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The shirt on your back: immigrant workers and the reorganization of the garment industry.


The shift of production away from export-processing zones in developing countries and back to urban sites in the U.S. is increasing in the multinational garment industry today. This research details that process, focusing on Philadelphia as a case study. Historical comparison discloses striking similarities between tendencies in the industry today and the characteristics of enterprises at its inception nearly 100 years ago. Part I summarizes the industry's origins in the U.S. at the turn of the century, based as it was on the exploitation of poor, young, female immigrants. Part II briefly outlines the considerations, especially labor costs, that motivated apparel manufacturers to move their operations to export-processing zones within developing countries (following relocation by some to the Southern states in the U.S.). Parts III and IV describe the recent pattern in which garment corporations are again turning to sweatshop production in the United States. In an historical parallel, low-wage immigrant women workers are once more serving as the labor force. Evidence for Parts III and IV is drawn primarily from Philadelphia as well as the New York City-New Jersey-Philadelphia corridor.(1)

To illustrate the manner in which U.S. multinational garment industries have moved abroad, especially to sites within developing regions, I have been fond of asking students in my Third World development class to turn to the person next to them and identify the country in which their clothing was made by looking at the label inside the collar. Guaranteed such foreign factory sites as Hong Kong, Taiwan, Korea, or Singapore, and, in recent years, Sri Lanka, Indonesia, Jamaica, Colombia, or Malaysia, I never failed to illuminate a dominant trend: the shirt on your back was made by women workers in a faraway, low-wage, Third World country. Of late, however, this exercise has been backfiring. Increasingly, students were shaking their heads. "Not hers. Hers was made in the United States." "Right. Mine says |Made in the USA.'" Recognizing a pattern too strong to deny, I pondered the question: What is going on with this foot-loose industry? How is it possible that these products are being made at home when conventional wisdom insists that U.S. unemployment in the garment-manufacturing sector, like other manufacturing industries, is caused by the movement of these plants overseas? The explanation lies in the increasing decision by multinational apparel corporations to contract garment production out to a network of underground sweatshops concentrated in New York, New Jersey, Philadelphia, Miami, Los Angeles, and Seattle, and scattered more sparsely from coast to coast.

Garment sweatshops are proliferating in the U.S. at a rate unparalleled since the 19th century, when young European immigrant women worked 12 to 16 hour days for a pittance. Today, the global garment-assembly line increasingly begins and ends on our own front steps. Wherever the garment industry has taken root in the U.S., unlicensed, substandard sewing shops have sprung up by the hundreds. They are illegal, off-the-books, pay no minimum wages, unemployment insurance, or health benefits and ignore child-labor laws or overtime pay regulations. In New York or Philadelphia, Asian or Latina women may be working 12 and 14 hours a day or 7 days a week, without overtime pay, to make the Arrow shirts or Liz Claiborne blouses we buy at the mall. One campaign alone organized by Mujeres Obreras (a group working to organize women in the border shops of Texas) has targeted 17 major garment corporations, 11 national retailers that own 26 department store chains, and 298 national brands as manufacturers and retailers of apparel produced in U.S. sweatshops. These are well-known brand names, ranging from K-Mart, Wrangler, Crazy Horse, and Izod to Hart Schaffner and Marx, Evan-Picone, Diane Von Furstenberg, J.G. Hook, Christian Dior, and Jones of New York. Hartmarx, Russ Togs, and Crystal Brands are among the larger corporations they identify, and Macy's, Bloomingdales, Saks Fifth Avenue, Sears Roebuck, and J.C. Penney's are among the retailers. Evidence provided by a variety of other sources - unions, investigative reporters, and independent researchers - is beginning to document this rapidly growing trend.

What follows is an investigation into the geographic origins of the shirt on your back, and, perhaps, some understanding of the reorganization of one sector of industrial capital within the world economy today.(2) In the process we will touch on some issues related to labor. Who are the workers who make clothing today and what are the conditions of their work? Are the patterns observed in the garment industry idiosyncratic, or are they also indicative of future trends (perhaps within other industrial manufacturing sectors)?

