Albion Monitor
[Editor's note: They call him the man "who made Kathie Lee Gifford cry."

He's Charles Kernaghan, the labor activist who pulled sweatshops from the dark corners of the Third World and catapulted them into the headlines with a simple strategy: Find celebrities with high profiles and companies with wholesome images and ask them -- publicly -- to take responsibility for the working conditions in the factories where their clothing is made.

Kernaghan's strategy has kicked up a storm of indignation, denials and dismissals from some of these celebrities and companies -- even from the media -- but it has also scored some major successes. With only a three-person staff and an annual budget of around $240,000, Kernaghan's National Labor Committee, based in New York City, has turned the once-resentful Gifford into a supporter of labor rights and has pressured a major U.S. clothing retailer -- the Gap -- into agreeing to allow religious and human-rights groups to independently monitor working conditions in foreign factories that make its clothing.

In an hour-long interview with Kathy Jones, Editor of SHOP! Information Services, Kernaghan talked about his methods, the public response, and sharply criticized The New York Times and retail trade groups for claiming that his research on sweatshops is exaggerated and inaccurate.]

The Guy Who Made Kathie Lee Cry

by Kathy Jones, Editor SIS

"Sporting goods, electronics, shoes, sneakers, agricultural products, coffee, bananas -- you name it -- it's made under some pretty rough conditions"

All of the stories about sweatshops we seem to be reading these days focus on the clothing industry. Is that the only place where sweatshops exist?

No. Since the National Labor Committee is so tiny and underfunded, we can only focus on Central America and the Caribbean, which have mostly apparel factories. But we found out that if you focus on one area in the public's mind, that offshore assembly plant and those conditions really stand for conditions around the world.

Now in the U.S., the apparel market is $190 billion a year -- more than half of that market is imports. So this just shows you how tremendous the globalization of the economy is. But sweatshops are absolutely not limited to apparel. Sporting goods, electronics, shoes, sneakers, agricultural products, coffee, bananas -- you name it -- it's made under some pretty rough conditions -- in factories in Malaysia, the Philippines, Indonesia.

Is there any way to estimate how many workers have been fired, indimitated, underpaid, or otherwise abused in factories overseas?

There's no way to put a number on it. In Honduras it could be thousands, in El Salvador the same thing. In Honduras, maquilas [factories] are booming so much that if you're fired, you're likely to find a new job, because they need the workers so badly. In Haiti, where it's not booming to that extent, losing a job and being blacklisted could be hell, because you could starve to death. It's very risky, very dangerous. We surveyed workers in Honduras, we've done it in Haiti. In Honduras, we surveyed 1,000 workers with the Human Rights group CODEH -- Committee for the Defense of Human Rights in Honduras. CODEH was told by 100 percent of the women they spoke with that they'd be immediately fired the minute they mentioned unions. So it's massive. The worker rights violations are incredible.

How do you gather data for your reports on sweatshops?

We've had to develop some very good contacts -- you can't sit in the United States pontificating abut working conditions or wages in the Third World without being in constant consultation with human rights and religious groups, and worker and women's groups in these countries. We've established very good ties in El Salvador, Honduras, Haiti, Guatemala, the Dominican Republic.

How long has your group been studying working conditions in Central America and the Caribbean?

Since about 1990.

"All of the Republican brain trusts tried to tear this to shreds before it could hurt the Bush campaign, but they couldn't put a scratch on the research, and no one ever has"

When would you say these apparel and other jobs start moving out of the U.S. and into these foreign factories?

The whole movement of companies to Central America and the Caribbean really didn't start until the mid-1980s, in the Reagan Administration.

Why was that?

Because the administration determined that in the face of the globalization of the economy, the U.S. would compete on the basis of low wages. They went so far in Central America and the Caribbean to build the free trade zones. U.S. taxpayers' money built them. Factories just didn't end up in Central America and the Caribbean. All of these ads were taken out in magazines targeting U.S. companies, informing them that they could get workers in El Salvador for 33 cents an hour. U.S. taxpayers paid for that through USAID [the federal agency for international development].

What about the growth of low-wage factories in other countries?

