FEDS VERSUS STATES: SWEATSHOPS ON WANE OR RUNNING RAMPANT?

Byline: Kristi Ellis

WASHINGTON — The always unclear status of sweatshops has become even murkier.
Federal labor officials claimed credit last week for improvement in compliance with a wide range of labor laws in New York and San Francisco in 2001, but New York state labor officials presented a much different story with their 2001 garment investigations.
This confusing state of affairs has spurred a heated debate over whether enforcement at the state and federal levels is curbing rampant labor law violations in the garment industry. The numbers are often so disparate that many labor and industry groups said they have little confidence in their accuracy.
Additionally, as long as federal investigators continue to investigate only registered shops in their biannual surveys, many industry leaders contend they are ignoring a big part of the problem — the unregistered shops that fuel the underground.
“There is no doubt there continues to be a significant underground economy and by nature that is hard to count,” said Susan Cowell, a vice president of UNITE. “Any statistics on sweatshops need to be taken with a grain of salt because [they are] a moving target.”
The U.S. Department of Labor stands by its recent 2001 garment compliance survey of New York and San Francisco, which revealed that contractors have dramatically improved compliance of labor laws over the past two years.
In contrast, New York’s state’s Labor Department Apparel Industry Task Force, which investigated a much larger pool of contractors — 1,357 to be exact — showed little improvement in compliance in 2001 and also turned up 21 child labor violations, nine of which have so far resulted in penalties.
“It’s very difficult to compare our survey to theirs,” said Tammy McCutchen, the federal DOL’s wage and hour administrator. “New York state laws can be more stringent than ours.”
She said New York’s child labor laws, for example, are stricter than federal laws and noted there are variations in overtime and minimum-wage laws between the state and federal labor departments. McCutchen also pointed out that federal investigators found no evidence of child labor in New York in the 1997 and 1999 garment surveys. She admitted the differences between state and federal laws are “very confusing” to “new Americans” running businesses.
“They might be in compliance with federal laws but not state laws,” she said. “We need to work closely with states to provide compliance assistance to employers so they understand both sets of laws.”
A spokesman for the New York State DOL was quick to point out that child labor violations in New York’s garment industry in 2001 were half of what they were in the department’s 1998 survey.
“Statistically, I don’t know if sweatshops are on the wane, but I think compliance measures are helping,” he said. “We have the tools to make this happen and we are doing the best to make it happen.
New York Gov. George Pataki added 10 more apparel investigators last year, which brought the total to 40, to New York’s Apparel Industry Task Force, which was created in 1987 to “help rid the garment industry of illegal sweatshops.”
“We are getting more inspectors out on the street and they are multilingual in everything from Vietnamese to Korean and Chinese,” the spokesman said. “That is all part of educating the employer and employees.”
New York-based Garment Industry Development Corp., which specializes in compliance assistance and contractor training, recently launched a new program called the Apparel Industry Compliance Partnership, in conjunction with state and federal labor agencies, apparel manufacturers and UNITE in an effort to educate contractors.
Linda Dworak, president at GIDC, said poor business practices often lead contractors into trying to cut corners and violations.
“Most contractors operate on very small margins and, in many cases, contractors don’t have much control and it comes down to the price being paid,” Dworak said. “Although these types of compliance efforts aim at strong-arming contractors into being legal, that can never be the whole answer because there is a structural problem related to the price of the garment.”
Meanwhile, the federal survey of Los Angeles in 2000 is more in line with the state’s garment enforcement results in 2001, which showed deterioration in conditions.
The federal survey revealed that only 1 in 3 garment contracting shops were in compliance with federal labor laws. Its findings indicated a step backward in industry compliance since the 1998 survey.
On the other hand, the overall compliance rate in San Francisco, a much smaller garment center, improved and stood at 75 percent in Labor’s 2001 survey.
The greater Los Angeles area is the largest garment production center in the U.S. It employs 105,700 apparel and textile workers, compared with 55,100 in greater New York through February, according to Labor, and 7,800 in the three surrounding counties of San Francisco, San Mateo and Marin.
According to California’s division of labor standards enforcement, investigators found increases in violations and four child labor violations statewide in 2001. The agency does not break out the cities. Of note, investigators inspected 1,180 shops — an increase of 208 — in California in 2001 versus 2000.
Industry consolidation, a recession, increased monitoring, unionization, the move to offshore production and a variety of other factors feed the debate over whether the apparel industry is cleaning itself up.
Bud Konheim, chief executive officer at Nicole Miller, said sweatshops appear to be on the demise. Konheim, who participated in the White House antisweatshop task force, formally called the Apparel Industry Partnership in 1997, claimed demand is so low, due to the economic slowdown, that sweatshops can’t survive.
“My sense of the recession and bad economy is that instead of encouraging sweatshops, it encourages better-made, quality products in the U.S.,” said Konheim. “That makes sweatshops or shadow employers irrelevant.”
He claimed that the “cheap part of the business in New York has dried up a little.” Sweatshops proliferate when there is a giant demand for goods, Konheim argued.
“All of a sudden, contractors can’t fill orders [during boom times] and they look for subcontractors,” he added.
In addition, manufacturers and retailers have moved significant portions of production offshore, which depresses business domestically. Labor’s McCutchen, however, argued that a bad economy provides more incentives not to comply.
“When there is a recession, there is less money to be spent and people take short cuts,” she said.
Cowell of UNITE claimed: “The impact of the very low-priced retailer is a big part of what is driving sweatshops.” She claimed it would be easier to raise standards in domestic contracting shops in New York if they were only competing with each other, but they are not.
“It’s possible to make the argument for a decline in sweatshops because so much is produced offshore,” she said.
She has more hope for improvements in the New York apparel industry than she does for Los Angeles, which has never been a unionized city.
“L.A. is on a downward trend,” Cowell said. “The ability to move to Mexico is so easy that there is nowhere to go but down. In order to compete with production close by, they have to constantly lower the standards.”
Julie Su, litigation director of the Asian Pacific American Legal Center, who has filed several lawsuits against manufacturers and retailers on behalf of employees, said Los Angeles has a much worse compliance rate than New York because it has limited unionization and is a sprawling metropolis, which makes it easier for sweatshops to move around undetected.
“We’ve spent years trying to identify the solutions,” said Su. “The truth is the industry never tackled the problems seriously. Instead, they have taken numerous steps to obscure them and deflect responsibility.”
In the last six lawsuits she has brought against manufacturers and retailers, Su claimed all had monitoring programs in place and all blamed their monitors for violations in contracting shops.
Lonnie Kane, co-owner of Karen Kane, a better-price sportswear and dress firm based in Los Angeles, uses about 20 domestic contractors, which are all monitored by an independent monitoring company. He sources about 52 percent of his production to China.
Kane said he has noticed shrinkage in the Los Angeles contracting base as a result of offshore production.
“The real questions is what is left here,” he said. “Will it be better contracting shops that abide by the law, follow regulations and do quick turns for higher-paying manufacturers or will it strictly be an underground business with people operating in the shadows without oversight and defying state and federal laws?”
He said federal and state labor investigators have a sincere desire to enforce the laws, but lack the resources to rout out sweatshops.
“There are thousands of shops, but how many have they really looked at?” he asked. “I think it’s way down on their priority list.”