The FTAA and the Scourge of Sweatshops

A decade ago, most people only knew about sweatshops through what they had read in history books. Today, people read about sweatshops in their daily newspapers. The sweatshop, once thought to be a relic of another time, has returned with a vengeance.

The resurgence of the sweatshop can be directly linked to the expansion of corporate globalization. The sweatshop is both metaphor for and proof of the lawlessness and inequities of the new global economy.

Every new sweatshop exposé raises new doubts about who corporate globalization is really benefiting.

The Free Trade Area of the Americas (FTAA) will drastically accelerate corporate globalization in the Americas, giving more power to multinational corporations at the expense of ordinary citizens. This will likely spread sweatshop-style production to more countries. As dog-eat-dog competition among countries increases, workers will likely see their already-low wages drop even further and their already-assaulted rights face even more threats.

What Is a Sweatshop?

There are several different ways to define a sweatshop. According to the US Department of Labor, a sweatshop is any factory that violates more than one of the fundamental US labor laws, which include paying a minimum wage and keeping a time card, paying overtime, and paying on time. The Union of Needletrades Industrial and Textile Employees (UNITE), the US garment workers union, says any factory that does not respect workers’ right to organize an independent union is a sweatshop. Global Exchange and other corporate accountability groups in the anti-sweatshop movement would add to this definition any factory that does not pay its workers a living wage—that is, a wage that can support the basic needs of a small family.

In the popular mind, a sweatshop is identified with hard work. And, in fact, garment manufacturing’s reliance on human labor helps explain why apparel factories are so often sweatshops.

The softness of the garments used to make our clothes, along with the complicated patterns involved, means that apparel production doesn’t easily lend itself to mechanization. For more than 150 years, the sewing machine has been, and today remains, the best way of making clothes. The basic method of garment production continues to be a worker, usually a woman, sitting or standing at a sewing machine and piecing together portions of cloth. Every blouse, every pair of jeans, every t-shirt, and every pair of shoes has to be tailored by a person doing the work. Everything we wear is made by someone.

To keep labor costs low, apparel shop owners usually pay workers a “piece rate.” That means workers don’t get paid by the hour. Rather, their wage is based on the number of items—shirts, shoes, socks—they complete in a shift. If workers hope to earn a decent income, they have to work hard, and they have to work long. Basically, they have to sweat.

What Kinds of Abuses Do Workers Face?

Around the world, garment workers spend dozens upon dozens of hours a week at their sewing machines to make the clothes and shoes that eventually end up on retailers’ shelves. Verbal, physical and sexual abuse are common. Workplace injuries occur regularly. The wages are low. And when workers try to organize to defend their interests and assert their dignity, their efforts are invariably repressed. In country after country, the stories are hauntingly the same.

Workers at a plant in El Salvador, for example, say they are frequently required to work mandatory overtime as they sew jerseys for the National Basketball Association, according to the National Labor Committee, an anti-sweatshop group. That means they often put in 11-hour shifts, six days a week. If the workers at that factory refuse to work overtime, they lose a day’s pay. Workers making jeans in Mexico say that sometimes they are forced to work all night shifts, and are prevented from the leaving the factory by armed security guards.

“I spend all day on my feet, working with hot vapor that usually burns my skin, and by the end of the day my arms and shoulders are in pain,” a Mexican worker, Alvaro Saavedra Anzures, has told labor rights investigators. “We have to meet the quota of 1,000 pieces per day. That translates to more than a piece every minute. The quota is so high that we cannot even go to the bathroom or drink water or anything for the whole day.”

In the grueling atmosphere of desperate cost-cutting by corporations, work is accorded little value and, by extension, workers are afforded little dignity. Viewed more as production units than as people, sweatshop workers regularly suffer abuse and intimidation from factory supervisors. “They don’t respect us as human beings,” a Nicaraguan worker has told anti-sweatshop groups.

