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Sweatshops Are Fashion's Dirty Little Secret. But They Don't Exist in L.A. -- Do They?

Sweatshops Are Fashion's Dirty Little Secret. But They Don't Exist in L.A. -- Do They?

More stories from our 2012 Fashion Issue on dressing ethically: *West Hollywood's New Fur Ban *Does L.A. Still Have Sweatshops? *Yael Aflalo's Reformation Makes Vintage Cool *Santa Monica's Main Street, a Green Fashion Hub *Three L.A. Designers Who Do Eco-Fashion Right

"Sweatshops," says Ilse Metchek with obvious distaste. "That word. You don't even hear it anymore."

President of the California Fashion Association, Metchek is a shrewd and charming woman in her 70s, known in garment-industry circles as "the class historian." Holding court at a manufacturers luncheon in an upper floor room at the California Market Center (aka "the CMC") building downtown, she greets everyone by name and with a kiss on the cheek.

Sweatshops are fashion's dirty little secret. For years they supplied the majority of the clothes being manufactured worldwide. But the answer to whether they still exist in Los Angeles depends on whom you ask.

And to ask in a room full of manufacturers is to insult the bride at her own wedding: uncomfortable, vaguely repulsed expressions all around. In fact, the California Fashion Association started 17 years ago because of sweatshops. Specifically, the El Monte crisis of 1995.

El Monte was a horror: 72 Thai garment workers imprisoned in a suburban apartment complex, forced to sew clothes for American department stores. They slept on the floor and were deprived of food, toilet paper and any days off.

The federal and state governments came down on Los Angeles as the sweatshop capital of the world. Mayor Richard Riordan was "very, very unhappy."

The CMC building, with its hundreds of wholesaler showrooms and offices, is the beating heart of L.A.'s fashion biz, and Metchek at the time was its manager. Lacking an industry group, she and 50 or so manufacturers formed an association.

Laborers testified in Sacramento in support of groundbreaking legislation — Assembly Bill 633, the sweatshop reform bill. They told lawmakers about working for less than $2 an hour, 13 hours a day. About never being able to buy the clothes they made with their own hands.

AB 633 was signed into law in 1999, and with it, manufacturers became liable for any labor violations by their contractors.

"We all fought this like crazy," Metchek says. "Because in essence, a manufacturer became responsible for workers he or she did not hire, and is not in contact with."

While manufacturers hated the new law, she says, it turned out to be a blessing.

It is a tale of a nefarious industry come clean, and Metchek tells it well. "They've looked under every rock," she says. "But there hasn't been a child-labor issue. There's never been a death. Maybe somebody cut off a top of a finger. There have been many, many issues of the workforce not being paid, but not in the registered community."

Anyone who wants to operate a garment manufacturing business in Los Angeles is required to register with the state Office of the Labor Commissioner.

"Now, do we have a whole slew of people who aren't registered?" Metchek asks. "Absolutely. So you have two worlds."

In some ways, the garment business is like the entertainment business. There are the movies, and there's porn — a billion-dollar industry using the same production methods, and occasionally the same people. "But they have done a fabulous job of separating it from mainstream entertainment," Metchek says. "And that's what we have. We have a huge underground economy."

Paris, Milan and New York may have cornered the catwalk experience, but Los Angeles dominates the business side of American fashion. Downtown's Fashion District is made up of roughly 3,000 businesses doing $8 billion in economic activity every year. These are mostly wholesalers showing clothing to retail buyers — everybody from Macy's to Forever 21 to the one-of-a-kind boutiques in Portland, Ore. Finished garments pour in from overseas through the Port of L.A., get marketed downtown and are shipped out to stores across North America.

"The clothing's being made overseas, but the talent on the design and logistics side, and the ability to market it to retailers, that's all here," says Kent Smith, executive director of the L.A. Fashion District. "The cutting and sewing stuff is almost gone from our district."

