The Consortium

Free Trade vs. the 'Golden Mountain'

By Stacey L. Bradford

NEW YORK -- In the sweatshops of New York's Chinatown, among thousands of Asian immigrant workers, one of the fears about global free trade is coming true. As women hunch over sewing machines, stitching together garments in silent competition with other workers in factories from Haiti to Shanghai, U.S. authorities and even American labor unions are quietly conceding the fight to enforce legal minimum wage standards and other labor protections.

"The intention is to help workers," explains Jack Kelley, assistant district director of the New York Department of Labor. "But enforcing the minimum wage could put a lot of the garment shops out of business. Many third parties look the other way to keep shops in the fold."

A two-month investigation by The Consortium found that increasingly in the U.S. garment industry, the legal minimum wage and union-negotiated pay standards exist on paper only. In some cases, multiple sets of books are kept to conceal the sub-minimum wages and the failure to pay overtime. The Chinese Staff and Restaurant Workers Association, a community organization based in New York's Chinatown, estimates that as many as 80 percent of Chinatown's 25,000 garment workers now earn less than the minimum wage.

Typical was the case of Mrs. Yeng, a petite woman with tired-looking eyes who spoke cautiously and did not want to give her first name. Now in her 40s, she legally emigrated from China to the United States in 1989. She made the journey not to get rich, but to be reunited with her parents and give her two children a chance to pursue the American Dream, an ambition which the Chinese call the Dream of the Golden Mountain.

Within two weeks of arriving in the United States, Mrs. Yeng's sisters had set her up with a job in one of the 500 garment factories in Chinatown. She began working six days a week, getting paid for each piece of clothing she finished sewing. She saw her children only late at night and on Sundays.

"I would like to have the opportunities that are here in America," said Yeng through an interpreter. "But the work is very strenuous."

Mrs. Yeng's piece-work pay garnered her just a few dollars an hour, barely enough to pay rent and feed her children. There also were deductions for her monthly membership fee of $17.60 to her union, UNITE. But she voiced no complaint about the low wages or the lack of overtime and holiday pay. She counted herself lucky to have a job and union-negotiated health benefits. Still, the low pay gives Mrs. Yeng little hope for getting ahead or building a retirement nest egg. "I don't think I'll be quitting anytime soon," she remarked wistfully.

Minimum Promise

In celebrating last year's hike in the minimum wage to $5.15 an hour, then-Labor Secretary Robert Reich had offered a brighter promise. "The people who clean offices at night, ... serve the food, cut and sew our clothes, pick the crops, sweep the floors, care for our children, our sick and our elderly" will now be able "to afford a warm winter coat, or books and transportation for school," Reich declared.

But that has not been the reality for many who sew the clothes. "If you mention minimum wage to a [Chinatown garment] worker, they just laugh," commented Tinh Dong, an organizer with the Chinese Staff and Restaurant Workers Association. "They know what the minimum wage is. And they know it wasn't meant for them. If they complain, they get fired and it would be a month before an inspector even goes out to the factory."

Kwong Hui, another organizer, said most of Chinatown's garment workers "pay union dues, but they do not get union wages." Instead, they find themselves "trapped and deceived," afraid to complain because they might be easily replaced and blacklisted. Many of the workers are recent immigrants who have scant resources to fall back on and who may fear deportation.

Unions that represent the garment workers admit that pressure from global competition has driven actual wages to possibly half the negotiated union standard of $6.35 an hour. The unions' acquiescence to that reality also comes from fear that enforcing the higher wages would lead to the factories moving offshore. The unions try to compensate for the substandard pay by arranging fringe benefits: health insurance, child care and English lessons.

"We supplement our ability not to negotiate wages with social programs and support," acknowledged Susan Cowell, a vice president of the Union of Needletrades, Industrial and Textile Employees (UNITE), which represents 90 percent of Chinatown's garment workers. Many immigrant workers are happy with the social programs, which they had come to expect in China where the government provided the services for free, Cowell said.

Even, the sweatshop owners present themselves more as victims of free trade than as victimizers of their workers. And that position drew some support from the Harvard Civil Rights-Civil Liberties Law Review in a summer 1996 article. The review blamed the intense wage pressures in the garment industry on transnational clothing corporations that have set manufacturing price requirements so low that to meet them, sub-contractors must pay less than the minimum wage. But the article noted that by staying at a legal arm's length, the corporations also protect themselves from lawsuits that might be brought by state authorities for violating wage standards.

