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The Rag Trade as the Canary in the Coal Mine: The Global Sweatshop, 1980-2010

The global sweatshop has emerged from the integration of super exploited labor in the Global South with the brands and retailers of the Global North. Beginning in the 1960s, apparel industry production migrated away from the high-wage nations. This trend is linked with the more general globalization of manufacturing, and is accelerated by the immensely concentrated power of the department store chains, especially the big-box discounters like Wal-Mart. All of this, in turn, is a product of the 1960s class conflicts in Europe and the United States, in which workers’ wages rose and corporate profits were threatened.1

Thus the global sweatshop is a dramatic symbol and particular manifestation of an evolution of capitalism in the older industrial regions—from high-price/high-wage competition among a few large firms to price-competitive, low-wage competition that incorporates many more locations on a global scale. Global capitalism makes it harder for workers in traditionally low-wage industries to maintain the decent conditions of the post-World War II Global North such as those briefly obtained by apparel workers. It has also decimated the job stability, wages, and benefits of manufacturing workers in formerly well-paid capital-intensive industries like auto and steel.

The current form of globalization is specifically a product of employers’ resolve to evade and weaken organized labor and, so far, it has been successful. That is why the old miners’ tell-tale—the canary indicating the presence of toxic gases—is so apt. The vulnerable rag trade is the most obvious sector in which globalization’s impact on labor standards has made itself felt—but it is not alone.

Fires

The Triangle Shirtwaist Fire of 1911—which killed 146 people—is an iconic moment in U.S. social history. Triangle Shirtwaist—one of the largest companies in New York City at the time—has come to symbolize the bad old days of sweated labor. This connection persists, despite the fact that tenement home workshops—not a relatively modern factory like the Triangle company—were what gave rise to the term “sweated labor,” here and in Great Britain.2 The Triangle firm was a center of strike leadership in 1909’s Uprising of the 20000, but it was one of the large firms that did not settle with the “girl strikers” in 1910. The cruelty and abuse to which workers of that era were subject is forever captured in the stories of the infamous locked door during the fire. Piled against the back exit—which was locked, the employer claimed, as a security measure against workers’ theft of dresses—were the bodies of women trying to flee the conflagration. After witnessing their sisters’ failure to escape, others jumped to their deaths from the ninth-floor windows.

In the thirty years that followed, the scaffolding for worker decency was erected in the apparel business. It had three central pillars of support: the first pillar involved workers’ own unions with sufficient leverage to bargain effectively and gain a voice in the political arena. In turn, this allowed the formation of de facto political alliances with social forces outside of the labor movement itself (i.e., with the Progressives of that era). Together, this social bloc was able to erect an infrastructure of law—including social security, minimum wages, and health and safety regulations—that protected workers from the cruelest vicissitudes of the market or whims of their employers. By 1938, Life magazine declared the era of the sweatshop over. In a touching cover picture, the magazine showed two young women on vacation at the Jersey Shore—a paid vacation.

For a brief forty years, garment workers became part of a larger, political-and-socialinclusion story about manufacturing workers. In the late 1940s, they earned about 85 percent of the manufacturing sector’s median weekly wages and, in turn, manufacturing workers were entering the era when their income earned them, at least in popular parlance, middle-class status. Figure One shows apparel workers’ average weekly wages as a fraction of manufacturing workers’ average wages. Masked in Figure One is the subsequent decline of manufacturing workers’ wages in general, hammered by the same forces that were hitting apparel workers—the global race to the bottom in labor standards. Figure Two shows the loss and stagnation of manufacturing workers’ earnings in the last twenty-five years.

Swiftly, in the postWorld War II era, the fabric of garment workers’ decent living standards unraveled. Sweatshop conditions reappeared at the heart of the ILGWU’s (International Ladies’ Garment Workers’ Union) once impregnable Manhattan turf. As a contractor reported to New York magazine in 1979:

A manufacturer will tell me he has two thousand twelve-piece blouses he needs sewn. I tell him I need at least $10 per blouse to do a decent job on a garment that complicated. So then he tells me to get lost—he offers me $2. If I don’t take that, he tells me he can have it sent to Taiwan or South America somewhere, and have it done for fifty cents. So we haggle—sometimes I might bring him up to $4 per blouse. Now you tell me, how can I pay someone ‘union scale’ ($3.80) or even the minimum wage ($2.90), when I’m only getting $4 per blouse? With overhead and everything else, I may be able to pay the ladies $1.20 per blouse, but that’s tops. There’s nothing on paper. I get it in cash. 3

Recall that apparel making always featured what has now become the norm for modern management: the outsourcing of central production functions, so that the final “brand” might only function as a licensing or assembly apparatus. For example, almost none of the most recognizable brands of clothing own their own production facilities. Nor does Apple own assembly or parts production facilities for its iPhone.