After World War II, many companies left the U.S. They went to Taiwan, the went to Hong Kong, they went to South Korea. When the women workers started to organize themselves and wages went up -- to around $3.50 an hour in apparel, goodbye U.S. companies. So, at that very point, say, 1985-1986, there was a movement, out of South Korea, out of Taiwan, out of Hong Kong, to the Philippines, to Indonesia, Malaysia. At the same time, that's when Central America and the Caribbean were developing. U.S. multinationals and other multinationals virtually roaming the world in search of low wages.

The Kathie Lee incident has put sweatshops in the headlines, but awareness of this has been building before that. When did your group first get the media to pay attention to these issues?

We thought of the angle of U.S. tax dollars because we realized this was a home run -- in the 1992 election. We had researched all of this USAID stuff -- we knew how much this organization had spent in U.S. tax dollars to lure companies out of the United States-- it was over a billion dollars. Then we went to 60 Minutes.

So our first real entry into this was at a massively high level -- the story was shown on 60 Minutes and, from what we heard from the Clinton campaign, this became one of the primary issues of the country according to their polls. It ended up on the Donahue show, Nightline, a hundred newspapers. The 60 Minutes experience taught us a great deal. You have to find a hook for your human rights work or it isn't going anywhere in the media.

Some of your critics have said you're overblowing what's going on and that you're describing conditions that don't exist.

They can say whatever they want. They've never put a dent in our research. I got a good tip from 60 Minutes. The producer said to me, "You know, 25-100 of the smartest right-wing Republicans are going to come after you. And if you have anything in here that's wrong, they're going to chew you to shit." He was right. All of the Republican brain trusts tried to tear this to shreds before it could hurt the Bush campaign, but they couldn't put a scratch on the research, and no one ever has.

We went against the Gap for a full year. The Gap is not a small company -- the Gap could hire whoever they wanted to. The Gap couldn't put even a little tiny sliver into any of our research.

Every single thing we do -- all of it comes from the labels people put in their hands. Kathie Lee said, "Well, we didn't produce [in the Global Fashions factory in Honduras]. There were no children there." So we have a picture of the children. We have the labels that were produced there. We go to Wal-Mart, we buy the pants. The National Retail Federation says the same thing. But they have yet to present one single thing that we've said that is incorrect. We have the pay stubs from workers to prove what we're saying.

(SIS contacted the National Retail Federation, a trade group of retail companies, asking them if the had any data to contradict Kernaghan's statements. Federation spokesman Robert Hall has been quoted as saying Kernaghan doesn't do "his homework" when investigating companies accused of contracting to sweatshops, thus "smearing the good name" of some companies.

Federation spokeswoman Pam Rucker, director of press and media relations, said, "We have no research. We are not privy to the operational records of retailers so I would have no figures or research to provide you."

In regards to Hall's comments, Rucker said, "Rob did not dispute point by point Mr. Kernaghan's charges against retailers. What Rob was trying to convey was retailers' frustration that Mr. Kernaghan went ahead with his public vilification of them without first contacting them or trying to clarify his charges." Rucker said she "did not have the names in front of me" of the companies she said Kernaghan had incorrectly named as being involved in child labor.)

"You know what it cost to go to the doctor in Honduras? Two days' wages"

I'm going to get into some of the specific arguments that retailers, factory owners, the occasional reporter, and, in the past, Kathie Lee, have made, One of the arguments -- and this has been put forth in a recent front-page New York Times article on Honduran garment factories -- is to say, well, the wages are low, but you have to understand, this is the Third World, and people are falling all over themselves to get these jobs. Companies are taking people out of a bad situation and giving them jobs, so why isn't this a good thing?

Well, I think that Larry Rohter should get the corporate apologist of the year award. He's the one who wrote the New York Times article.

Why do you think the article took that approach?

The amount of advertising that goes into the New York Times each week on apparel and retail -- just add it up -- is in the tens of millions of dollars.

I was actually sitting back thinking to myself, 'This is incredible." there's hardly been an article that was negative in two years [about the labor committee's data on sweatshops] and someone had to come along and get that role, and he was assigned the role of starting the counteroffensive. [He] let the companies off the hook.