Verbal abuse is particularly common, and workers regularly report being harassed and bullied by shop managers. Workers who managers think are not working fast enough are usually the target of shouting and yelling. Physical abuse is also not unusual. Workers in at a factory in Mexico making collegiate apparel for Reebok and Nike have said managers there regularly hit them and slap them, according to the Workers’ Rights Consortium.

Sexual abuse is endemic. Most garment workers are women, the vast majority of them young women in their teens or twenties who have left their homes for the first time so that they can earn money to send back to their families.

According to Human Rights Watch, in the maquiladoras along the US-Mexico border, factory managers who want to weed out pregnant workers so they can avoid having to pay maternity benefits force women workers to prove they are menstruating, a demeaning procedure that is against Mexican laws. Mandatory pregnancy tests are also common in El Salvador, and women who test positive are fired, also in violation of that country’s laws.

Workplace injuries and exposure to toxic chemicals also pose a daily risk to apparel workers. To prevent workers from stealing the items they are producing, factories sometimes lock the plant’s doors and windows, creating a fire hazard. In many factories, workers are not given masks to put over their noses and mouths, exposing them to tiny cloth fibers that get stuck in the lungs or dangerous glues.

But What Kind of Jobs?

Whenever a debate about corporate globalization and sweatshops arise, defenders of the status quo will almost always say: Sure a sweatshop is bad, but at least it gives people jobs they wouldn’t have otherwise. The response to this short sighted argument is: But what kind of jobs? Yes, poor people want jobs. But they also want to be treated with dignity and respect. It’s always worthwhile to give people new opportunities. The problem is that sweatshops don’t provide real opportunities because the corporations are so determined to keep wages low.

The shantytowns of the free trade zones and the squalid dormitories connected to garment plants reveal that a sweatshop is defined as much by the factory itself as by what surrounds the factory. That is, the corporations may have invested in their factories, but they have not invested in the workers.

In their drive to keep consumer prices low, sales numbers growing, and post profits that will please investors on Wall Street, the US retail industry has become more ruthlessly competitive year after year. As the retailers put pressure on their subcontractor manufacturers to keep prices down, the manufacturers in turn squeeze the costs out of the workers, forcing them to work harder for less. The big losers are the workers—the people actually making the products.

According to the National Labor Committee, a worker in El Salvador earns about 24 cents for each NBA jersey she makes, which then sells for $140 in the US. A Global Exchange investigation revealed that workers in Mexico producing jeans for the Gap earn as little as 28 cents an hour. In poorer countries such as Haiti and Nicaragua, the wages are even lower.

In their efforts to attract investment, developing countries deliberately keep their wages low. While multinational corporations often say that workers are paid the local minimum wage, the minimum wages are set at a poverty level, rarely high enough to support a family or allow a person to save for the future.

The 60 cents an hour the Salvadoran NBA seamstresses earn is only about a third of the cost of living, and even the Salvadoran government says this wage leaves a worker in “abject poverty.” Likewise, the women making Gap jeans say they would have to earn about three times what they do to support their families. When Nike workers at seven of the company’s subcontractor plants in Central and South America were asked about their earnings, two thirds said they didn’t make enough to save or support others, according to a study funded by Nike itself.

But if the conditions and wages in sweatshop are so terrible, why to workers tolerate it? Often they don’t. In countries around the world, garment workers have sought to improve their situation by trying to organize unions. Those efforts are almost always crushed. Union organizers have been beaten, thrown in jail, blacklisted, and even killed. In some countries, such as Mexico, the government often cooperates with factory owners as they try to bust organizing drives. In a few countries with strong labor histories, such as Nicaragua and the Philippines, unions are tolerated, but not in the “free trade” zones where most sweatshops are located. In these manufacturing zones, workers are expected to leave their liberty at the factory gates.

“We’re not against foreign investment in Nicaragua,” a worker there has told rights groups. “But we are against exploitation.”

