Is There Any Way to Stop Wal-Mart & Co. from Sweatshop Profiteering?

By T. A. Frank, Washington Monthly. Posted April 29, 2008.

I remember one particularly bad factory in China. It produced outdoor tables, parasols, and gazebos, and the place was a mess. Work floors were so crowded with production materials that I could barely make my way from one end to the other. In one area, where metals were being chemically treated, workers squatted at the edge of steaming pools as if contemplating a sudden, final swim. The dormitories were filthy: the hallways were strewn with garbage—orange peels, tea leaves—and the only way for anyone to bathe was to fill a bucket with cold water. In a country where workers normally suppress their complaints for fear of getting fired, employees at this factory couldn't resist telling us the truth. "We work so hard for so little pay," said one middle-aged woman with undisguised anger. We could only guess how hard—the place kept no time cards. Painted in large characters on the factory walls was a slogan: "If you don't work hard today, look hard for work tomorrow." Inspirational, in a way.

I was there because, six years ago, I had a job at a Los Angeles firm that specialized in the field of "compliance consulting," or "corporate social responsibility monitoring." It's a service that emerged in the mid-1990s after the press started to report on bad factories around the world and companies grew concerned about protecting their reputations. With an increase of protectionist sentiment in the United States, companies that relied on cheap labor abroad were feeling vulnerable to negative publicity. They still are.

Today, labor standards are once again in the news. Barack Obama and Hillary Clinton have criticized trade deals such as NAFTA as unfair to American workers, and the new thinking is that trade agreements should include strict labor standards. Obama has cited a recent free trade agreement with Peru as an example of how to go forward. I hope he's right, but let's remember that NAFTA was also hailed, in its day, for including labor protections. Our solutions on paper have proved hard to enforce. Peru attempts to remedy some of the problems of NAFTA, but we're still advancing slowly in the dark.

In the meantime, as governments contemplate such matters on a theoretical level, what's happening on the ground is mostly in the hands of the private sector. Companies police themselves, often using hired outside help. That was the specialty of my company. Visit the Web site of almost any large American retailer or apparel manufacturer and you're likely to see a section devoted to "ethical sourcing" or "our compliance program." (Those are terms for making sure that your suppliers aren't using factories that will land you on the front page of the New York Times.) Read on and you'll often see that the company boasts of having a code of conduct that its suppliers must follow—a code of labor standards by which the factories in question will be regularly measured and monitored. Are they to be believed? Well, yes and no. Private monitoring, if done properly, can do a lot of good. But it's a tricky thing. A simplified story of Nike may be the best way to introduce the origins of the type of work I was in. In the 1960s, Nike (before it was named Nike) based its business on the premise that the company would not manufacture shoes—it would only design and market them. The physical goods would be produced by independent contractors in countries such as Japan or Taiwan, where labor was, at the time, cheap. In short, Nike would be offices, not factories. The idea was innovative and hugely profitable, and countless companies producing everything from sweaters to toys to exercise equipment have since adopted it. It is now standard.

The problem that arose for Nike and many other companies, however, was that the media, starting in the 1990s, began to run stories on terrible labor conditions in factories in Asia. When consumers started to get angry, Nike and many other companies were nonplussed. We're just buying these shoes, they said—it's not our business how Mr. X runs his factory. And they had a point. If, for example, I learned that my dry cleaner was paying his employees less than minimum wage, I might feel bad about it, but I doubt I'd spend hours vetting alternative dry cleaners for labor compliance. I've got too much else to worry about in life, including my shirts. But such musings hardly make for a great press release, and Nike's case included nasty allegations about child labor—twelve-year-old Americans playing with soccer balls sewn by twelve-year-old Pakistanis, that sort of thing. The company's stock value sank.

In this same period, the U.S. Department of Labor, led by Robert Reich, began cracking down on sweatshops within the United States and publicizing the names of firms who were their customers. Because of this, companies such as mine began to offer their services as independent, for-profit monitors of factory labor conditions. We would act as early-warning systems against shady suppliers who mistreated their workers. Based on the reports we provided, our clients could choose either to sever their relations with a given supplier or to pressure them to improve. Business at my old company is still going strong.

See more stories tagged with: labor, sweatshop

T.A. Frank is a writer in Los Angeles.

Liked this story? Get top stories in your inbox each week from AlterNet! Sign up now »