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Date: 2018
Publisher: Gale, part of Cengage Group
Document Type: Topic overview
Length: 1,804 words
Content Level: (Level 5)
Lexile Measure: 1590L

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Sweatshops are workshops or factories, usually located in developing or lesser-developed countries, where laborers work very long hours for low wages to produce consumer goods for the global market. Technical definitions of the term also acknowledge that the employment practices seen in such facilities flagrantly defy domestic and international labor laws.

Since the turn of the twenty-first century, concern over sweatshop labor practices has largely focused on the fashion and electronics industries. Along with lesser-known and generic manufacturers, many major companies have drawn scrutiny for using sweatshops to assemble their products. However, consumer pressure to end sweatshop labor practices is increasing, with opponents arguing that sweatshops are exploitative, coercive, and harmful to both the physical and psychological well-being of the workers they employ.

In the United States, sweatshops became common during the Industrial Revolution (1820–1870) and persisted into the first half of the twentieth century before organized labor movements and growing concerns over workers' rights precipitated their decline. These changes were supported by landmark pieces of legislation that regulated working conditions, including the Fair Labor Standards Act (1938) and the Occupational Safety and Health Act (1970). Today, federal and state-level US authorities have the ability to enforce these and other laws to stop illegal or underground sweatshops that do not meet minimum wage requirements, maintain safe working conditions, or fulfill their tax obligations.

Outsourcing and Globalization

While sweatshops have been a part of the global economy since the dawn of the industrial age, modern incarnations largely grew out of the globalization of the consumer economy during the second half of the twentieth century. During the 1960s and 1970s, many American corporations moved their production operations out of the United States, not only to cut labor costs but also to bypass US environmental and safety regulations. Mexico was initially a favored destination due to its affordable labor pool and proximity to the United States, but the practice later spread to eastern Asia, then throughout Asia and Central America. Companies often defended their decisions to outsource manufacturing operations to these locales as necessary, claiming that it was the only way they could compete against inexpensively produced imported goods. However, labor union officials and some economists countered that the outsourcing of labor harms the national economy by causing job losses and lowering domestic standards of living.

Much attention has also been paid to the labor practices used in sweatshops, with many opponents decrying it as a form of economic oppression. Yet, some experts believe sweatshop manufacturing practices actually help impoverished members of the global labor force. Arguments that defend the practice typically claim that sweatshops deliver badly needed jobs, allowing workers to earn meager livings rather than remain unemployed or migrate into more dangerous vocations. Similarly, some economists also contend that sweatshop conditions that seem deplorable to people from developed countries can be very attractive options according to local standards. In addition, they create jobs that generate taxable income, allowing local authorities to collect revenues needed to pay for infrastructure improvements. According to these views, sweatshops boost the economic and social development of the countries in which they operate. Supporters of these stances frequently note that sweatshop factory jobs are highly sought-after in the developing world, thus indicating their relative desirability.

Despite these claims, many familiar companies try to hide their uses of sweatshops from consumers to avoid being associated with the controversial practice. They largely achieve this through control of the supply chain, which is the set of processes that enable the production and distribution of consumer products. Large corporations fragmentize their supply chains, making environmental and labor practice violations difficult to detect, and their sheer size and wealth insulates them from buyer-side pressure that might otherwise persuade them to abandon their reliance on sweatshops.

Buyer-side pressure is also constrained by the way US foreign aid policy helps support the continued spread of sweatshops across developing and lesser-developed countries. For example, the United States Agency for International Development (USAID) offered $500 million to Haiti after the Caribbean nation was devastated by a powerful earthquake in 2010 that killed more than 80,000 people. However, USAID funneled $170 million of that aid into the construction of the Caracol Industrial Park, which is essentially a large-scale sweatshop complex for the apparel industry. Opponents of the project were highly critical of the US government's decision to fund an economic development vehicle that, in their view, reinforces the exploitation of the Haitian labor force in order to benefit US corporations and consumers.

Retail and "Fast Fashion"

Sweatshops are commonly used to meet surging consumer demand for affordable clothing in the United States and internationally. Some consumers operate under the incorrect assumption that inexpensive clothes are mass-produced by machines; in actuality they are usually made by low-paid human workers using a combination of mechanized and manual techniques. This practice is informally known as fast fashion, a play on words that invokes the low-cost, mass-produced characteristics of fast food. According to a 2017 article originally published in Outsource Magazine, about 99 percent of all clothing and footwear sold in the United States is manufactured in other countries, including China and Bangladesh, where minimum wages are the equivalent of about $1.26 and $0.24 per hour, respectively.