Four characteristics of the garment industry are important to note. First is the mix of capital and labor in the industry. Since the cutting and stitching of soft materials used in clothing do not lend themselves to technological rationalization that could completely displace the one worker, one machine ratio in producing one unit, the garment industry remains labor intensive (see Hoffman, 1985). Second, because of constant changes in fashion, the product market for apparel is both seasonal and demand sensitive. Third, stockpiling occurs each season when overseas orders must be placed 8 to 14 months in advance so as to be ready for the spot retailing market and to guarantee inclusion in country-of-origin import quotas. Fourth, economies of scale are not necessarily more efficient because of the labor-intensive nature of production.

Part I. Geohistorical Origins of the U.S. Garment Industry

A. Factors That Gave Birth to the Industry

Several factors contributed to die emergence of the apparel industry in the U.S. during the industrial revolution. First was machine technology - the introduction of the sewing machine, which replaced the time-consuming, hand-stitched work previously carried out in the home. Second was the surge in market growth as the burgeoning population and expanding personal income created a demand for ready-to-wear clothing and clothing of a fashionable cut and style. Finally, and of particular importance, was the presence of an army of young immigrant women available to be hired in the factories and workshops. Most did not yet speak English, nor were they familiar with the dictates and culture of American urban-industrial society since their roots were in the rural and working classes of Europe. Generally they found employment in the garment factories through word of mouth from family or persons originating from their village or region at home. Consequently, their jobs often represented a personal relationship and an employee-employer relationship. The social conditions of labor were characterized by long hours, low pay, and piece-work. Poor, young and inexperienced, the women were vulnerable to abuses imposed by the shop owners.

Garment manufacture was part of the sweated industry of the 19th century (Phizacklea and Miles, 1990). So labeled because of their small scale, low technology, and irregular demand, the sweated industries met the rush of unexpected demand by keeping the girls longer at their machines, and laying them off when there was a slack in orders. Sweatshops operated on a 60-hour week, but overtime extended it to 84 hours. In 1888, the average wage was $12 a week and shortchanging was common (Florence, 1951: 8-9). Crowded into lofts or narrow workshops, the factories in which young workers labored were drafty and cold in winter and sweltering in summer. In the sweatshop districts, contractors often used living quarters for workshops and deducted rent from the worker's wage. Shop owners, concentrating on accumulating capital, were unwilling to invest in worker safety. Besides other dangers, history has recorded the disasters brought on by sudden fire, which could sweep through piles of fabrics before the women had time to escape.

Young immigrant women stitched the shirtwaists and jackets (great)-grandpop and grandmom wore, and served as the labor-driven engine of what became a thriving and profitable industry in the U.S. Fashionable ladies and gents were decked out in their products; early accumulation of capital was stimulated by their labor power. In flight from poverty and sometimes political persecution, hardworking immigrant women stimulated the growth of the industry. Regional economies of the Northeast and the industrial heartland - New York City, Philadelphia, Boston, Chicago, and smaller cities of Massachusetts, New York, Pennsylvania, and states of the Midwest - were thriving. The value of industrial output in women's-wear production rose from $32 million in 1880 to $68 million in 1890, three times as fast as any other manufacturing sector (Ibid.: 7-8). In the 10 years after 1889, employment of immigrant women more than doubled; in Philadelphia and Baltimore, manufacturers met the boats directly to obtain workers (Ibid.: 8).

At the same time, increasing working-class incomes stimulated the market for women's, children's, and men's clothing. Women could make a statement when they wore the latest mode: "Our origins may have been humble, but today we can afford to dress with ready-made status like the comfortable Americans we aspire to be." Dressing her child in ready-to-wear clothes was a mother's declaration that she no longer had to sew at home as her once-poor mother had. For a population with immigrant and rural roots, wearing factory-produced clothing was often a symbol of status. Rather than being set aside from the dominant class in America by the rough and unstylish garb of poor European new arrivals or the homemade clothing of the farm family, their appearance intimated that they were the same as, and as good as, everyone else. Conformance to the outward appearances set by the dominant culture was a powerful influence in the pressure to assimilate.