The 31 cent an hour wage in Honduras provides abut one-third of the cost of living. Rohter had to overcome enormous hurdles to present that 31 cents an hour as a living wage by these ridiculous stories of someone gaining 30 pounds [after starting work as a maquiladora] and living in a house "made of brick with a zinc roof." The majority of maquiladora workers live in the most humble of circumstances at the edge of surviving. Cram packed in rooms -- anybody with two eyes in their head is going to see this -- and the workers will always tell you they can't live.

In Honduran currency, 31 cents an hour is equivalent to 30 lempiras a day. By the time you spend 6 lempiras to get to work, you spend about 10 lempiras for breakfast, you have to spend 12 lempiras for lunch -- a little meal, like cup of coffee and two tortillas, or some rice and beans. You're spending virtually your entire day's wages just for surviving -- you're not talking about rent, education. You know what it cost to go to the doctor in Honduras? 60 lempiras. Two days' wages. In other words, the wages do not even come close to providing a living wage.

(SIS contacted Larry Rohter to ask him to respond to Kernaghan's assertions. "I think Charles Kernaghan is quite sincere in what he does," Rohter said, "But he paints a picture in which every worker is grievously exploited and unhappy -- and I think the reality is more complicated than that."

However, Rohter could not supply any wage data that contrasted with Kernaghan's research. Rohter's article said that a one factory worker's account of gaining 30 pounds and living in a brick house was "not unusual." When asked how many of the 48-60 workers he interviewed lived in as good or better circumstances, Rohter said, "Several -- numerous," but would not give an exact number. "I said, 'not unusual,'" he said. "That doesn't mean common or typical.")

A second argument of businesses is to deny that sweatshops exist at all.

They do that all the time. And if you're not dogged about going back and doing the research, they'll get away with it. Eddie Bauer was producing in the same plant Kathie Lee was. All Eddie Bauer said was, "we're not producing there." So we went out and bought the jacket, it said "Made in Honduras," found the worker, who said, "Yes, I made this jacket," and all of a sudden Eddie Bauer said, "Oh yes, we discovered we produced there." They'll just push our ignorance as far as they can go.

Right now, Disney's telling us "We're not really responsible. It's the subcontractors"

What about companies that say, "Yes, sweatshop labor is happening, but it's not our fault."

They always say that, too. The U.S. people don't buy that. Right now, Disney's telling us "We're not really responsible. It's the subcontractors." [at factories in Haiti]. So we say to Disney, wait a second. Here's a Pocohontas shirt, and what does the label say? Disney. What do you mean you're not responsible for this? Again, they're surviving on the ignorance of the U.S. people. They want the U.S. people to know nothing, to think they're getting a great deal, a low price -- don't ask any questions.

What about that argument about low price? Can you really pay someone a decent wage and still get a comparably priced garment?

Yes. What the workers in Haiti or Honduras are asking for is not U.S. wages. They're not asking for $10 an hour. What they're asking for is a wage that would let them have a modest one-room house and some food. In Honduras you could be talking about wages of 80 cents an hour that would be a living wage. In Haiti, the workers are getting now abut 28 cents an hour. We asked the workers what do you need to live on -- and they told us 58 cents an hour. They would live in utter, extreme, abject poverty but they wouldn't be in misery. 58 cents an hour.

And we demonstrated, with the [Pocohontas] shirt, how you can pay this wage and not drive up the cost. The workers got paid 7 cents to produce this shirt. This thing would sell for about $11.97 in Wal-Mart -- the percentage of the wage is just .5 percent of the sales price of the garment. Now, what we're asking Walt Disney or any other U.S. company is, if the wages add up to only .5 percent, who gets the other 99.5 percent of the garment's cost? Even if we leave that question aside, suppose you double the wages, so that the wages now make up 1 percent of the garment's cost. Do you mean to tell me the company doesn't get its profit holding onto 99 percent of the sales price? Of course, there's shipping and distribution costs, fabric costs and everything else, but do you need 99.5 percent? Wouldn't 99 percent be sufficient?

The last tactic that we've seen is that retailers say, "It has happened, but our company has its own monitors to make sure labor conditions are fair."

Well that's all bull. I wish I could say it stronger. The companies know that they have to deal with decency -- with the U.S. people. So what they've done is written corporate codes of conduct, and they say those codes cover all human rights of any worker anywhere in the world. And they say, "Well, who better to monitor this system than ourselves?"

