Studies On Lean
From Manufacturing &
Verite Reveals The Ten Deadly Sins Of Overseas Factories
BY HEATHER WHITE
On the U.S. island territory of Saipan, workers are held in virtual
bondage, unable to leave their sub-minimum wage jobs because they cannot
repay recruiting fees as high as $7,000, says Verité, the non-profit
organization that inspects foreign factories. In Honduras, workers at a
garment factory told student activists that they earn about $20 for a
60-hour work week. In China and Vietnam, human rights groups report that
workers making shoes are routinely physically abused.
Fueled by an abundant supply of labor in the global market, capital
mobility and free trade, companies in modern-day America routinely farm
out much or all of their production to independent factories in
countries with rock-bottom labor costs. The lack of restrictive and
costly government regulations overseas is also very attractive to
companies interested primarily in the bottom line. Unfortunately, this
lack of regulation allows dangerous work environments to flourish.
These rapidly growing supply chains are creating disturbing trends in
production facilities across the globe, says Verité. Here are 10 of
1. Contract Labor
In many areas of the world including the Middle East, Japan and
Taiwan, overseas workers are hired through labor brokers in order to
fill jobs in labor shortage areas that local people do not want. The
foreign workers pay incredibly high fees in order to get positions,
which supposedly pay several times what they can make in their home
countries, but consequently they end up in virtual debt bondage to the
In many cases, they are enticed by the prospect of high-paying jobs
in other countries, only to find that various deductions and interest
rates (up to 25 percent per month) have reduced them to the level of
indentured laborers. In some instances, Verité has found that workers
spend their entire salary for up to two years just to pay off
recruitment fees and interest. Moreover, desperate to keep their jobs in
order to pay off their debt, these workers are extremely reluctant to
resist a wide range of other abuses, including excessively long and
illegal working hours, and physical and sexual abuse.
2. Child Labor
In Latin America, an estimated 15 to 20 percent of all children work
in the garment, shoe or mining industries. In Africa, children comprise
17 percent of the continent’s work force. It is estimated that there are
100 million to 200 million children working around the world -- 95
percent of them in developing countries.
According to human rights advocates in China, a young girl was forced
to work 12-hour shifts seven days a week, earning seven cents per hour.
For her 84-hour work week, she earned $5.55. The company often
confiscated all of the young workers’ identification cards to prevent
them from seeking work elsewhere, and usually they are owed back wages.
3. Cheating on Wages -- Excessive Overtime
A U.S. Department of Labor report stated that as many as 55 percent
of garment factories violate overtime pay laws. Workers average 65-75
hours a week in sweatshops but are not being compensated fairly or
legally. Employers under-record overtime hours and workers are not aware
of the companies’ policies relative to labor laws specifying that
pieceworkers are entitled to receive overtime premiums but do not
specify the rate.
In some factories, pieceworkers do not receive any overtime pay for
hours worked in excess of the normal 176-208 hours per month. Employers
worldwide routinely penalize or fire workers who decline overtime.
4. Abuse and Harassment of Workers
Workers commonly report horrible working conditions including no
benefits, non-payment of wages, forced overtime, sexual harassment,
mandatory pregnancy testing, verbal and physical abuse, corporal
punishment and illegal firings.
Children can often be found working in factories with their parents
instead of going to school. Factories investigated by Verité often have
locked bathrooms and workers are not allowed breaks even for food and
5. Exposure to Hazardous Chemicals
PIn early 1996, two Chinese women workers died and more than 30
developed leukemia and anemia from inhaling toxic fumes from benzene and
other chemicals in poorly ventilated foreign-owned shoe factories in the
coastal province of Fujian. A clinic near Shenzhen, China, has recently
been established for the sole purpose of treating poisoned workers. The
majority of in-patients are suffering from paralysis or are in comas.
Their average ages are 19 to 23 years.
6. Paying Less Than a Living Wage
A living wage sustains a worker’s basic needs, yet millions of
workers are not receiving a living wage, even overtime wages do not
allow them to meet their basic needs. A recent Verité study suggested
that 43 percent of the factories surveyed violate minimum wage laws.
Haiti is one example of this dire situation: An average worker in a
textile factory in Haiti earns $2.22 per day. Transportation to and from
work costs 37 cents; while a simple meal from the stalls outside of the
factory costs 62 cents.
Thus, a worker’s earnings of $1.61 or 73 percent, goes to simply
keeping the worker alive. This leaves just 61 cents for workers to rent
a one-room hut that costs $7.10 per week and has no running water. It is
clear that workers do not have enough to meet their own basic needs, let
alone the needs of a family that includes school, medicine and clothing.
7. Suppression of Unions
On average, in over 200 factories monitored by Verité, less than 10
percent of workers know their rights on issues of minimum wage, overtime
pay, benefits, paid leave and the right to organize as a union.
Workers are routinely fired or punished for any signs of
unionization. A Beijing factory worker made a T-shirt with the Chinese
lettering for "collective bargaining" and was secretly sentenced to
three years in a labor camp on a charge of printing slogans that were
"calculated to incite."
8. Womens’ Rights Abuses
The global workforce manufacturing consumer products is comprised of
90 percent women, thus a disproportionate share of the abuses
encountered are women’s rights abuses. Employers in both Asia and
Central America require pregnancy testing, sterilizations and birth
control of their female employees. Factory managers in Saipan and Mexico
are notorious for denying maternity leave benefits by firing pregnant
women and forcing women workers to have abortions. Women are sexually
harassed on a daily basis. Sexual assaults occur with alarming frequency
and are not reported, as the women fear losing their jobs. In one
National Labor Committee report, women as young as 17 were not allowed
to go to the bathroom for their entire shift.
9. Forced Overtime
Employers regularly use threats of denied wages, physical abuse or
unemployment to coerce overtime work. Production quotas are often raised
for those refusing overtime and many are simply fired for refusal to
work for less than 48 hours a week. Shifts of 17 hours are common
throughout the world, and many workers are denied even one day off per
week. Overtime pay is slim to none in global sweatshops. Employers are
infamous for forcing overtime by announcing more work at quitting time,
locking the factory’s doors and often leaving young mothers with no
child care options.
10. Blurred Supply Chains
In countries like Malaysia, the number of workers making shoes,
clothing and textiles has increased 600 percent since 1970. The U.S.
has lost more than 400,000 jobs since 1973. With this trend in global
production likely to continue, it is crucial that every link in the
supply chain be transparent. Companies are farming production out to
suppliers who are in turn subcontracting out to other suppliers which
tends to hide exactly who is producing for whom. Companies must stay "in
the know" and create a system where they can track their suppliers as
well as their suppliers’ suppliers.
-- Heather White is director of Verite, an Amherst, Mass.-based non-profit organization that
monitors overseas factories. She can be reached
at 413-523-9227. The Web address is www.verite.org.