Sweatshops are known to be a mass of workers mass-producing goods they may never be able to afford themselves. The sweatshop rose to meaning as work moved off the farm and into the city, and employers found a limitless amount of so called labourers to make their products. The low entry costs and high labour intensity linked with the textile industry tended to concentrate sweatshops in clothing production. As industrialization grew, labour markets tightened and workplace regulations strengthened, pushing the sweatshop out of the mainstream of the economy for the time being.
The dominance of free trade and globalization in the late 20th century has led to the rebirth of the sweatshop, in developing and developed nations. With approval and a helpful push from national governments, the sweatshop has returned, with conditions frequently as bad as when they first appeared. The US General Accounting Office defines “sweatshop” as an “employer that violates more than one federal or state labour law governing minimum wage and overtime, child labour, industrial homework, occupational safety and health, workers’ compensation, or industry regulation.
Even though the US General Accounting Office definition of “sweatshop” provides an accurate, legal interpretation of the term, the sweatshop can occur in many forms. In the words of historian Leon Stein, “The sweatshop is a state of mind as well as a physical fact… The sweatshop, whether in a modern factory building or a dark slum cellar, exists where the employer controls the working conditions and the worker cannot protest.” which maintains this sense of prejudice. Sweatshops can be traced back to the textile industry of England, New England, and New York in the 1840s. Prior to 1850, the Massachusetts textile industry employed more homeworkers than factory workers, appealing a largely rural population in non-agricultural labour. It seemed an unlimited supply of rural labourers and low cost of entry for firms made homework common and opened the system to exploitation. But it is the fact that a good deal of homeworkers in this country and in others exists solely because they can be forced to the lowest stages of misery.
Working from home created the first system of subcontract, by creating a three-tiered structure with manufacturers, who purchased the materials, at the top, workers who produced for piece rates in their homes at the bottom, and subcontractors in between. The outwork system represented a significant development in relations between labour and capital. One more item in a detached list of costs to be acquired in the cheapest market was to put into practice more obviously in the outwork system than anywhere else. In 1845, the chairwoman of a group of working women in New York said she knew of employers paying wages of between 10 and 18 cents per day. Homeworkers as young as 5 years old toiled 14 to 18 hours a day in these home-based sweatshops, paid by the quantity or by the day. As the 19th century advanced, work moved slowly out of the home and into the factory. An 1867 ad for the Weed Sewing Machine Company depicted a mother and daughter, in their home, sewing by hand in the candlelight.
The ad pitched its automated sewing machine as the liberator of these women, but conditions in the factories with improved technology were hardly better. The persistence of plentiful supplies of labour in the countryside allowed work to continue, but by the early 20th century, the fast leap of industrial development and urbanization caused the factory system to replace outwork. On the whole Factory workers earned better wages and laboured under better conditions than homeworkers, but in many cases, the location of the sweatshop merely moved from the rural homes to the urban factories. London garment workers at the start of the century were mostly young women, working from 12 hour shifts on Monday through to Friday, and from 8 hours on Saturday.
But even those at the top of the wage scale in the London garment industry could only just earn enough to feed, and clothe themselves healthily. 20th century people began speaking up about the conditions that people were forced to work in in these sweatshops, causing employers to get some grade of better conditions to work. In 1910, an agreement between the International Ladies’ Garment Workers’ Union and New York City cloak makers put in place an apparent breakthrough in the eradication of sweatshops.
The Procedure obliged employers to identify unions, establishing a complaint procedure for workers, and help with health and safety conditions in factories. Unions hoped that the agreement would spread throughout the textile industry and lead to the final expiry of the sweatshop. But just six months after the signing of the Protocol, a fire at the downtown Manhattan factory of the Triangle Shirtwaist Company left 146 workers dead, despite manager and fire inspectors’ knowledge that the factory was in violation of safety rules. Sweatshop workers would have to wait until the New Deal for any considerable alleviation of their dilemma.
Globalization has given an increase to a new and more complex form of subcontract, in which firms in advanced nations seek manufacturers in developing nations that can provide the highest quality product at the cheapest cost. Textile firms around the world have become more about marketing and design, so companies rely on foreign subcontractors for their production needs. The emergence of “manufacturers without factories,” stuck in the principle of lower production costs and higher profits, which shifted responsibility for workplace health and safety from the corporation to the subcontractor, leaving behind a largely unregulated system with encouraged labour mistreatment.