Is it in their financial interests to police themselves?

Well, they don't. It's all hypocrisy, meant for the U.S. consumer. The best example was with the Gap, which is a fairly decent company. The Gap put out a corporate code of conduct -- it talked about no child labor, right to an education, no forced labor. The only problem is, no worker in Central America or the Caribbean has ever seen it. Not one single worker among thousands we have spoken to has ever heard of the Gap's corporate code of conduct. The Gap actually admitted that to us.

A company like Wal-Mart, for example, is very hands-on. Companies monitor the quality of these garments -- they don't put $10 million worth of fabric into a factory in El Salvador -- Liz Claiborne also has these giant factories in El Salvador that they contract with -- they don't put the fabric in there and walk away and say, "hey, we'll see you six months from now." They're in there every single day -- looking at the quality. If they wanted to do sweatshop monitoring they could do monitoring.

And in fact, what we said to the Kathie Lee Gifford and the Wal-Mart people -- they were in that factory in Honduras, Global Fashions, six times to do inspections. How could they miss the locks on the bathrooms? How could they miss 130 kids working in the plant? How could they miss the armed guards? How could they miss the tension, the lack of water?

"A can of Campbell's Soup is a day's wages for a Honduran maquiladora worker"

What about the economic consequences of sweatshop labor? Business is making the argument that it is good to seek the lowest wages, but why do you think this ultimately or immediately bad for business?

Again, you can go back to The New York Times article because they all make the same point. They say that these jobs are the surest way to the middle class. It's total nonsense. You don't go to the middle class with a 31 cent an hour wage where you're raising your kids on sugar water because you can't afford to purchase milk.

The thought that anyone making 31 cents an hour would ever be able to trade with the United States is stupid. Plain stupid. If you have money, even a little bit, you're going to give it to your children for medicine. A can of Campbell's Soup is a day's wages for a Honduran maquiladora worker.

We lost 99,000 apparel jobs last year in the United States. That's 10 percent of all apparel workers -- about 80 percent of them are women. And of course, if we allow companies to roam the world in search of the lowest wages and the greatest misery -- they'll be nothing left in the United States, because, obviously, what the companies are trying to do is pit the U.S. worker against workers offshore in a race to the bottom.

So who is this good for, and is it good in the short run or long run?

It's a quick fix. Unfortunately, that's how businesses operate in the United States.

And what happens in the long run? What are the economic consequences?

Look, I got more calls from manufacturers after the Kathie Lee Gifford story than I did from unionists. Manufacturers calling and saying, "It's about time." And a lot of them started to spill the beans. They said, "You know the big retailers, the Wal-Marts, the J.C. Penny, the Federateds, they're demanding of us in the U.S. the same prices they're paying offshore and we can't do it legally." So what we've allowed companies to do is not only develop these low-wage sweatshops offshore, they've brought them back to the United States.

Has the price retailers have been willing to pay manufacturers for a garment gone down in recent years?

Oh yeah. Because of the fact that there's been a greater consolidation in the retail industry. The large retailers are now in the driver's seat. If Wal-Mart controls 30 percent of your business, which is very common, if they take that business away from you, you're not hurt. You're dead. The retailers are setting the pricing so low for their own profits that people are forced to run these illegal operations.

Under the best forecasts of the Labor Department, by 2005 we will lose another 600,000 manufacturing jobs. They say the apparel industry is a "sunset industry," In other words, it's going away and we're all going to get high-tech jobs. If that's the case, it would still be wrong, terribly wrong, to exploit people offshore. But that's not the case. I mean, these people aren't returning to high-tech jobs. They're getting jobs that pay even lower, if they're lucky to get jobs.

What kind of a world do we want to live in? What kind of trading partners do we want to have? Do we want to have trading partners of "peons" like Larry Rohter said or 12-year-olds?

"Twelve-year-olds working in Honduras for Wal-Mart getting paid 31 cents an hour under armed guards working all night -- to me that's an emotional subject"

The National Labor Committee supports independent monitoring of factories to confirm that workers are being treated acceptably. Do you have a list of companies who have agreed to that?

