LIVING-WAGE PROVISO STALLS ANTI-SWEATSHOP TASK FORCE
Byline: Joanna Ramey
WASHINGTON — The White House anti-sweatshop task force is stumbling again and is likely to miss an early November deadline set by President Clinton to complete a plan to monitor conditions at apparel and footwear factories worldwide.
A major roadblock facing the panel representing industry, labor and human rights groups is one that’s persisted since its creation 14 months ago: Should manufacturers and their contractors covered by the monitoring plan be required to tie wages to a cost-of-living index, even if wages would then exceed either the prevailing industry wage or legal minimum established in a given locale? And, if so, how do you determine the wage and how many people it should be able to support?
The battle lines remain the same: The panel’s 14 labor, human rights and consumer group members want a so-called living wage to be part of the monitoring plan, and the seven company members say no. It’s a conflict that one panel member, Kevin Sweeney, director of corporate affairs, Patagonia Inc., said could kill the task force’s work altogether.
Sweeney’s comments were included in a speech early this month before a meeting at the Notre Dame Center for Ethics and Religious Values in Business, in which he said he was “not currently optimistic about the future” of the task force, known as the Apparel Industry Partnership. The speech gave a deep and unusual look at the debates behind the closed doors of the task force’s meetings.
Other industry task force members are Liz Claiborne, Nicole Miller, Nike, Reebok, Hanover Direct and Phillips-Van Heusen.
“After its initial accomplishments, the group has done very little since the White House press conference [in April] announcing agreement on the code of conduct. It is a long time to go without momentum,” said Sweeney, citing the living wage issue as his biggest concern. The code, heralded as a first for a U.S. industry, sets workplace standards for companies to follow at their factories and contractors.
Sweeney is a supporter of a living wage eventually being employed globally — citing the existence of hundreds of millions of workers trapped in poverty — but he said the task force isn’t the venue to do the job.
“Demanding that it do so will lead to the failure of the Partnership before its work to end sweatshops has even begun,” he said. “The living wage issue goes well beyond our industry, touching nearly every industry in every part of the globe. It is an appropriate battle for governments and trade unions to lead; it is simply too massive of a goal for a partnership that currently has half a dozen companies.”
Paying a living wage has become the rallying cry for union, human rights and consumer groups in their campaign to improve life in Third World countries, where they say U.S. companies take advantage of low wages in order to reap higher profits. They reason that if workers can’t feed their families and save for the future, then they will remain trapped in a hand-to-mouth existence that in many parts of the world also means living in squalor.
Apparel and footwear companies and retailers, with goods produced at thousands of contractors worldwide, generally bristle at the idea of pegging worker pay to a living wage index and view economic development as an issue to be attacked via local governments, not industry. Company officials — while acknowledging wages are an issue to be addressed — are also wary of pay being set artificially high in relation to a country’s economy. They also argue that in many cases, particularly among brand-name manufacturers, wages are usually set above the legal minimum. They feel that the most feasible step in improving wages would be to assure that all contractors pay their local minimum wage.
After pressure from the administration to compromise during an earlier stalemate, the task force, in its code of conduct unveiled in the April White House ceremony, excluded a so-called living wage. Task force members from union, human rights and consumer groups agreed to back down on a living wage in exchange for companies agreeing to include a 60-hour maximum workweek in the code, among other things.
But the code of conduct, while being praised for such things as guaranteeing the right to organize, was soundly criticized by human rights groups, which have dogged manufacturers and retailers over the last six years on the sweatshop issue. Without a living wage, a contractor monitoring program is hollow, they say.
At a minimum, pro-living-wage panel members, led by the textile union UNITE, want the task force to undertake a living wage study and make a commitment to eventually implementing the concept, according to sources.
The study would be commissioned by a joint industry-labor-human rights association being created by the task force to oversee the contractor monitoring program. Companies joining the association would agree to follow the code of conduct and have their factories and contractors inspected for compliance by association-approved monitors.
Task force co-chair Linda Golodner, president, National Consumer League, said implementing a living wage can be realistically achieved, although “we in the nonprofit, human rights and consumer groups all recognize it’s not going to happen overnight.”
“It’s a long process, many years,” she said.
Although not an official member of the task force, Maria Echaveste, director of the Office of Public Liaison who previously headed up Labor’s anti-sweatshop effort as Wage and Hour Division administrator and has kept abreast of the panel’s progress, said implementing a living-wage system would be extraordinarily complex. Echaveste and other administration officials, including Labor Secretary Alexis Herman, continue to press the task force to compromise and not walk away from the table.
“The notion you could set up a whole structure and determine [a living wage] in all the various places where people operate factories is a mind-boggling task. Some people think that’s the way to go, but let’s not underestimate how huge a task it is,” Echaveste said.
