21st Century Water Cooler

How the Blue Jeans Business Works in the Global Economy

From Belgium

Preamble

In the last section we took an overview of the workings of the global economy. Here we will look at the micro effects of globalisation and talk about the daily routine of a Chinese sweat shop worker. We will then appreciate the true cost in human terms of those cheap imports. Much of this is taken from the documentary film China Blue. Then we will go on to see how household brand names in the blue jeans sector operate their businesses.

An Individual Case – The Life of a Chinese Worker in the Global Economy

At sixteen years of age, Jasmine was a tad older than many when she left her village to become one of China's' 110 million internal economic migrants. After two days and two nights train journey she arrived in the city of Canton, part of China's industrial south with 100 Yuan given by her father and all of her world contained in a back pack and a green plastic bucket. Pride filled her heart when she found work at a blue jeans factory in a nearby town. Now she had left her childhood behind and could help to support her aging parents. Her duties were as a loose thread cutter and lint remover and right at the beginning it was explained that she would be working seven on seven and there would be overtime. It was shortly afterwards that the reality of her situation began to set in. Mainly because of the level of overtime required it was necessary for her to live on the premises. Her dormitory on the third level, was shared with twelve other girls whose age ranged between 14 (2 years below China's legal limit) and 19. Her bed was a mattress inside a concrete crate structure with a pull back curtain on the open side. All personal washing and washing of clothes was done in this room and all water had to be brought up by hand in buckets. Living expenses and meals provided from a canteen were deducted from her meagre pay. Work began at 0800 sharp and after learning the job it was straight into production and gruelling overtime. It was here that Jasmine learned that she must work a month in hand and if at any future time she left for any reason the boss didn't like this would probably be forfeited. Still all was not so bad, if the overtime went past midnight, which was common, the boss would provide them with a free meal. The pace was gruelling and the mountain of jeans in front of her never went down. After several weeks the constant workload began to tell on her. Because she could be fined for falling asleep on the job, she slipped out of the factory gate one night to buy a high energy drink to keep her going, got caught on her return and was fined two days pay as an example to the others. Colleagues resorted to clipping their eyelids open with clothes pegs. Sometimes to provide continuity of work, the boss would take orders at close to cost price and then would resort to cutting the workers hourly rate. If the girls ever missed a deadline the boss would become angry and cancel a days pay for the whole factory. On a wall on a bend in the stairs to the dorm stood a notice which read "If you don't work hard today you will work hard tomorrow looking for another job". For all of this Jasmine accepted her lot with youthful cheerfulness. Three things kept her going, the good camaraderie with the girls in her dorm; memories of her family and village life and her diary in which she wrote endless pages of half fairy story, half super hero comic strip tales, thereby exposing her youth to view. It gave her pride to send her father his 100 Yuan back. At one US dollar per pair of jeans allocated to the workforce of between 25 – 30 people, her hourly rate amounted to about six US cents. With overtime this left her with about a dollar a day. The only time Jasmine's cheerful facade cracked was at the New Year holiday when she was the only one who could not afford the train fare back to her village.

The factory owner allowed clandestine filming of China Blue within his factory for two reasons. Firstly he was led to believe that the film was about him as one of the new breed of Chinese entrepreneurs, and secondly he was proud of his factory and considered himself to be very advanced and fair minded towards his employees compared to other factory owners in the area.

The Blue Jeans Business as an Example of the Global Economy in Practice

Are you wearing blue jeans today? Is the brand a household name? If it is then the chances are that they were made in a sweat shop in China, Indonesia, Mexico or another third world country. They could even have been made with sweat shop labour in Los Angeles with a "Made in America" tag sewn in and you wouldn't even be aware of it. Whether you paid $20 or $200 for them, they all cost around $5 at the factory gates, out of which the total workforce gets a $1.00 share. The rest of the money goes towards advertising, distribution and store costs and the back pockets of the executives. Price alone is not an indication of quality or a garment made with social morality. It is not even the factory bosses who are taking the icing off the cake; multinational purchasing and procurement departments play one factory owner against another with all the subtlety of a Bronx mugger, sometimes beating him down to cost price or less. Have a look through this short list and see if you can find your favourite brand here.

The Limited Inc

Price range $59.50 - $98.00

Buys from sweat shops around the world where young girls live in cramped dorms and work up to 70 hours a week.

TLI washed its hands of the whole business by saying "Limited Brands holds its employees, suppliers and vendors strictly accountable for compliance with all applicable laws and our own business policies, including those relating to labour standards". In 2003 The Limited Inc settled a lawsuit which accused it and other multinational brands of forcing thousands of garment workers in Saipan to work more than 12 hour days, seven days a week, in a "racketeering conspiracy" that required workers to sign contracts waving their rights. By settling The Limited did not admit any wrongdoing.