When cutting and sewing happens in Los Angeles, it is for clothes that are extremely sensitive to fashion changes — women's and juniors apparel. Order sizes are smaller. Turnaround is quicker. It can take four months to get a new item from China. Staying local shortens production time to a few weeks. Also, plenty of denim dyeing and washing takes place in what Smith calls "the outlying areas": Vernon, Industry, the Inland Empire, Carson. Rents in these places are cheaper. Buildings have higher ceilings and sprawling floor space, the better to accommodate the large, high-tech machinery used in modern apparel manufacturing.

 

Some 80 percent of the clothes shipped out of Los Angeles to stores come from overseas, Metchek says. The remaining 20 percent are made here. Of that 20 percent, she is unsure how much is legitimate.

"We have no idea what the underground economy is doing," she says. "None whatsoever. They don't pay taxes for the most part."

Good luck quantifying the underground; statistics are based on people reporting, and the underground doesn't report.

"It's catch me if you can," Metchek says. "It's very easy to move a shop. If the labor department walks in and closes you up? You rent the machines and move next door. The workers will work whether they get cash or a check."

Illegal factories spring up like mushrooms after a rain in order to cash in on a hot item: "If a scarf is hot, you'll have 10 more factories opening up just to make scarves. When scarves are not hot, they're gone." Consumer demand for fast fashion makes it possible. A new color. A new print. It's over in 10 weeks.

"Anyone who wants to deal with a legitimate retailer has to watch themselves on all levels," Metchek says, then stops to pull in a representative from Stony Apparel. "Hi. How are you? Good to see you. We're talking about sweatshops."

The Stony rep grimaces. "Sweatshops?" he says. "There aren't any sweatshops."

"Thank you," says Metchek, pointedly. "They have to watch it like a hawk. They have compliance monitors who check the status of factories."

The rep nods. "You've got to be squeaky clean."

"There's a bad apple in every bunch," says another manufacturer who has wandered over. He is the owner of the Barbara Lesser clothing brand, which sells to Nordstrom. "But why focus on that? People like to look far into the past. Some fire in 1918 or something. The big shirt fire," he says. "We're not here to change Third World countries. My opinion is, I'm going to worry about my own backyard. That's where I do business."

"The interesting thing about all of this," Metchek says, "is, after all of these years, they haven't found another El Monte."

The Underground

"Well, I have to say, I'm so troubled by that kind of standard," California Labor Commissioner Julie Su says a few days later. Years ago, she was the lead attorney for those 72 Thai workers. "El Monte was a situation in which workers were held against their will," she continues. "They were working 18 hours a day. They sewed on the first floor of an apartment building and then dragged their tired bodies upstairs to sleep, eight or 10 to a bedroom. Windows were boarded. Razor wire surrounded the apartment complex. So that cannot possibly be the standard against which we measure progress in the industry."

The standard, she adds, ought to be a legal one. By that measure, the garment industry is far from squeaky clean. Problems persist.

Su's office administers AB 633, and some 1,000 claims are still filed each year. Some years, it's closer to 2,000. "That's just ones that are filed," Su says. "We know that the majority of workers do not file claims." They either don't know their rights, or are frightened, or expect retaliation, or have little faith that anything will happen, she notes.

That lack of faith is not unfounded; before Su came in, cases took 700 days (as opposed to the legal maximum of 120 days) to adjudicate.

Barely a year in office, Su has improved that time dramatically. In the first half of 2012, her office issued decisions totaling more than $1.7 million, already more than the total issued in 2010.

A large number of the office's investigations uncover violations. "And we're not talking minor violations. We're not talking about technical errors," Su says. Her investigations routinely turn up myriad abuses: Failure to pay minimum wage and overtime. Failure to provide wage statements, so workers know how much they worked and what pay they are entitled to. Failure to carry workers' compensation insurance. Falsification of records. Cash-pay violations tied to tax evasion. Abuse of "piece rate."