The fortunes of both owners and workers in the garment industry were bound to this expanding market. Industry managers concentrated on producing the latest styles. Since fashion could now be mass produced instead of individually tailored, styles had to correspond to consumer mood and preference at the moment. Moreover, because the expanding market catered to a large working class and smaller middle class, the cost of readywear had to be held down. The sensitivity of the apparel industry to seasonally fluctuating, sometimes fickle, and always changing consumer tastes and needs rendered the turnaround time for production unpredictable - on occasion it was rapid and at other times slack.

B. Unionization of the Work Force

Within the industry, the demographic character of the labor force gradually changed. Although still dominated by female labor, the women workers were now older and perhaps less insecure and intimidated by their adopted immigrant home. As readywear output increased, the process of production was broken down into two main tasks: cutting and sewing. These tasks were divided by a sexual division of labor, with men responsible for the more mechanized cutting jobs and women performing sewing. In addition, as ready-to-wear clothing increasingly displaced hand-stitched clothing of men's suits and coats, it brought more male workers into the factories and workshops. Men who otherwise might have plied their trade as tailors were incorporated into apparel production especially as cutters and skilled workers who carried out heavier tasks. Similar to other industries, when more men entered the needle trades, pressures began to build to force wages up.

By the early 1900s, industrial production dominated the regional economies and the major cities of the North Central and Northeastern states. In apparel, capital had been reinvested in larger plants and more modern machinery, but smaller shops still sprang up and thrived. Workers were beginning to recognize the importance of labor organization if they were to obtain a greater share of the wealth to which they were contributing. The role of unions in negotiating better conditions of work in the factories and shops took shape. Sweatshop conditions were criticized, especially the practice of Wring and laying off workers in response to uneven demand on the manufacturers from the market. In 1909, 20,000 women shirtwaist-makers walked off their jobs in the first big strike, and six months later, three times as many workers struck.

By 1920, the International Ladies Garment Workers Union (ILGWU) and the Amalgamated Clothing and Textile Workers Union were organized in nearly 50 cities. "A decent day's pay for a decent day's work!" was their rallying cry. Beyond a 50-hour work week, double pay for overtime, and higher wages, the ILGWU was able to secure a system of regulation to counter the effects of irregular demand on the workers. This curtailed the ability of the shop owners to increase production rapidly by running overtime and then leveling off or stopping by reducing workers' hours (Waldinger and Bailey, 1986: 55). The proliferation of logos of the Amalgamated or the ILGWU, coupled with "Made in a Union Shop" stitched inside a garment, signified the successful organization of labor in the garment industry. In an effective media campaign, consumers were urged to "Look for the Union label" as a guarantee that the garment they wore stood not only for quality, but also for fair pay and treatment of America's working men and women.

Whether the plant was large or small, the structure of production inevitably remained labor intensive and competitive given the nature of both technological requirements and the product market of the industry. Owners could ill afford not to have their new seasonal lines ready at the beginning of each season. Nor did they want to lose out to their competitors by being unable to respond quickly when a new fad or image swept into the shops and department stores. The industry's need not to disrupt production at market-sensitive moments provided important leverage to workers and their organizations in the drive to bargain for higher wages and to rid the workshops of the miserable working conditions of the earlier years. Shop after shop was unionized as owners sought to avoid the risk of strikes that could prevent their orders from being ready on time. The early 1930s through the 1960s represented the zenith of the union movement in the garment industry; it was in tune with the popular mood of sympathy with organized labor. Inside the shirts worn by mom and pop was the union label.

C. The Beginning of Spatial Mobility in the Industry

Although some consolidation and centralization of production had taken place during this era, the industry was still dominated by a multitude of small factories and thus was highly competitive. Larger industries often contracted with smaller shops to carry out part of the labor process in order to speed up demand-sensitive output. By the 1950s and 1960s a new phenomenon was observed: the "runaway shop." So long as they were located in the highly unionized North Central and Northeast states, manufacturers were formally bound to the monetary and social-wage threshold for industrial labor that prevailed in the region (see Petras, 1981, for a discussion of the wage threshold). Not only was there general agreement on the wages and working conditions that workers in the region could anticipate for their labor, but there was also a strong cultural and moral code among the populace, most of whom were working class themselves, about what constituted fair and decent treatment of labor. This standard was generally subscribed to throughout the U.S., except for the Southern states; there the regional stance toward labor was reflected in the maintenance of the open shop.