Pressured by outsourcing to lower-cost export platforms—where workers were paid small fractions of the U.S. minimum wage (which is considerably below prevailing or union wages)—by the 1990s, 60 percent of cutting and sewing shops in New York and Los Angeles failed to pay the minimum wage or overtime (or both).4 For a time, the U.S. had its own domestic sweatshop issue—in the mid- 1990s, there were about four hundred thousand sweatshop garment workers in the U.S.5 The revelation that children in Honduras were among the laborers behind Kathie Lee Gifford’s supposedly child-friendly clothing line—and that other Kathie Lee items were produced amidst sweatshop conditions in Manhattan’s Chinatown—helped to create a “conscience constituency” for a new anti-sweatshop movement.6 But the replacement of U.S. labor with cheaper labor abroad has, by now, reduced the entire garment-production labor force in the U.S. from over 1.3 million people in the 1970s to under two hundred thousand people just before the Great Recession.

As cultural and fashion mores have changed, so has the sweatshop landscape. As Americans and Europeans started favoring more casual clothing items—jeans and T-shirts, instead of suits and dresses—the skill component involved with apparel making generally declined. At first, for a brief period, nonunion Los Angeles—where the laidback and outdoorsy look was invented and captivated the nation— was the center of U.S. apparel production.7 Then, as they say, it all went south.

Some of today’s “new sweatshop” labor abuses are reminiscent of those that led to the Triangle tragedy. The night of November 25, 2000, forty-five workers (including ten children) burned to death in a fire at the Sagar Chowdury Garment Factory in Bangladesh— almost eight thousand miles away from New York City. In grotesque symmetry with accounts from the Triangle Fire, “Witnesses told newspapers [that] workers were trapped because the only exit door on the ground floor was locked for security reasons and had to be broken open by firefighters.”8

On April 11, 2005, again in Bangladesh, hundreds of Spectrum garment factory workers were trapped under rubble when their building collapsed around them—sixty-four people died.9 More recently, on February 25, 2010, a fire broke out on the first floor of Bangladesh’s Garib and Garib sweater factory. The thick and toxic acrylic smoke quickly rose to the eighth floor. The exit doors were locked. Twenty-one workers died.10

Bangladeshi garment workers earn among the lowest wages in the world—and as the global export trade within the apparel industry continues to (d)evolve, their employers have gained high market share in the Global North (as have employers in China, Vietnam, and other Asia-based low-wage export platforms). These workers work twelve-hour days and live amid crowded, unsanitary conditions. Yet their employers are often considered national heroes for boosting the country’s economicdevelopment status. In 2009-2010, over threequarters of Bangladesh’s export earnings came from garment production.11

Bangladesh, China, India, Vietnam, and Indonesia are part of a low-wage, Big Asia bloc of apparel exporters to the U.S. and Europe. They control 55 percent of the U.S. import market, which amounts to about 95 percent of the U.S. apparel market (see Figure Three for information about the evolution of U.S. import market shares). How and why this happened is a tale worth telling.

Geopolitics and the Global Sweatshop

Ellen Rosen has elegantly documented the way apparel trade concessions were used as markers in the global board game of the Cold War. First Japanese (in the 1950s), then Korean (in the 1950s and 1960s), then Central American (in the 1980s) apparel exporters were granted privileged trade access as an attempt to cement their middle classes to U.S. foreign policy objectives. As each of these initiatives ramped up employment opportunities in these countries American strategists hoped to blunt any radical, anti-imperialist hostility toward the U.S. The global strategic contest with the “Communist” Soviet Union was a higher priority than saving U.S. garment workers’ jobs.12 In the U.S. Congress, representatives from Southern textile-producing states had more influence on policy than representatives (and lobbyists) from Northern garment-making states.

Up until the last minute, the apparel unions—led by the ILGWU—were willing victims of this gamesmanship. Their anticommunist zeal led them to an “internationalist” position that sacrificed the interests of their members. In 1995, Gus Tyler—longtime labor intellectual and assistant to ILGWU president David Dubinsky—noted that outsourcing (via contractors and “runaway shops”) had been the scourge of labor standards in the industry but, by 1966, the term “outside” began to mean “outside of the United States.”13

The neckwear workers’ local had been the first ILGWU local affected by the changing circumstances. Its manager proposed a convention resolution to stop or restrain imports—that were “choking his members to death”—of silk scarves from Japan. Tyler responded with the union’s traditional position—in favor of free trade and working-class solidarity—but with a social-democratic Cold War twist. Tyler explained that the war “had badly damaged the Japanese economy, that such economic distress would breed communism, that [the local manager’s] protectionism would put him, an old Socialist, on the side of the American capitalists and the Japanese Communists.”14 Later, as the U.S. apparel industry was bleeding out—and the generation of Cold Warriors who wanted to fight the Communists (whom they had defeated within their own unions) was moving on—the apparel unions became more concerned about protecting their members’ jobs. But to no avail.