In itself, paying workers for every piece they complete isn't illegal, but companies often use it as an excuse to avoid paying the minimum wage. You see people work faster and faster. If they work too fast, management lowers the pay rate.

"The faster you work, the more you were supposed to be able to make. But it gets twisted into a ceiling on wages," Su says. "They tell workers: If you don't get minimum wage, it's your own fault. You were just too slow."

(A 2008 UCLA study found that lots of money is being stolen from L.A. garment workers — on average, $26.2 million a week.)

 

The El Monte bosses, Su recalls, kept a front shop in downtown. Conditions in that front shop, she says, are what exist in today's sweatshops. "They were doing the finishing work — the trimming, ironing, packaging. Workers arrived earlier than they actually clocked in, and stayed later than they clocked out."

There was no minimum wage, no overtime and no breaks.

In the 12 years AB 633 has been on the books, enforcement has been a challenge. Shady contractors shut down their business once a complaint is made, then open up under a new name. (Legally, these "successor" businesses are still responsible for the prior operation.)

"The problem of sweatshops in Los Angeles remains a reality," Su says. "I don't want to suggest that everybody is a bad actor. But from where I sit, not enough has been done all around."

The complexity of the garment industry makes it especially hard to police. It's a three-tier system. The contractor does the sewing. They're hired by manufacturers, who get contracts from retailers. "Everyone wants to make a little bit of money," says Ruben Rosalez, the western states regional administrator for the Wage and Hour Division of the U.S. Department of Labor. "Our theory is that the retailer is really the one who controls everything all the way down."

When the retailer pays the manufacturer too low a price, the result is an unfortunate reverse trickle-down effect. The manufacturer then doesn't pay enough to the contractor, who in turn stiffs the worker.

"Contractors agree to the terms in the first place because they have no other work," Rosalez says. "They find ways to cut corners, and often those corners are cut at the labor level." Often, workers don't get paid at all.

Rosalez's first case when he started with the agency 25 years ago as an investigator was a garment case. "Yet the same issues exist today. They have not gone away."

Ironically, the fickleness of fashion has benefited workers in Southern California. It has become standard practice for the feds to put a restraining order on garments if workers aren't getting paid. The clothes sit in a warehouse until someone — usually the manufacturer — steps in to pay the workers. Because trends move so quickly, getting the goods into stores is critical. Holding the clothes hostage is an effective motivator.

"At some level, the retailers are putting their heads in the sand," Rosalez says. "They're not following through to make sure the workers at the very bottom level are getting paid."

El Monte was a pivotal moment. Manufacturers formed the California Fashion Association. Folks on the side of workers formed the Coalition to Abolish Slavery and Trafficking, or CAST.

Because they were undocumented, the victims were treated as criminals. CAST chief executive Kay Buck will never forget the sight of the newly liberated Thai workers walking around in orange prison jumpsuits.

If basic services were lacking, so were laws. Then–Assistant U.S. Attorney Michael Gennaco — who went on to become one of the founders of CAST — prosecuted the El Monte case under archaic, abolition-era anti-slavery laws.

Today, garment sweatshop cases make up 10 percent of CAST's caseload. Buck has not seen any new sweatshop cases in the last year. The decrease, however, coincides with a cut in CAST's budget. "Our outreach is not as robust as it used to be," she says.

The coalition has only one person doing outreach for all of Los Angeles.

Foreign-labor recruitment has only gotten worse. Foreign-labor recruiters troll for workers in impoverished communities. "They say you can have a better life in the United States," Buck says. " 'Come with me. I'll take care of everything.' Once you're here, that's when they say, 'Oh, by the way, you owe us $30,000 for your room and board.' "

Companies may indeed employ compliance officers, she adds. But are those officers trained to recognize modern-day slavery? Probably not. "If compliance officers aren't asking the right questions when they do their visits, most likely they won't find slave labor when it's really there," Buck says.