The Southern states had their economic roots in the most extreme condition of coerced labor, slavery. Still primarily agrarian, they had resisted the era of union organization because they had never really passed through the phase of industrial manufacturing as it had transpired in other regions of the country. Nor had the South been a destination of the great European migrations, so the extensive exploitation of immigrant labor that sparked the organization of popular social movements and parties elsewhere was not a part of regional economic history. Probably the attitude toward labor in the South was residually tainted by the historical experience of slavery. Certainly, the cost of land and the level of taxation were lower because the generally lower level of urbanization and lower standard of living had not driven them up.

This setting attracted the labor-intensive garment industry. Since machine technology and the organization of production was relatively simple, shops and factories were not bound financially to the Northeast by heavy investment in capital plant and equipment. Many began to close their doors in the North and relocate to the South. Factory owners were able to substitute both young Southern white women and Black women and men - the Southern equivalent of young, newly arrived immigrant labor of a prior era - in place of the now mature labor force with its history of successful struggle to unionize the industry. As an alternative to the grueling work of farming or employment in personal service, work in the factories easily attracted a labor force. In the smaller towns and less urban or more gemeinschaft culture of the South, personal relations were still dominated by paternalism. A division of labor in which women were the machine workers and white males were the shop managers or foremen facilitated control of labor for the owner.

Compared with the environment of more advanced factories of the North, conditions were backward. Runaway-shop owners encountered a more docile labor force with no tradition of unionization, lacking in viable employment alternatives, socialized to the conditions of hard work, and most of all, poor. This regional shift permitted the industry to again manufacture clothing employing a more easily intimidated, low wage, primarily female work force. Since labor costs could be curtailed, the costs of apparel produced in the South were cheaper as well. This was the setting for the movie Norma Rae and her educated northern radical male colleague in their unsuccessful attempt to organize textile workers. In the runaway shops, young women sewed baby's clothes and mom's Judy Bond label blouses. At the same time, many smaller single-unit shops in the North were being eliminated. Production and employment shifted to larger multiunit firms as the process of reorganization of the industry accelerated (see Waldinger and Bailey, 1986).

Part II. The Shift to the Global Factory

A. Work in the Export-Processing Zones

From here the trajectory moves abroad. Leading the geographic exploration of U.S. corporations, which were becoming multinational corporations, garment-industry owners sought even better sites for low-wage, nonunion labor: the global factory. The global labor factory operates in more than one country. Often in special areas, export-processing zones are created in Third World countries by governments seeking to attract the manufacturing plants of international corporations. In clothing manufacturing, the entire garment may be completed in a single shop abroad. However, since global manufacturing breaks down the process into its many steps, while research, design, and management are carried out in the U.S., the garments may be partially assembled in one low-wage country, completed in another, and then shipped back to the U.S. for distribution.

Again, the industry capitalized on the availability of poor and young women, this time in Hong Kong, Taiwan, Korea, and Singapore. Reared in cultures where male-female relationships were highly unequal and the social division of labor was patriarchal and paternalistic, young women, often recently arrived migrants who had been socialized in an agrarian setting, were vulnerable to the social conditions of production set up in the garment factories. Since the basic sewing skills required by the work are part of home training for most young women, the operation of even sophisticated machinery was relatively easy to master.

In contrast to unionized factories in the United States, conditions of work abroad are more rudimentary and highly exploitative. The export-led development strategies of nations seeking to attract direct foreign investment meshed conveniently with the goals of multinational corporations seeking supplies of low-wage labor. Formal investment conditions were established in free-trade zones or export-processing zones (also known as export platforms or offshore facilities). A variety of benefits were offered to potential investors - tax holidays or tax concessions, low-interest start-up loans, physical infrastructure, including electricity, transportation, and communication facilities, physical plant, and, sometimes, housing for factory workers. Most of all, developing countries provided an unlimited pool of cheap labor, which many governments virtually guaranteed would remain unorganized and compliant.