After the Korean War, when South Korea became a client state of the U.S., its manufacturers gained favor in Washington. Nike Chairman Phil Knight moved Nike’s production facilities from Japan—where wages were rising—to Korea, where wages were still quite low.

Still later, in 1983—during the Central American civil wars in Nicaragua and El Salvador—the Reagan administration crafted the Caribbean Basin Initiative (CBI). The CBI gave birth to apparel export sectors in Nicaragua, El Salvador, Honduras, Guatemala, and Panama. These places were politically useful to Cold Warriors in Washington and economically attractive to major domestic retail and textile interests.15 Other trade deals were intent upon creating a manufacturing export sector in Northern Mexico, which culminated with the North American Free Trade Agreement (NAFTA), negotiated by George H.W. Bush but pushed through Congress by President Bill Clinton. Retailers were strong NAFTA supporters during the 1994 congressional trade pact deliberations.

Since the end of World War II, U.S. elites had championed a global regime of free trade. This eventually brought about the World Trade Organization (WTO) in 1994, which subjected international trade to a new set of rules and protocols. Employers and investors in the rich countries of the Global North found these rules useful in two ways: imports to their markets could not be excluded on the basis of poor labor standards; however, their investments in manufacturing or services abroad—such as retail stores or advertising campaigns—were entitled to the same treatment accorded to local establishments.16

When the WTO was formed, one of the compromises between developed and developing nations concerned the global apparel and textile industry. The (rich) importing countries agreed to let imports to their countries expand at a regular rate, and to allocate quotas—quantitative ceilings—to each of a growing number of developing-country exporters of apparel and textile products. The original agreement was negotiated in 1974 among members of the General Agreement on Tariffs and Trade (GATT)—the WTO’s predecessor. There were various versions of this pact—the Multi-Fibre Agreement (MFA)—which was later called the Agreement on Textiles and Clothing (ATC) when the WTO was established. Though the developing countries—and free trade ideologues in the U.S.—often derided the MFA as “protectionist,” two things happened while it was in effect: the apparel industry all but disappeared from most developed economies; and the restless search for quota capacity led the rag trade to become the most far-flung industry on the planet. More than one hundred countries exported at least one million dollars of clothing to the U.S. prior to 2005. During the MFA/ATC period, the U.S. lost 1.1 million (about 80 percent) of its apparel production jobs.

This MFA/ATC system expired in 2005, according to a schedule that had been agreed upon at the WTO’s establishment. Then came the cries of distress from countries that had previously complained of the MFA’s protectionism, and were now afraid of Chinese competition. Employers and government  officials in Cambodia and Bangladesh—two desperately poor countries that have depended on apparel exports for large fractions of their foreign exchange earnings—were near panic. In Latin and Central America, job loss to China had begun before the expiration of the MFA and it reached a fever pitch in the months leading up to the expiration date of the quota ceilings. Central Americans feared they would lose market share to China, Vietnam, Bangladesh, and India—and they did (again, see Figure Three).

The Global Sweatshop and the Dynamics of Capitalism

If the global sweatshop is partially the result of Cold War geopolitics, it is also a product of employers’ response to the challenge of organized labor. In the late 1960s, faced with union power in the workplace—and in the political arena—companies responded by restructuring industry and shifting its locale. Structurally, more work was outsourced—thus the “ancient” subcontracting hierarchy of the apparel industry suddenly became quite modern. Employers also moved their own facilities and their favored sources of contractors to places—including, most recently, the sweatshops of China—where the right combination of low wages, weak political challenges, and adequate infrastructure could be combined.17

The reappearance of super-exploited labor in the clothing commodity chain—from the cotton field to the retail rack—created a backlash effect on garment labor in the U.S. (The exportation of engine construction to Mexico, Brazil, and China has similarly disciplined and humbled U.S. autoworkers.18) The last halfcentury has been an era of class struggle, most aggressively initiated by corporate managers and investors, and most singularly implemented by geographic shift.