The Limited owns the following brands: The Limited; Express; Bath and Body works; Victoria's Secret, Structure; Lane Bryant and Abercrombie and Fitch.

Tommy Hilfiger

Price range $62.50 – 125.00

Mexican workers reported working in slave labour conditions earning $40 / week for 10 h + days. Workers who tried to unionise were fired. In response, a statement from Tommy Hilfiger said,"I think it is absurd people make clothes in places in the world that are not of US standards".

When the Tarrant factory in Mexico got itself into a wrangle over unjustly firing workers, Tommy Hilfiger responded by quitting Mexico in a classic cut and run exercise to relocate in other parts of Latin America and Asia where sweat shops abound.

Tommy Hilfiger pays its factory floor workers an hourly rate of between 23 cents and $1.75. CEO Tommy Hilfiger's hourly wage is $10,769

Guess?

Price range $79 - $168

"Guess?" ran an estimated 80 sweat shops in Los Angeles employing mostly Latina and Asian women. It paid workers less than the minimum wage for 10 – 12 hour days.

In response to criticisms, the company did not improve conditions but instead ran full page ads in major American newspapers proclaiming "Guaranteed 100% free of sweat shop labour" and it even sewed "Sweatshop Free" labels into its garments.

In 1992 "Guess?" contractors were accused of not paying their employees the minimum wage or overtime. "Guess?" recompensed the workers but was again soon busted for operating illegal sweatshops. In 1996 when workers tried to organise "Guess?" cut and ran to Mexico and Latin America to avoid labour abuse citations. The company still advertises itself as "All American".

Levi Strauss & Co

Price range $14.98 - $192.00

Saipan is a US commonwealth exempt from American labour laws. Companies who operate are legally entitled to sew "Made in America" tags into their garments. Sweat shop workers there were forced to pay recruitment fees of thousands of dollars. To work off the debt they were kept in indentured servitude. In 2002, 26 of Americas' largest clothing retailers including Gap, Target and Lane Bryant were found guilty of sweat shop abuses, Levi Strauss was the only company that refused to settle. Linda Butler for Levi Strauss responded "We believe we can operate profitably and with principles at the same time. We've done that for many years. A business needs to be profitable. The question is how does one implement tough business decisions with compassion, while avoiding decisions that that have a negative impact on stakeholders?" How indeed!

In 1992 the Washington Post exposed the company of sidestepping the sweatshop issue altogether by having their jeans made by Chinese prison labour. Ten years later the famous all American brand quit America in favour of China and the third world.

In 2001 its workers in Saipan enjoyed an hourly rate of $3.00. Levi Strauss's CEO Philip Marineau had a yearly income of $25.1 million, amounting to $11,971 / hour.

Wal-Mart

Price range $8.00 – 19.94

20% of Wal-Mart's business is conducted in 48 Third World countries outside China. If Wal-Mart was a country it would be China's fifth biggest export market ahead of Britain and Germany.

A Nicaraguan jeans inspector for Wal-Mart inspected 20,000 jeans each week for an hourly wage of 40 cents. Other workers in the Philippines were forced to work 24 hours straight for the No Boundaries brand. In Bangladesh, children aged between nine and twelve have been found working in Wal-Mart sweatshops. In Honduras children worked up to 13 hours a day for 25 cents an hour sewing jeans which sold for $20.00 in the USA.

Wal-Mart's official statement on sweatshops states "Wal-Mart strives to do business only with factories run legally and ethically". Obviously they are not striving hard enough.

Workers who make Wal-Mart products regularly experience health problems and labour violations. Including overtime without pay and wage rates up to 30% below the countries minimum. Wal-Mart will not terminate its contract with any factory even if it is found to have violated Wal-Mart's own code of conduct. It is only if that particular company fails inspections three times in a row that the contract will not be renewed. With annual revenue of $250 billion Wal-Mart is the world's largest corporation making up 2% of USA's GDP.

Are There Any Ethical Companies in the Business?

All of the above has probably left you asking just that question. Two of the following three companies are reported to be American, the other is Canadian; they are fully unionised and genuinely sweat shop free. They are not major brands, in fact you may not have heard of them. As one CEO put it "If we give it to the workers then we cannot spend it on advertising."

Diamond Gusset Jeans

Union Jean Company

No Sweat

Sources

China Blue from PBS Independent Lens:

http://www.pbs.org/independentlens/chinablue/film.html

Guess?:

http://www.pbs.org/independentlens/chinablue/guess.html

Levi Strauss & Co:

http://www.pbs.org/independentlens/chinablue/levis.html

The Limited Inc:

http://www.pbs.org/independentlens/chinablue/limited.html