The overseas departure of U.S. garment manufacturing began during the 1960s, initially to Hong Kong and Taiwan, and then on to Korea, Singapore, Malaysia, Mexico, and, later, to Thailand and the Philippines. These countries were incorporated into the "global factory"; young women workers became part of the "global assembly line." By following Sir Arthur W. Lewis' model of development, based on unlimited supplies of labor, garment multinationals were able to expand output, yet curtail operating expenses by availing themselves of the massive numbers of inexpensive female workers in low-wage zones.(3)

Initially, U.S. corporations shifted industrial investments to the Third World to gain access to markets protected by tariff barriers and to take advantage of the abundance of unorganized and cheaper labor, the proximity to natural resources, and the incentives offered by the "host" countries, generally in that order. The apparel industry, which remains highly sensitive to labor costs, took advantage of the eagerness of developing-country governments seeking to establish nontraditional or export-led industries that used their abundant and cheap labor as a "comparative advantage."

In 1959, imports constituted about seven percent of all clothing purchases in the U.S. By 1984, more clothing was being imported than produced domestically. The share of apparel being produced by the world market in developing countries rose from 22% in 1970 to 41% in 1981, while the share produced within developed countries dropped from 60% to 46% during the same period (Hoffman, 1985: 371). Within the low-wage zones, conditions of work were reminiscent of the sweatshops of the 1920s in the newly industrializing regions of the United States. Centrally controlled, conservative or right-wing governments generally prohibited or repressed union organization and political opposition. The work day of 10, 12, or 14 hours extended over a six-day week. The toiling of young women at machines crowded together in large rooms was reminiscent of the industrial lofts of turn-of-the-century Philadelphia or New York.

Gender relations in the workshop replicate those of the society. Supervisory positions are nearly always filled by males whose responsibility it is to ensure that the women work as quickly and efficiently as possible, but who also see that they are "disciplined." Because they have been socialized to behave with diffidence toward men, beginning with fathers or husbands, women are less likely to talk back to or disobey male supervisors. In this manner, the traditional behavior of women as docile and hardworking, promised to foreign investors in trade journal advertisements, is maintained.

In the export-processing zones, women begin working by age 16 (Kamel, 1990: 14). In the words of a superintendent of a Mexican maquiladora:

We like to hire girls who don't have too much experience because they aren't spoiled. We shape them to our needs by appealing to their feminine sensibilities. Then you can trust they won't fly off the handle, making unrealistic demands or joining unions. We like to think of our company as a family where everyone knows their duties (Fernandez-Kelly, 1983: 14).

Production was calculated to be speeded up roughly 25% over rates in the U.S. and working hours increased by 50%.

This is where school clothes for kids of the 1970s and 1980s were made: Izod shirts, stone-washed Levis or mini-skirts, form-fitting Jordache and Sergio Valenti jeans, the rugby shirts that had to be of a very certain style or the French Connection sweater, Levi jean jackets and tube socks and sneakers, preferably Nike or Adidas, and to top it all off, the 100% down ski jacket. During the 1960s and 1970s, Hong Kong, South Korea, and Taiwan contributed more than 75% of all garment exports from developing regions (Hoffman, 1985: 371).

By the mid-1970s, the Asian countries to which the U.S. garment corporations had been contracting out most of their manufacturing work had made significant advances in export-led industrialization. Not only were they exporting garments, textiles, footwear, and leather goods, but they had also claimed a niche in the world market in much higher priced consumer items, such as electronics and household durables, toys, furniture, tools, and machinery. Despite the outlawing or curtailment of labor unions and popular opposition parties, rising wages had begun to erode the competitive advantage of the Asian Four - Hong Kong, Taiwan, Korea, and Singapore. While still far below the U.S. union wage norm, corporate planners were nonetheless concerned that increasing labor costs were cutting into profits. Expressed in terms of 1987 U.S. dollars, hourly manufacturing wages varied greatly worldwide: Mexico ($.97), Brazil ($1.10), South Korea ($1.43), Hong Kong ($2.04), Taiwan ($2.12), Japan ($9.92), Sweden ($10.52), U.S. ($10.82), and West Germany ($13.16) (Kamel, 1990: 14). The strengthening of currencies in the Asian Four further reduced their attractiveness to U.S. apparel firm.