In the early part of the twentieth century, the “race to the bottom” involved the miserable conditions of tenement workshops, which reduced the power and labor standards of factory workers. In 1951, an ILGWU historian noted that control over the “outside system of production”—the contractors—had been key to upgrading garment workers’ standards.19 Now, the “outside system” of production is used by the big retailers and brand names to offset each advance by workers (anywhere) by lowering the conditions of other workers somewhere else. In this regard, the global sweatshop has been a canary in the coal mine—or, as the Police song goes, “first to fall over when the atmosphere is less than perfect.”20

 

Notes:

1. See Robert J. S. Ross and Kent Trachte, Global Capitalism: The New Leviathan (Albany: SUNY Press, 1990).
2. Annie Marion MacLean, “The SweatShop in Summer,” American Journal of Sociology 9, no.
3 (1903): 289-309; Duncan Bythell, The Sweated Trades: Outwork in Nineteenth-Century Britain (London: Batsford Academic Press, 1978). 3. Rinker Buck, “The New Sweatshops: A Penny for Your Collar,” New York, January 29, 1979. 4. See U.S. Department of Labor, Office of Public Affairs, “U.S. Department of Labor Compliance Survey Finds More Than Half of New York City Garment Shops in Violation of Labor Laws,” news release, October 16, 1997, available at www.dol.gov/opa/ media/press/opa/archive/opa97369.htm; and “U.S. Department of Labor Announces Latest Los Angeles Garment Survey Results,” news release, May 17, 1998, available at www.dol.gov/opa/media/press/ opa/archive/opa98225.htm (both accessed on September 16, 2010).
5. Robert J.S. Ross, Slaves to Fashion: Poverty and Abuse in the New Sweatshops (Ann Arbor: University of Michigan Press, 2004).  
6. Ibid.
7. Edna Bonacich and Richard Appelbaum, Behind the Label: Inequality in the Los Angeles Apparel Industry (Berkeley: University of California Press, 2000); and John Laslett and Mary Tyler, The ILGWU in Los Angeles: 1907-1988 (Inglewood, California: Ten Star Press, 1989).
8. For more information about this Bangladeshi garment factory fire, visit www.cleanclothes.org/news/45-deadin-bangladesh-garment-factory-fire (accessed September 14, 2010).
9. “Spectrum Disaster—Six Months After the Collapse,” Clean Clothes Campaign, October 5, 2005, available at www. cleanclothes.org/news/spectrum-disaster-six-months-after-the-collapse (accessed September 14, 2010).
10. “Twenty-One Workers Die and Thirty-One Are Injured Sewing Sweaters in Bangladesh for H&M, Mark’s Work Wearhouse, and Other Labels, ” National Labor Committee, March 5, 2010, available at www.nlcnet.org/reports?id=0002 (accessed September 14, 2010).
11. “Bangladesh Fetches $16.20 Billion from Merchandise Export in 2009-10 Fiscal,” People’s Daily Online, July 20, 2010, available at www.english.peopledaily.com.cn/90001/90778/90861/7073863. html (accessed September 16, 2010). 12. See Ellen Israel Rosen, Making Sweatshops: The Globalization of the U.S. Apparel Industry (Berkeley: University of California Press, 2002).
13. Gus Tyler, Look for the Union Label: A History of the International Ladies’ Garment Workers’ Union (Armonk, NY: M.E. Sharpe, 1995), 265.
14. Ibid., 266.
15. Import concessions depended on using U.S. textiles and yarn. See Kent Shigetomi, Kelsey Rule, and Danielle Osler, Eighth Report to Congress on the Operation of the Caribbean Basin Economic Recovery Act(Washington D.C.: Office of the United States Trade Representative, December 31, 2009), available at www. ustr.gov/sites/default/files/2009%20 CBI%20Report%20FINAL_0.pdf. 
16. For information about the principles of WTO agreements (and especially “national treatment”), see “Principles of the Trading System,” available at www. wto.org/english/thewto_e/whatis_e/ tif_e/fact2_e.htm (accessed October 1, 2010).
17. See Ross and Trachte, Global Capitalism.
18. See Robert J.S. Ross and Kent Trachte, “The Crisis of Detroit and the Emergence of Global Capitalism,” International Journal of Urban and Regional Research 9, no. 2 (June 1985): 186-217.
19. See Emil Schlesinger, “The Outside System of Production in the Women’s Garment Industry in the New York Market,” an unpublished study for the ILGWU, 1951; See also Tyler, Look for the Union Label.
20. The “Canary in a Coal Mine” lyrics are taken from the Police’s 1980 Zenyattà Mondatta album

 

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