The 2013 collapse of a building in Rana Plaza, a Bangladeshi industrial complex, that killed 1,138 low-wage workers and injured thousands more cast a harsh glare on the realities of sweatshop labor practices. The brands and retailers utilizing shops in Rana Plaza included Benetton, Joe Fresh, Primark, and Walmart, among others. Despite increased awareness about ethical shopping, commentators note that it is extremely difficult for consumers to avoid directly or indirectly supporting sweatshop apparel manufacturing practices without dramatically increasing their clothing costs. A large majority of American consumers are heavily reliant on affordable apparel, and as such, sweatshop labor accounts for a large percentage of the estimated $250 billion US shoppers spend on clothes each year.

Nevertheless, non-government agencies (NGOs) and other advocacy groups have launched ongoing consumer awareness efforts. Baptist World Aid Australia publishes an annual report that rates the ethicality of the labor practices used by 114 global fashion companies by dispensing grades ranging from A to F. The 2018 edition assigned an average grade of C+ but notes that the number of companies publishing comprehensive supplier lists saw a significant year-over-year increase, rising from 26 percent in 2017 to 34 percent in 2018. Still, many well-known, highly profitable corporations have been accused of engaging in exploitative labor practices. Footwear and sports apparel manufacturer Nike, for example, faced a day of international protests on July 29, 2017. Activists targeted Nike for mounting allegations regarding the company's use of sweatshops, which included claims that workers at a Vietnam production facility were subjected to verbal abuse, deprived of rightfully earned wages, and overworked in extremely hot conditions to the point of collapse. Entertainer Beyoncé Knowles was also criticized in 2016 when journalists exposed the use of sweatshop labor to produce her clothing line Ivy Park.

Advocacy groups such as the Clean Clothes Campaign (CCC) and United Students Against Sweatshops (USAS) actively work to curtail sweatshop labor practices in the apparel industry, while innovation represents another threat to their continued existence. In 2018 the Wall Street Journal reported on the increased use of automated and robotic clothing manufacturing technologies, noting that their ongoing proliferation has sparked a trend among US businesses of abandoning sweatshop production facilities by bringing their formerly outsourced manufacturing operations back to the United States.

Made in the USA

Despite a shift toward bringing manufacturing back onshore, critics warn that the "Made in the USA" and "Made in America" labels, which traditionally help consumers make purchasing decisions that favor American workers and businesses, are not reliable guides to ethical clothes-shopping. While such labels are usually accurate in terms of indicating where a product was actually made, it does not mean the item was produced using ethical labor practices.

In some cases, manufacturing operations exploit undocumented immigrants and other marginalized members of the labor force, as was found in the infamous 1995 raid that exposed a sweatshop in El Monte, California, staffed by dozens of workers of Thai origin toiling in conditions that approached slavery. The facility was surrounded by barbed wire and patrolled around the clock by armed guards. Workers had been forced to surrender their passports, and their employers garnished workers' wages as ostensible repayment for the expenses incurred in bringing them to the United States. US Department of Justice authorities identify these tactics as consistent with those used by human traffickers. While violations of this scale have not been detected in the years since, US-based clothing manufacturers continue to be found guilty of legal breaches regarding wages, overtime payments, and recordkeeping.

In 2016, for example, as part of an investigation of seventy-seven California apparel factories, the US Department of Labor (DOL) analyzed the cost of a dress sold by Forever 21 for $24.90. The product's label indicated the garment was made in the United States, but the labor required to make it should have cost at least $30.43 according to the federal minimum wage, which was one-to-two dollars lower than Los Angeles County's minimum wage at the time. As evidenced by the DOL investigation, which took place between November 2015 and April 2016, sweatshops and sweatshop-like facilities have continued to operate in the United States in defiance of federal and state labor laws. Of the seventy-seven cases investigated by the DOL, 85 percent were found to be engaging in wage and hour violations, including contractors manufacturing clothing for retailers Forever 21, Burlington, Nordstrom, Macy's, and Ross Stores. The offenders, however, faced relatively meager fines, which totaled just $65,000. In August 2018, the DOL announced that Los Angeles-based manufacturer SMT Apparel Inc. owed $51,840 in minimum wage and unpaid overtime to forty of the company's employees.

Controversies about the labor practices used in US manufacturing facilities also extend into the realm of sheltered workshops, which are production operations that exclusively hire disabled people to perform menial labor tasks on a piecework basis. Some critics have described them as functioning like sweatshops—workers typically earn far less than minimum wage because piecework pay rates are calculated according to nondisabled workers' productivity expectations. While sheltered workshops are legal and some are even funded with public money, there is an ongoing activist push to reform their labor practices and wage structures. Such activists argue that disabled people's time and labor are as valuable as nondisabled people's, and that sheltered workshops are a form of state-sanctioned discrimination because they segregate disabled workers from the mainstream workforce, exploiting their labor in order to serve corporate and industry interests. As part of the Workforce Innovation and Opportunity Act of 2014, the federal government devotes resources for job training and other services to aid the disabled in securing employment in an integrated work setting, creating opportunities beyond sheltered workshop options.

Source Citation

Source Citation   

Gale Document Number: GALE|PC3021900163