Meanwhile, other Third World countries were following the lead of the Asian Four in shifting to export-led industrialization schemes. Sri Lanka, Malaysia, Jamaica, Colombia, Indonesia, Mauritius, Dominican Republic, Uruguay, the slumbering giant China, Turkey, and even Greece and Portugal, opened their doors promising low-wage labor to direct foreign investors. For example, in 1965, Mexico's Minister of Industry and Commerce toured the factories in the export-processing zones in Asia and returned a convert. By 1970, the Mexican government had established its Border Industrialization Program, offering incentives to foreign investors that were not available to Mexican investors (Bustamante, 1983; Kamel, 1990: 15).

B. The Industry's View of Snags, Snafus, and Red Tape

As noted, labor skills, machinery, facilities, and technology prerequisites are not complex, making entry into the production of apparel fairly easy and not too costly. These factors lead to an industry structure composed of many small producers amenable to subcontracting; competition is high and profits low. In the U.S. (1980), materials represented 50% of total production costs for the industry, while direct and indirect labor costs accounted for approximately 35%. Total production costs among the Asian NICS were one-half the total costs for the industry in the U.S. By comparison, among the Asian countries, expenditures for materials comprised 40% of the total costs, while labor accounted for only 7% (Hoffman, 1985: 373). The routine script for the industry nearly always begins with mass production of seasonal clothing for the spot market: men's and boy's shirts, shorts, pants, and sports clothing, women's dresses, skirts, blouses, undergarments, and children's play clothing of all types. These lines share common characteristics: moderate to low prices, seasonal demands, relative simplicity of style, and mass construction as opposed to finely tailored, fashion designed garments. Spot markets cater to the latest fashion styles and fads that change not only from year to year and season to season, but also in response to fluctuations in weather, trends set by entertainment figures, and even minor economic cycles. Popular fashions in the United States and Europe in the spot market become relatively uniform, exemplified in the most extreme by the national costume: blue jeans and, at varying times, anything that might be constructed of denim. It is difficult to decide whether the uniformity adopted in fashion stimulated the mass production of clothing or mass production of clothing determined the uniformity of fashion.

To fine-tune the movement of goods from foreign factory to U.S. mall is complicated. Representatives from U.S. corporations had more or less adapted to doing business in Hong Kong and Singapore, where they had well-established ties, or in Taiwan or Korea, both countries with special political relations with the United States. Their national languages were different but they agreed on a common vernacular when it came to doing business. Among the Asian NICS the state generally served as facilitator between local contractors and foreign corporations. (See case studies in Gereffi and Wyman, 1990.) However, among other Third World countries less advanced in the requirements of contracting business on an international scale, corporate reps could not always rely on representatives of the state to be efficient in smoothing out deals or at least not presenting obstacles. Orders were often late in being shipped, specifications were not met, permission for importation of special materials withheld, and completion deadlines delayed. Quality often did not meet specifications for brand labels. Unpredictable red tape and bad timing snarled the process.

For new seasonal lines to be ready for retailers, U.S. corporations must place bulk manufacturing orders a full three seasons ahead. For example, orders for fall, back-to-school clothing that must be received by the department stores in mid-to-late summer, have to be manufactured and prepared for shipping from overseas during the prior fall and early winter month. Early placement of orders is necessary to guarantee that they will be permitted entry into the U.S. before the particular country's import quotas have been used up. This may push advance orders even further back. By early fall or possibly the summer of the previous year, designs from California, New York, Italy or France, and Spain have to be copied and modified for the U.S. market, contracts submitted to overseas manufacturers, shipping and distribution plans readied, and purchase orders by department and chain stores secured.

As trendiness and conformity intensified in the U.S. market, however, the speed of turnaround between orders and sales became increasingly critical. If a prolonged Indian Summer were to drag warm weather into October, or an early frost required purchase of winter clothing in September, garment corporations were stymied, unable to provide cool clothes for hot weather, stuck with too many warm autumn lines, or in need of winter clothing weeks before it was scheduled to arrive from overseas. Voracious competition in the clothing market fed on mass production, mass purchasing of a few popular designs, styles, and labels, and mass distribution through a network of retail chains. Coast to coast, clothing varied little from mall to mall. In moderate price lines, the market was large, but profit margins were potentially low and competition potentially high. Any number of problems could result in loss of a share in the market: a snafu in manufacturing schedules, the need to return items of unacceptable quality back to the factory, a bureaucratic delay in customs either at home or abroad, or lost time in arrival of shipments from overseas.