Often agents, who are not employees of the parent company and have no responsibility for labour practices, arrange subcontracting for clothing firms, allowing firms to produce their goods in factories they have never even seen. Sweatshops arise not only from subcontracting arrangements with multinationals, but also from national producers who take advantage of the low wages and slack labour regulations of their home countries. An hourly wage comparison in the garment industry in selected nations suggests the great likelihood of the emergence of sweatshops in developing nations:
Contrasts of purchasing power, rather than complete wage rates are more useful in determining workers’ standards of living. Several studies of workers producing for US sweatshops in Mexico have reported that workers at the Aluminium Company of America’s Ciudad Acuna plant earn around $21.44 to $24.60 per week, but a weekly basket of basic food items costs $26.87. Mexican GM workers earn enough to buy a pound of apples in 30 minutes of work, while GM workers in the US earn as much in 5 minutes. Comparisons of wage rates across time periods is exceptionally difficult, but subjective evidence suggests that today’s sweatshops workers receive even less of the fruits of their labour than in times before. British labour backers writing in 1907 offered an unusual explanation for the existence of London sweatshops, claiming that workers’ wages “depend generally far more upon the personality of the employer… than upon any difference in the quality or nature of the work.”
They note that wages are sometimes directly dependent upon the pay of the employer himself. Determination of hourly wage rates is often complicated by the extensive practices of “piece rate” wages, sub-minimum training wages for new employees, pay deductions, production bonuses, complex pay stubs, or no pay stubs at all, making it difficult for workers to know whether they have been paid correctly or fairly. In 1993 CBS report found Indonesian Nike workers were being paid below minimum wage, according to pay stubs. Though Nike nominally pays workers by the hour, they are penalized for failing to meet production goals. Vietnamese Nike workers forego their bonus if they fail to meet daily production goals, and can be fired if they fail three times.
A Nike plant in China deducts up to 40 per cent of workers’ pay, while another non-Nike Chinese plant deducts for using the toilet more than twice a day. Over the past decade U.S. firms and their subcontractors have faced protests from student groups, labour leaders, and some government officials for employing sweatshop labour. Most economists view so-called sweatshops as a benefit to Third World workers and recognize that the anti-sweatshop activists’ activities could reduce Third World employment and investment, thus making workers worse off. In response to the anti-sweatshop movement, economists in the Academic Consortium on International Trade (ACIT), led by Jagdish Bhagwati, circulated a letter to colleges and universities urging them to become aware of the downsides to anti-sweatshop movement demands before adopting any policies.
Forced labour can come about in various sorts, such as debt bondage, captive migrant labour, prison labour, and child labour. International attention started to focused on child labour recently after a Pakistani carpet slave, was murdered at age 12, the murder was allegedly ordered by company owners after the 12 year old spoke out on child slavery. He had been sold into slavery by his parents for $16 at age 4, and was chained then made to work 12 hours a day, 6 days a week until age 10, when he escaped and began to protest child labour. Other occurrences like this have brought to light labour and child labour recently, including: * In El Monte, California in 1995, 72 undocumented Thai workers producing clothing for stores such as Sears, Macy’s, and Filene’s were found locked behind barbed wire fences. They were forced to work 17 hours a day, earning 70 cents an hour and sleeping as many as 8 to a bedroom.
* Workers at a Chinese shoe factory are captives of the company’s 100 security guards, and are not paid wages. * Children in a Tangerang, Indonesia factory were found to be working for $4 per week (well below the Indonesian minimum wage), working 7-13 hour days in 1991. * Seventeen per cent of soccer balls produced in Pakistan was found to be made by children. * In the Philippine’s a three and a half year old was found making Rubber world thongs. In China forced and unpaid prison labour is very common. The International Labour Organization estimates 250million children between ages of 5 to 14 are working worldwide, about 12.5 million of work in export industries. The unofficial estimate of child labour in Indonesia is 3.3 million children of a total population of under-16 year olds of 69 million.
In Thailand the unofficial estimate is around 4million in child labour which represents 20% of Thailand’s under-16 population. The United States imports an estimated $100 million per year in goods produced by children in slavery or bonded labour, according to the New York Times. Safety conditions in sweatshop factories are regularly shocking. In one Chinese cutlery factory, 100 of the 400 workers are injured, and still work under the unsafe conditions, since they had been unable to find jobs elsewhere because of missing arms and fingers. An investigation into a fire at a toy factory near Bangkok showed that 188 workers had been killed in 1993; many safety laws were breached within the building. And because of the Government neglect towards such issues it allows the abuses to continue.