The right questions can be as simple as whether the workers have their own passports and identification, or if someone in the company is holding it for them. Are workers actually doing what they thought they would be doing prior to coming on the job?

It means going deeper than the usual wage and hour rigmarole, and creating a safe space for workers to answer questions about fraud or coercion.

"There are subtle ways traffickers will say to people, 'By the way, I know where your children live and go to school,' " Buck says. "Any mom or dad knows what that means. Threats don't have to be direct. It would be naive of us to believe that still isn't happening."

Race to the Bottom

 

Up until a few years ago, the United States had import quotas on most foreign-made clothing. Established in the 1960s, these quotas were meant to protect American textile and apparel jobs from low-cost producers in developing countries. When the government removed the quotas in 2005, the majority of the garment industry promptly moved offshore. "Now it's a completely open global economy for apparel," says Fashion District exec director Smith. "Companies are going to go where they can get labor cheap, and that's overseas."

"In the late '60s or early '70s, there were over a million jobs in the U.S. garment industry," notes Liana Foxvog, communications director of the International Labor Rights Forum. "Now it's less than 100,000."

Los Angeles–based American Apparel is the only major garment manufacturer doing 100 percent of its sewing here in the United States.

The question Foxvog's organization has been trying to answer is how to improve an industry where there has been a race to the bottom in wages and working conditions.

Bangladesh is the country that occupies much of Foxvog's attention these days. There, they work a 60-hour week, at 20 cents an hour, or $43 a month, sewing America's T-shirts and skinny jeans. Workers' wages are now lower than China's, which is precisely why the factories are there.

Foxvog has documented violations that run the gamut, from forced pregnancy testing to companies keeping two sets of books. She has spoken to workers who were told by management how to respond if an investigator comes to their workplace.

Lately, there have been a series of factory fires in Bangladesh. Apparently, the 1911 Triangle Shirtwaist Factory fire that killed 146 workers in New York City is not quite as distant history as the Barbara Lesser manufacturer would like to think.

"What's happening today in Bangladesh is reminiscent of that," Foxvog says. "We'd expect these global corporations would have learned something by now. But in the last six years, over 600 workers have died in factory fires and building collapses there. It's a hugely tragic situation."

These problems happen across the board. "We can't pin down one company," she says. "The factories are subcontracted out. Typically, you're not going to see a factory that's only producing for Wal-Mart. Instead, what you see is a factory producing for Gap and H&M and Nike and Wal-Mart all at the same time."

When a fire broke out a year and a half ago at a factory used by the Gap, workers jumped to their deaths rather than burn.

Half a world away, in the cool, air-conditioned California Market Center building in downtown L.A., Kent Smith considers the situation in Bangladesh. "That's the global economy we're playing in," he says. "Yes, those conditions are something American workers would not be comfortable with. But if you look at the context, they're growing their economy, raising their wages. China's wages are growing every year. That's why some manufacturing is moving out of China."

Increasingly, those manufacturers are being held accountable for the conditions in which their products are made. In January, the California Transparency in Supply Chains Act took effect. It requires companies that do business in California and that have annual gross receipts exceeding $100 million must disclose efforts to eradicate from their supply chains slavery and human trafficking.

On the consumer end, Foxvog suggests downloading the International Labor Rights Foundation's Free2Work cellphone app. You take a photo of a product's barcode and see how its maker's policies rate. Companies are graded. Gap, for instance, gets a B overall but a D on worker rights.

Asked which mall stores hold up best to scrutiny, however, Foxvog sighs. "Unfortunately," she says, "I don't have good guidance for mall shopping."

More stories from our 2012 Fashion Issue on dressing ethically: *West Hollywood's New Fur Ban *Does L.A. Still Have Sweatshops? *Yael Aflalo's Reformation Makes Vintage Cool *Santa Monica's Main Street, a Green Fashion Hub *Three L.A. Designers Who Do Eco-Fashion Right


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