The need to initiate orders three-quarters to a year in advance interfered with the flexibility required by a competitive and fickle market. Consequently, companies usually ended up with seasonal overstock from their bulk orders, which they were forced to discount so as to close out inventories. Large mark-downs had to be compensated for by the very low wages of foreign suppliers. The miniskirt fiasco of three or four years ago is thought by some to be the straw that broke the camel's back. Merchandisers were left with bulging racks of miniskirts that American women simply weren't buying. Some apparel makers, apparently determined not to be caught again with their pants down - and their hems up - began to seek alternatives by bringing the factory work spatially and socially closer to the retail point so as to eliminate bottlenecks in the production-to-distribution chain. Geographically, transportation time had been shortened by manufacturing either in the maquiladoras (factories located on the Mexico side of the U.S.-Mexico border) or Item 807 or 807 [a sup.4] (Caribbean Basin Initiative countries) assembly contracts in the Caribbean free-trade zones. Still, there were legal borders to cross and social frontiers to bridge. How close then? Los Angeles? New York? Miami? Philadelphia?

Part III. The Circle Completed: New Actors, Old Practices

A. Post-1965 Asian Immigration

At one time, garment manufacturing in Philadelphia was second only to New York City. By the late 1960s, it had almost completely disappeared from Philadelphia, although it never entirely abandoned New York. Even at its lowest ebb, die old NYC garment district retained some production. Contemporary New York manufacturing catered primarily to expensive, tailored and designer fashion that could afford the costs of the older, skilled and unionized workers. This was less so in nearby Philadelphia, where only a few scattered mills remained of the mature industry. Moreover, the head offices of the industry - including the financial officers, the business reps, the showrooms of designers and wholesalers, and specialists who monitored various aspects of the market - never left midtown New York. Thus, it was not surprising for representatives to begin thinking of letting out jobs in the immediate vicinity, lower Manhattan. Labor and staffing for the reconstructed industry was a problematic issue, however.

The ethnic composition of the remaining New York businesses had changed since the early days before the organization of the ILGWU, when it was dominated by Jewish owners and Italian and Jewish workers. As older workers gradually retired and their third generation sons and daughters moved out of the city and into modern professions or jobs with greater prestige, vacancies were created that new immigrants began to fill.

At this conjuncture, the Asian population in the U.S. was expanding with arrivals from Hong Kong and Taiwan, and later, the refugees from Indochina. Under provisions of the Immigration Act of 1965, Chinese immigrants were again able to enter the U.S., particularly under the clause that provided for family reunification (Wong and Hirschman, 1983: 384-385). Prior to this, the Chinese population in the U.S. had been dominated by single men because of previous patterns of male labor importation from Asia and subsequent closure on immigration of Asian women, who had been specifically barred entry under provisions of the National Origins Act of 1924 (Takaki, 1989: 14). After the 1965 act, the influx of women and children from China began to accelerate. About three-quarters of the women were of working age, many had young children, and most of the new arrivals were likely to be living below the poverty level. Before 1965 in Philadelphia, for example, the Asian population consisted mainly of those residing in a small Chinatown. Between 1980 and 1990, however, Asian residents increased by more than 60% (The Philadelphia Inquirer, April 1, 1990, U.S. Census, Preliminary Report).

In New York and Philadelphia, as in California, the new arrivals provided a large labor pool with an urgent need for employment to help support their families. Thus, they were available, even eager, to work in the garment industry. In New York, the number of Chinese women working in Chinatown garment factories increased from 8,000 to 200,000 even as the total number of industrial jobs in the city was decreasing (Kwong, 1987: 29-30).

After 1978, the second wave of Indochinese refugees from the Vietnam War brought large numbers of Vietnamese and Cambodian women, who were mainly ethnic Chinese. Between 1980 and 1985, nearly 800,000 refugees from Indochina entered the U.S. for permanent resettlement. Called boat people because of their ill-planned and desperate escape to refugee camps in fragile junks and makeshift crafts, these people were very poor, less educated, and more likely to have rural or village backgrounds. In the Philadelphia area, it was this group that was most important to the sprouting sweatshops.