The Gap's the only one. It's a short list. An we only won that only last December. But it's a very strong and compelling issue, and it makes sense to the U.S. people. So if Nike has nothing to be afraid of, why can't local human rights and religious organizations have access to the factory to guarantee compliance with what they say they're complying with? And the companies are terrified of that.

But we do have the Gap. We're in discussions with Wal-Mart and Liz Claiborne, so actually things are not going badly.

What's the National Labor Committee's next move?

We're going to start a campaign on Haiti. And all the Haitian workers are asking for is for Walt Disney to come to Haiti and meet with the workers in a safe location. Because in Haiti workers are fired for even speaking with a human rights person. Workers were fired for speaking with us. Workers want a safe location so they can speak the truth to Disney, they want Disney to see how they live on their 28 cents an hour wages, they want to take them to their homes, and they want to discuss with Disney independent monitoring and a living wage -- that would be 58 cents an hour.

In reading press accounts of your work, we've noticed reporters referring to you as a person who goes on "moralistic tirades," who uses "blowtorch rhetoric." How do you to respond to that characterization?

What they're saying is, I don't return their phone calls. Their defenses are so pathetic. First, like with Kathie Lee, they always try to sue. Then they say I'm a paid lobbyist, and I say come with me to Sixth Street [in Manhattan's East Village] and see where I live, you'll see what kind of lobbyist I am. Then they would say we're a front for the union, and our funding from the union is so small it's pathetic.

I'm supposed to go behind closed doors with a company. I'm supposed to shake hands with a corporate executive and everything's supposed to be fine. We're supposed to talk for six months, letters are supposed to go back and forth -- and nothing ever happens.

We've been through that experience, and we've been stabbed in the back. So what we're saying right now is the hell with them. We've had enough.

I also think that there is a moral aspect to this, and therefore, it is a passionate subject, and it is an emotional subject. Twelve-year-olds working in Honduras for Wal-Mart getting paid 31 cents an hour under armed guards working all night -- to me that's an emotional subject.

Getting to the factories and watching the workers go in -- these workers were making Gitano shirts for Wal-Mart. They went into work at 7:30 on a Saturday morning and they came out Sunday morning at 6 o clock -- you can see the bags under their eyes. They worked all night long producing Gitano shirts -- that's after working 12 to 13 hours a day Monday through Friday. And they told us they actually give them amphetamines -- "little white pills," they said. They had to stop because some of the kids went into convulsions and started throwing up. So you go through stories like this and you get an emotional reaction.

"Companies tell us that every time they get a letter or a phone call from a person, they assume there are 250 to 500 other people who feel the same way"

If consumers want to get involved in trying to improve these working conditions, what can they do? Can they avoid sweatshop-made products? Can they take other actions?

There's no easy answer. Someone's lying to you if they say they can come up with a list of 10 good companies -- here, shop at these 10 companies -- that's a lie. Some companies are good in the U.S. and lousy offshore. And here are sweatshops in the United States. Just like the Kathie Lee garments made in the U.S. It could say "Crafted with Pride in the USA," and it could be made in a sweatshop.

But that doesn't mean people can't have a huge impact. Companies tell us that every time they get a letter or a phone call from a person, they assume there are 250 to 500 other people who feel the same way. So they take these things seriously -- so when they start getting phone calls and letters -- that's incredibly powerful.

If people got involved in campaigns, like this campaign on Disney we're doing, or like the campaign in Canada to get Nike and Levi-Strauss to agree to independent monitoring, or kept pressure up on Wal-Mart and Kathie Lee Gifford, they can have enormous power, enormous impact. Independent monitoring could go very fast -- that's almost an immediate step. Then you go toward "no sweat" labels, and there's also legislation to put human rights into trade agreements.

The biggest thing I see for the future is there's this enormous network across the United States that no one's touching -- correctly. There will be days when we get 50 phone calls from organizations wanting to work together in campaigns or wanting to share information -- to me that's the future. It's very bright.

This Pocohontas shirt cost Disney about 7 cents in labor, Kernaghan said, and is sold in Wal-Marts for about $11.97

Reprinted with permission from SHOP! Information Services, the web's only ad-free, hype-free consumer news service for women

Photographs of Charles Kernaghan © 1996 Faye Ellman

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