Why does this happen? Why does it continue? The answers: the culture of “profits before people” and in some cases government collusion. Many companies scour the globe to find the cheapest labor possible. They play countries off against each other in a bidding war for production contracts. In what has been dubbed “a race to the bottom,” the winning contractors and governments are the ones willing to reduce their workforces to levels of pay and working conditions that strain human endurance to the limit. Some governments turn a blind eye to labor law violations, and the international human rights treaties they have ratified, and instead leave workers with little choice but to fall in line.
Take Indonesia, where human rights observers have noted the presence of army units inside some of the factories where Nike’s shoes are made. Or Nicaragua, where workers were indicted by their government on charges that carry sentences of up to ten years in jail. Their crime: asking for an $0.08 increase per pair of blue jeans they assemble for retailers including Wal-Mart – jeans that sell in the US for $30 per pair.
Meanwhile, the accounting firms that companies (including Nike and Wal-Mart) use to monitor their factories – supposedly to ensure observance of international standards and corporate codes of conduct – often miss violations because their monitoring efforts are significantly flawed. Dr O’Rouke of MIT claims that auditing giant PriceWaterhouse Coopers, in its audit reports, failed to recognize workers’ rights and, in some cases, overlooked serious violations of health and safety standards. Although PWC officials argue that their monitoring uncovered violations of minimum wage, overtime and safety laws, their shortcomings clearly indicate inadequate procedures.
When business journalists caught Wal-Mart lying in its denial of any connection to one particularly dreadful factory, the company’s vice-president explained that it was because they were “defensive” about the sweatshop issue. Sweatshops are, indeed, indefensible. They insure that the great wealth created by the global expansion of trade and investment – touted by pundits the world over as the cure for poverty – remains with top corporate executives and shareholders while millions of workers barely survive.
Charles Kernaghan is the executive director of the National Labor Committee, an independent, non-profit organization focussed on the protection of worker rights.
Race to the Bottom
Hourly take home pay:
Can anyone live on these starvation wages?
The companies say, yes, for example, 60¢ an hour is a living wage in El Salvador, sufficient to raise a family. After all, El Salvador is not New York City.
We asked women workers who sew Nike garments in El Salvador if this was true. Could they survive on 60¢ an hour?
“No, it’s impossible,” they told us. “It’s a lie when the companies say that.”
Then they talked us through their daily expenses:
So, just getting back and forth to work and surviving costs them $2.97, leaving just $1.82 out of their daily pay of $4.79. The workers live in one-room hovels, 10 by 12 feet, sharing an outhouse and common sink with several other families. For this they pay $31.40 per month, $1.03 a day. That now leaves them with just 79¢ at the end of the day.
What do they do now? The cheapest supper for a family of three costs at least $1.14 – for rice, beans, tortillas, and coffee, and maybe the family splits a plantain. But they do not even have enough money for this. What about daycare, which costs $1.13 per day, or a child’s new shoes which cost $8.00?
expensive $75 Nike shirts are forced to raise their children on coffee
and lemonade, since they cannot afford milk. No one can live on 60¢ an
hour in El Salvador. It is a starvation wage. To climb out of misery and
into poverty, the workers would need to earn at least $1.18 an hour.
What would happen if Nike paid its workers $1.18 an hour rather that the
current 60¢ wage? Would the sky fall in on
the 60¢-an-hour wage, the women are paid 20¢ to sew each $75 Nike
shirt. At $1.18 an hour, the workers would be earning 391/2 cents for
every $75 Nike shirt they sewed. This
means their wages would still come to less than half of one percent of
the retail price. Nike could surely afford that.
But is does not have to be that way
This is not a boycott
It is the
opposite. This is a struggle to keep jobs in the developing world, but
jobs with dignity, justice, and fair wages.
We are winning!
Last year the
companies said they would never agree to public disclosure, but that is
exactly what university students have won on over a dozen campuses
across the US including University of Michigan, Duke, and Georgetown. If
a company wants to manufacture goods for these universities, it must now
publicly disclose the names and addresses of its factories.
is an active social movement of labor, religious, student, solidarity,
and community organizations across the US, working together to end child
labor and sweatshop abuses. Just five years ago, this movement did not
exist. We have all come a long way.
JC Penny, Victoria’s Secret, IBM, Toys R Us, and TWA are among the US corporations that have profited by employing prisoners. Put together long mandatory sentences for minor drug offences, a strong racial bias, prisons run by corporations for profit, the sale of convict labor to corporations, and a charge for prison room and board and you have a modern system of bonded labor – a social condition otherwise known as slavery.
National Labor Committee
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