to avoid detection, so it is difficult to count them. It is possible to make an educated guess, however. There are fewer than 1,000 garment manufacturers who parcel out production to about 22,000 contractors, some of them legitimate and some of them sweatshops. Each contracting shop typically employs 25 to 50 workers (but can have as many as 100 workers). There has been a three-fold increase in the number of tiny subcontractors (under 20 workers) from 1977 to 1992 at the same time that larger shops (with better conditions) have closed down. The GAO has reported estimates of sweatshops in major garment producing centers:
New York City: In 1994, the GAO reported an estimate that 4,500
of 5,000 garment shops were sweatshops.
Miami: 400 of the total 500 garment shops are sweatshops.
El Paso: 50 of 180 are sweatshops.
New Orleans: 25 of 100 apparel firms are sweatshops.
The GAO also reported, that there are apparel sweatshops in
parts of New Jersey, Chicago, Philadelphia, San Antonio, and Portland,
OR.
Compiled by UNITE Research Department
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New York, NY 10019