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Sweatshop
Information, Reflection and Action Packet
Why
Are There Sweatshops?
At the Chentex Factory in the Free Trade Zone in Nicaragua, a young woman earns 11 cents to sew a pair of Arizona jeans that sell at J.C. Penney for $14.99. Meanwhile, last year J.C. Penney earned $566 million in profits, almost equal to Nicaragua’s annual national budget.
Sweatshops are not inevitable. They are not merely perpetuated by greedy factory owners, nor by some insidious force in the economic cosmos. Here are four concrete factors that allow sweatshops to proliferate:
Corporate
greed
U.S. manufacturers have found that they no longer need to own and operate
their own factories. In a world virtually free of borders, they look for
subcontractors in countries where labor and operating costs are lowest.
International
policies
The World Bank and foreign lenders such as the U.S. Agency for International
Development require developing nations to bolster their economies by creating
export industries, and Third World countries desperately need the foreign
money. But these policies have created a glut of manufacturing plants
(in countries that often have poorly developed labor and environmental
laws), which allows U.S. corporations to dictate their purchase prices.
The muddle in
the middle
As the playing field has shifted overseas, the number of middle merchants
has increased. Contractors, importers, agents and others are each trying
to make a profit from those directly below them on the supply chain. Consequently,
factories frequently do not know where their goods are headed, just as
U.S. manufacturers and merchandisers often don’t know the product’s
source
Squeezed at
the bottom
All these factors pressure factory owners to cut costs. And where does
the price squeeze end? At the bottom, with the laborers, who are pushed
to produce goods as quickly as possible. This is where forced overtime,
low wages, punishments and fines for slow work and mistakes, child labor,
and other abuses come in.
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Seattle, WA 98115
Phone: 206.223.1138 Fax: 206.621-7046 E-mail: ipjc@ipjc.org