In Indonesia underfunding of labour code enforcement agencies and bribery of government factory inspectors, who number only 1 per every 3,895 factories, makes strict enforcement of labour laws almost impossible. Some factories that do not meet the criteria of a “sweatshop” nevertheless are repressive work environments, due to the humiliating treatment of workers. Physical, verbal abuse and other various forms of abuse have been reported in many factories; some of the abuses are isolated incidents, while others are orderly. Workers toiling under such conditions often have few avenues to address workplace complaints due to the weaknesses of collective bargaining laws and judicial systems.
The fast globalization of the economy and the decrease of trade barriers in the post-war era have set loose a system of wage arbitrage in which global corporations seek to minimize input costs, including labour, in order to maximize production and profits. The staggering economies of scale that result from this system has led to the creation of huge factories subcontracted by foreign multinationals, many of which have exhibited sweatshop conditions. A persistent global search by multinationals for the cheapest labour costs has exerted a downward force on wages in the developing world. Now three quarters of the countries are hosting US apparel companies and real wages have declined. A study conducted in Java found that in Indonesia 40 per cent of employers were paying less than the minimum wage, at a time when the Indonesian government conceded that the minimum wage was only 60 per cent of what a single adult needed to survive.
The re-emergence of the sweatshop in the post-war era, both in the United States and abroad, has been facilitated, not slowed, by the United States government’s aggressive free trade and free market policies. In the first round of the General Agreement on Tariffs and Trade in 1947, the United States won many exemptions from trade rules for the textile industry. Relaxing trade restrictions on textiles made it easier for the industry to move across borders in search of cheap labour, and encouraged importation of cheap textile goods to stimulate factories abroad. A provision in the US Tariff Schedule adopted in 1963 allowed for near duty-free offshore assembly of garments. At the same time, a wave of automation and relocation was sweeping the textile industry, fuelled by competition from Asian firms.
In the early 1960s, only 6 per cent of the textile industry was automated, a proportion which increased to 40 per cent by the late 1980s. Since automation could not easily spread to the labour intensive garment sectors of the industry, many US firms relocated their labour intensive production abroad, taking advantage of low wages in order to remain competitive. In 1980, 70 per cent of apparel purchased in the US was produced domestically, but by the early 1990s, the amount declined to only half. United States policy has continued to encourage the production of sweatshops through the relocation of textile firms abroad. Government officials in developing countries do understand the connection between labour costs and foreign investment, but any desire they have to protect workers is silenced by the requirements of economic growth. In the United States, the result of the emigration of apparel industry has been devastating.
Employment and real wages have fallen 17 per cent between 1978 and 1991. There are 860,000 apparel workers in the US today who earn less in real wages than back in 1955. The US apparel industry average wage of $19,225 tops only the average wages for the retail and fast food industries, among legal labour sectors. Wages in the illegal sector, which comprises a substantial portion of the US garment industry, are much lower. Once pushed to the margins of the US apparel industry, the sweatshop has been reborn in this scene of free trade: the GAO estimates that over one third of New York City’s 6500 garment shops are sweated, as are 4500 of Los Angeles’ 5000 and 400 of Miami’s 500 shops. Sweatshops are the inevitable by-product of a free market economy, a necessary stage in the economic development of a nation.
The reputation of the sweatshop in the economic history of the industrial nations, especially the United States and England, has led to an acceptance of the sweatshop as an essential evil that will eventually lead to better times for all. Yet by their definition, the sweatshop is an aberration from the legally accepted workplace environment. Sweatshops are not the natural result of an economic system, but the deliberate attempt by firms to exploit and marginalize their labour force, assisted by the help of governments. Rarely questioned is the role of governments in the persistence of the sweatshop. “Much of the poverty and economic disorder in the world today stems from the system we have tragically allowed to develop.
To reverse “the system we have tragically allowed to develop” requires that sweatshop workers organize to win better conditions for themselves and that governments, consumers, and people of developed and developing nations alike support them in their efforts. If workers become authorized to support themselves, the 21st century will see the establishment of greater legal responsibility on the part of governments, multinational corporations, and factory owners, replacing exploitation with justice. But so far that hasn’t happened. If anything there are massive growths in new sweatshops that have cropped up in the 21st century. Instead of in our backyard, these factories are located in squalid regions of Asia, Africa and South America. And still are driven by the relentless competition to reduce product costs.