Frustrated Officials

Faced with these harsh pressures of this global marketplace, government officials also are floundering in pursuit of solutions. In New York, the state Labor Department has tried to shame retailers into putting countervailing pressure on the manufacturers. When the department learns that clothing is manufactured by sweatshop labor, officials accuse the retailers of accepting "hot goods" produced by labor "stolen" from the garment workers. But this approach is little more than a public-relations strategy, lacking any legal force.

"What we're seeing in the garment industry is people working really long hours, maybe 80 hours a week, and getting sick, developing health problems," said union organizer Tinh Dong. "When these women get to be 35 or 40, it gets hard for them to use their hands, to walk, to sit for long periods of time. Then their children have to go to work in the factory to provide for them. It wasn't always this bad."

But many Chinatown garment workers share the fear of closed shops that might result from enforcing the law. They speak little or no English and have few marketable skills. Others are accustomed to working for low pay because they are recent arrivals from mainland China's Fujian Province where pay is substantially below what they can earn in the United States.

Undocumented immigrant workers are even more vulnerable. Many still owe for passage to America on overcrowded ships, a service for which smugglers charge up to $30,000. The immigrants must pay off that debt in three to five years. So, they work like modern-day indentured servants, handing over weekly installments to Chinese gang enforcers -- debt collectors known as "snake heads."

To achieve better working conditions, union organizer Kwong Hui believes the workers must first let themselves feel more outrage. "If they saw themselves as slaves, it would be the first step toward their liberation," he maintained.

New York labor official Kelley agrees that a big obstacle is getting cooperation from exploited garment workers. "They are afraid to speak up," Kelley told The Consortium. "They may not pay taxes. They may be here illegally. Or they may have a family relationship with the boss."

Surprise Visits

Labor Department investigators do conduct unannounced "walk-ins" at factories, Kelley said. During such raids, the inspectors question workers about their pay levels and whether they are owed back wages. But the investigators are hamstrung if the workers do not cooperate or if the shop's books do not record overtime worked.

Sometimes even if workers insist they don't work overtime, the inspectors will wait outside the shop to see when workers leave the factory, Kelley said. If the actual hours do not coincide with the reported hours, the investigators will conclude that the books are doctored.

"It is common practice for garment shops to keep two sets of books, even three," said Kelley. But even when caught, the factory owners often will just close one shop and open a new non-union factory under a different name, maybe in Brooklyn. There, workers will receive even lower wages and no union-negotiated health insurance. Some garment manufacturers will move the jobs even farther away, to sweatshops overseas.

Ironically, New York City was where some of the most dramatic battles against exploitative sweatshops were fought. From the 1880s through the first two decades of the 20th Century, European immigrants labored long hours in crowded, hazardous garment factories. The dangers became a national scandal in 1911 when a fire swept through the Triangle Shirt Factory and killed 146 workers who were trapped in the building.

Over the next several decades, labor and safety reforms gradually eliminated that archetypal sweatshop from New York City and across the United States. By the 1950s, the pay of unionized garment workers rivaled the earnings of auto workers.

But over the past half century, the trend reversed as trade barriers dropped around the world. With lower tariffs and modern transportation, the high-fashion New York garment industry could contract out its manufacturing to plants in the Philippines, China, Indonesia or the Caribbean Basin, to countries where workers would labor at their sewing machines for well below $1 an hour.

Lost Jobs

Tens of thousands of jobs disappeared from the New York garment industry. From the 275,000 well-paid jobs in the 1950s, the number dropped by three-quarters, to 70,000 today. To save those surviving jobs, state officials and union representatives have felt compelled to tolerate sharp reductions in pay levels and other legal protections.

Some worker advocates, however, contend that this race to the bottom isn't necessary. A "fashion forum," staged last year by Labor Secretary Reich, presented data suggesting that enforcement of minimum wage and safety regulations would raise the cost of an article of clothing by only a few cents, a tiny fraction of its overall cost.

For years, however, free trade critics from rightist populist Patrick Buchanan to consumer advocate Ralph Nader have warned that free-trade greed would preclude even that modest sacrifice against the bottom line. The critics argued that unrestricted free trade eventually would make the enforcement of U.S. laws difficult, if not impossible. The trends spotted in New York City's new sweatshops tend to corroborate those warnings.

In April, President Clinton sponsored a conference that led representatives of clothing and shoe companies to accept voluntary guidelines concerning wages and working conditions at their factories or those of contractors. The guidelines propose a maximum 60-hour work week, but are vague about minimum wage standards for workers in poor countries. The plan also would send monitors worldwide to inspect factories and award seals of approval to companies in compliance.

(c) Copyright 1997

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