Sweeney said the task force needs to set aside the living-wage issue and focus its efforts on the massive task of rectifying poor workplace conditions in the myriad of countries and contractors producing garments and footwear for the U.S. market. By doing so, he said it’s the only chance to get more companies to sign onto their effort and thus realize the panel’s goal of bringing uniform labor standards to manufacturing worldwide.
So far, two apparel manufacturers — global innerwear giant The Warnaco Group and a California sportswear firm Karen Kane Inc. — have dropped out of the task force, citing concerns the panel is creating an unworkable bureaucracy and that their own monitoring efforts are sufficient. Other manufacturers, as well as retailers, have cited similar concerns in rebuffing overtures to join the panel made by task force members, Labor Secretary Alexis Herman and others in the administration.
“Currently there are but a handful of corporations participating. If the group focuses very clearly and exclusively on the goal of eliminating sweatshops, the number of participating companies can grow substantially,” Sweeney said, advocating the particular need to bring retailers on board.
“There is a growing concentration of large corporations at the retail level; the five largest retail companies now account for more than 50 percent of total retail sales in the U.S. This could mean that the partnership may be only five commitments — admittedly not easy ones to gain — from affecting an overwhelming majority of the garments sold in the U.S.,” Sweeney said. “In five years, it is quite possible that nearly every garment sold in a retail chain of any reasonable size would be made under the proposed code of conduct. That would be a great accomplishment.”
Conflicts within the task force largely reflect those in the greater sweatshop debate, where suspicions of manufacturers and retailers run high among labor, human rights and consumer groups — a process of “demonizing” that Sweeney said is also keeping other companies from supporting the task force’s work. He also cited as particularly unproductive the criticism of task force member Nike by human rights groups of its contractor monitoring efforts.
“When a group has made its name attacking Nike, it’s difficult for that group to say anything positive about an effort in which Nike is playing a major role,” Sweeney said. “And I would add that I find the improvements Nike is making in its practices to be impressive.”
Finger-pointing within the panel is also getting in the way of its mission, Sweeney said. “There is still a great deal of the skepticism that reigned when we started this process,” Sweeney said. “The different factions inside the group will give different reasons for the lack of movement.
“Some will say this is because the corporations are not interested in moving beyond the minimum requirements and will not, ultimately, sign onto an operational plan that does not allow them to fully control and substantially limit the external monitoring component,” he said. “Others say the human rights organizations are focused on how their organizations can make money by providing external monitoring functions. And others will say it is being dragged out by a split [among human rights and labor groups] and that it is impossible to expect a major U.S. trade union to allow the process to succeed, given that this process might ultimately allow an American consumer to feel good about buying a product made overseas.”
Sweeney said another disincentive facing companies to sign on to the task force is the expected cost of hiring outside monitors for their contractors. Although the association being created by the task force plans to award participating companies the right to carry “No Sweat” labels, any competitive benefit a label might create and outweigh monitoring costs is difficult to forecast, he said. In fact, he said industry members on the task force said their companies aren’t even planning to employ a “No-Sweat” label and nonetheless expect to follow the task force’s blueprint.
“It is important to recognize that, while it is clear there could be substantial economic costs for joining the partnership, the economic benefits of joining are not yet evident,” he said.
The other task force co-chair Roberta Karp, vice president of corporate affairs at Liz Claiborne, acknowledges disagreements among panel members, but expects the group to eventually reach a consensus.
“Things have always been and continue to be tense. Notwithstanding this, I am optimistic. I have a lot of confidence in this group,” she said in a phone interview.
“I think we are realizing now we could talk on and on about this. It is time to stop talking. It is time to compromise and start doing. We need to get something on paper. People have to realize this is an ongoing process, given the complexity of these kinds of issues,” Karp said. “I think the real challenge is to get others in the industry to buy into the process. If no other companies come once the blueprint is developed, it will be a tremendous loss.”
Even if task force members resolve their differences over the living wage, there are other obstacles to overcome before they can report back to Clinton, according to sources.
The number and frequency of contractors to be watched by external monitors, which can range from accounting firms to human rights groups and must be accredited by the association. Regarding a company’s own role in monitoring, the task force has already agreed to a series of internal steps companies must follow to keep tabs on their contractors.
Whether there should be a public announcement when a company is kicked out of the association for not rectifying problems at its contractors into compliance with the code of conduct.
The makeup of the board of directors governing the monitoring association. The panel is debating whether board membership should be evenly split between industry and labor-human rights representatives, or whether one side should be given the majority number of seats.
Funding of a full-time staff to oversee the association’s operations. Participating companies would pay annual dues, but a formula, likely to be based on annual revenues, has yet to be decided on. Also still open for discussion is whether labor unions and human rights groups participating in the association would also have to pay dues.
Whether a company or the association gets to choose which external monitors to use. The panel has already agreed that these monitors can’t otherwise work for a company, a stipulation of labor and human rights groups worried about conflicts of interest.