The Price of Low-Cost Clothes: US Jobs
Retail trend to use 56-cent-an-hour Central American workers accelerates
BACK-TO-SCHOOL bargain shoppers will find some of their best clothing buys made in El Salvador, Honduras, and other offshore labor markets. As American discount merchants and moderately priced stores, compete in the cut-throat apparel market, they are moving more of their production contracts overseas where a garment can be put together for 5 percent of what it costs to make in the United States. While the shift is not new, the pace is accelerating and aggravating already raw feelings among US labor unions over the North American Free Trade Agreement (NAFTA). Labor experts say the lure of cheap, overseas labor is the major reason some 60,000 apparel jobs disappeared from the US last year - a 6.2 percent drop. The decline is ''phenomenal,'' says Ron Hetrick, an analyst with the US Bureau of Labor Statistics, ''It's way beyond other manufacturing slowdowns, including aerospace.'' American labor advocates and trade hawks want to arrest this trend and block legislation that would grant increased tariff breaks for products entering the US from Central America and the Caribbean. To drive the point home to US consumers the National Labor Committee, a New York-based activist group, just completed a two-month, national publicity tour with teenage girls from El Salvador and Honduras who described alleged labor abuses in the plants. The American Way? Distinctly American retailers - such as The Gap, Dayton Hudson, Inc., J.C. Penny, and Sears - are drawn to places such as El Salvador, where tax-free zones provide low-cost, relatively unregulated and largely unorganized labor. Mr. Hetrick says the $7.31 average hourly earning for American apparel workers - the lowest paid in US manufacturing - isn't low enough to compete with offshore labor costs of 56 cents an hour paid in El Salvador. ''Their only real cost is for shipping, and that's nothing compared to what it costs to produce the same goods in the US.'' The Gap, for example, buys more merchandise (35 percent of its stock) from US plants than most of its competitors, says Stan Raggio, The Gap's senior vice president for sourcing and logistics. But 65 percent of the goods it sells are produced overseas, he says. By telephone from J.C. Penney's Plano, Texas, headquarters, Hank Russman, a company spokesman underscores the bottom line: ''We are being forced by competitive situations to look for offshore options - we are always looking for ways to cut costs.'' The savings are substantial. At the Taiwanese-owned Mandarin International plant in El Salvador's free-trade zone, 40 workers - many teenage girls - labor on a production line making 1,100 shirts a day that may generate $22,000 in revenues for US retailers. The workers, paid $4.51 a day each - or $180 collectively - are paid eight-tenths of 1 percent of what the garment sells for in the US. ''We have not met any worker in Central America or the Caribbean whose wages account for more than 2 percent of the sales price of the garment,'' claims Charles Kernighan, director of the National Labor Committee. But what may be considered low pay in the US is a minimum wage in these depressed economies and many workers are grateful for any employment, Salvadoran labor organizers say. That situation may also mean that workers will put up with abuses for the sake of keeping their jobs. Judith Viera, one of some 450,000 Caribbean maquiladora workers who cut and sew garments exclusively for the US market, was fired from her job at the Mandarin plant in June. She accompanied Kernighan on the trek that included testimony before Congress and a demonstration at The Gap's San Francisco headquarters. Speaking through a translator, she describes a grueling schedule: ''Monday through Thursday, my work shift began at 7 a.m. and ended at 9 at night. Fridays I began work at 7 a.m. and worked until 5 p.m., then began work again at 7 p.m. and stopped at 3 a.m. We had to sleep in the plant and then begin on Saturday at 7 a.m. and work until 5 p.m.'' Overtime, while obligatory, is not always paid, Ms. Viera says, and leaves no time for the young workers to attend school at night. Workers complaints are met with screams from supervisors, she says. Organized labor is not tolerated, she says. During the past several weeks, a group of US corporate executives, including those from The Gap and J.C. Penney, traveled to the Mandarin plant. After meeting with workers, plant managers and owners, labor leaders, and Salvadoran government officials, they could not corroborate Viera's claims. Susan Eich at the Minneapolis-based Dayton Hudson Corp. and other representatives from US companies that buy offshore say that they have heard and investigated many allegations about suppliers that don't conform to their own corporate codes of conduct. If the supplier is found to be in violation, says Ms. Eich, it will likely be terminated as a supplier for Dayton Hudson. ''American companies say they have corporate codes of conduct,'' Kernighan says. ''Those statements are directed to the US Congress and the media, because none of the maquiladora workers have heard of [the codes].'' Armed with disturbing data on US job losses, and stories such as Viera's, labor advocates are critical of NAFTA and any efforts to expand the trade agreement. They have targeted the bill Rep. Philip Crane (R) of Illinois designed to give Caribbean nations the same tariff- and quota-free access to the US market that NAFTA affords Canada and Mexico. Reps. Marcy Kaptur (D) of Ohio and Duncan Hunter (R) of California co-chair the Congressional Jobs and Fair Trade Caucus. Ms. Kaptur wants the renegotiation of NAFTA to be based on what she calls human rights and labor rights abuses in Mexico. ''The failure of NAFTA to address labor conditions in Mexico,'' Kaptur's spokesman warns, will lead to the acceptance of similar practices in other NAFTA-bound nations. Mr. Hunter goes further by pushing for the US withdrawal from the agreement. Return to NAFTA The labor-bipartisan alliance will push to make the NAFTA jobs-trade debate a hot-button issue in the 1996 presidential elections. President Clinton got off to a rocky start with organized labor. His support for NAFTA alienated many union leaders. If he hopes to win labor support in his bid for a second term, analysts say that he will have to come to terms with the labor movement's opposition to what it calls free-trade policies that put foreign countries above the livelihoods of American workers.