Sweatshops, the New Global Economy, and the Race-to-the-Bottom

The signature characteristic of the new global economy is the increased mobility and flexibility given to finance capital. Corporations now have more freedom than ever before to locate to whatever countries will provide the lowest wages and the loosest regulations, thereby keeping the company’s costs in check. The retail industry has taken advantage of this new dynamic like few other business sectors.

If sweatshops have become a metaphor for globalization’s excesses, that’s because garment factories are, in fact, the shock troops of the global economy. Visit a country that has just recently opened itself up to foreign investment, and you will likely find a host of garment factories, even if there are very few other multinational enterprises located there. Nicaragua and Cambodia are a typical examples—poor, war-torn countries that have attracted scores of garment manufacturers but very little else in the way of foreign investment. Low tech, intensely dependent on cheap labor, clothing manufacturing is the crest of the corporate globalization wave.

Separate forces meet in a shameful mix: A footloose industry scours the world for the cheapest wages; countries eager for any kind of investment auction off their workers to the lowest bidder; government regulators deliberately look the other way when abuses occur in order to keep foreign investors happy. It’s that combination of desperate profit-seeking and equally desperate investment pursuit which has created the race to the bottom that is at the root of the sweatshop resurgence.

For workers, the current system is a trap. The apparel manufacturers fear that if they raise their workers’ wages, and therefore their prices to the US retailers, the US retailers will simply go someplace with even cheaper workers. The threat is real. Because the garment industry is so mobile, and because the purchasing ability off the retailers is so flexible—they can shift sourcing from one country to another in a matter of a fashion season—any country that raises its wages or enforces its workers’ rights risks is, as mainstream economists say, “pricing itself out of the market.” That risk is what keeps wages low as long as the retail corporations demand the cheapest price possible.

The race to the to the bottom is happening. Regardless of which country they live in, garment workers endure the same long hours, the same hard work in demeaning environments, and same small wages.

NAFTA, the FTAA and Sweatshops

So-called “free trade” agreements such as NAFTA have exacerbated this race-to-the-bottom. NAFTA is, in a sense, an “investors rights” treaty. That is, it gives investors new abilities to move production facilities and finished goods and services across international borders while providing investors with guarantees that governments won’t get in the way of their business.

Lower tariff rates and the elimination of import quotas make it easier for goods and services to move across borders. At the same time, NAFTA’s rules have given corporations assurances that government regulations won’t interfere with their operations. NAFTA gave corporations new legal rights to sue national governments for the enactment of policies that can undermine their profits.

The changes wrought by NAFTA gave US and Canadian corporations new incentives to relocate factories to Mexico, where wages are lower and labor unions weaker. This contributed to an increase in the number of sweatshops in Mexico.

Corporations have been happy to use the new advantages given them by “free trade” agreements, especially when facing organized work forces in the wealthier countries. According to a study conducted under the auspices of NAFTA’s labor side agreement, 90% of 400 plant closings or threatened plant closings in the US in a five-year period occurred illegally in the face of a union organizing drive.

If the FTAA becomes reality, the race-to-the-bottom will accelerate as corporations gain even more ability to move throughout the Western Hemisphere. This will spread sweatshop style production to new places, while making current sweatshops even more miserable as workers are asked to toil for less and less. Under the FTAA, corporations will be able to pit exploited workers in Mexico against even more desperate workers in countries such as Haiti.

In fact, this dismal prospect is already becoming reality. China’s entry into the World Trade Organization has led to some companies moving their factories from Mexico to China, where wages are cheaper. Since 2000, about 350 maquilas have left Mexico in search of cheaper labor and looser environmental regulations. Approximately 300 of these have moved to China.

Under the FTAA, the corporations will gain more powers to act without being accountable to their workers, the communities in which they operate, or the public in general. The corporations’ gain will come at workers’ expense, as more and more people can find only jobs that offer no dignity and provide no opportunity. The FTAA will be a boon for the sweatshop economy.