While refugee women may have been dependent on their husbands in Vietnam or Cambodia, in the U.S. they had to share responsibilities to help the family survive its initial adjustment and to pay their bills. In Philadelphia, for example, women from Vietnam who had arrived less than a week before were being taught in vocational-education classes to use various sewing attachments (personal interviews at James Martin Vocational School, Philadelphia, April 1990). Their instructor described their circumstances. Because they spoke no English and did not understand the urban transportation system, the women initially had walked nearly 30 blocks to get to the school. In February, one wore only the rubber thongs she had worn when she arrived. Another had no coat, although the temperature was near freezing. Their first formal act of integration into U.S. society was to master the semi-industrial size equipment used in the garment shops. Younger and older, all knew they would get jobs sewing after they arrived.

Entrance of undocumented or extralegal immigrants from Asia, including mainland China, also increased during the past decade. Besides lacking marketable skills, few if any spoke English, which is a credential for nearly all jobs in the U.S. except unskilled factory or service work. A teacher in the Philadelphia vocational-education program explained how she instructed Indochinese women, who had literally gotten "off the boat" a few days before and who spoke no English, how to operate industrial sewing machines. "Body language. That's all you need. Body language. You show them how to do something and they do it." Spanish-speaking immigrants, especially those from the Dominican Republic and some Central American countries, also joined the new immigration streams that supplied replacement workers for the reemerging apparel industry. Since none of these groups was English-speaking and they were without means and in need of income for their families, they have had seemingly few choices other than to accept employment in the sewing shops.

Employers, of course, prefer women, especially immigrant women, because they can be paid less. Women's work is undervalued here as it is in other countries. Garment manufacturers both here and abroad have several reasons for preferring Asian women as employees. First, Asian women have high economic participation rates at home, which means they are usually socialized to the conditions of paid labor. Second, patriarchal kinship organization renders them susceptible to authority and demands made by male supervisors. Asian women immigrants are among the cheapest labor available in the United States, and many are desperate for work. They quickly learn the simple skills required since most have learned to sew at home. The education level is fairly high for all of this group, with the possible exception of the boat people. Often this latter group of women is fearful, which, combined with cultural values placed on being cooperative, respectful, and modest, is viewed as submissiveness or docility. (See Taplin, 1986, for a discussion of these characteristics.)

B. Small-Scale Capital from Abroad

Meanwhile, the volume of capital flowing into the U.S. from Asia has been increasing. The 1965 legislation opened up immigration to persons with investment funds and to individuals with special skills or talents under labor certification classifications (Tomasi and Keely, 1975: 6-10). Under these categories, Asian businessmen with investment capital began to enter from Hong Kong, Singapore, Taiwan, and Korea. Hong Kong investors multiplied as more Chinese sought to remove their assets before 1997, when the British Crown Colony's 99-year lease from the People's Republic of China is due to expire. Taiwanese capitalist, jittery as U.S. trade and friendly relations with the People's Republic of China increased, similarly shifted fortunes abroad. Vietnamese and Cambodians, especially the ethnic Chinese, who fled with the U.S. troops as refugees after the defeat of South Vietnam in 1975, also took money and resources with them.

Just as Chinese women first took up the slack created by a retiring work force, so did Asian entrepreneurs set up sewing shops in the unused urban infrastructure - vacant lofts or store fronts abandoned by earlier factory owners who had either moved south, shifted production overseas, or retired. (See Sassen, 1988, for a discussion of this phenomenon.) In New York City, for example, ample, there were 34 Chinese-owned factories in 1965. In 1974, there were 209; in 1995, them were 500 officially recognized shops, although reports claim the existence of at least 3,000 sweatshops throughout the city in the 1980s (Leichter, 1982b: 3). Ninety percent of the garment factories employing Chinese women were owned by Chinese (Kwong, 1987). During the 1980s, as many as 1,000 garment shops are reported to have mushroomed in the Philadelphia area. The majority are owned by Hong Kong Chinese. In both cities and in New Jersey, Koreans and Vietnamese make up most of the remaining Asian owners. When asked to compare conditions for manufacturing in Korea, Hong Kong, and Taiwan with those of New York, a factory owner from Hong Kong observed that the former are now very expensive - for labor, quotas, and import duties. While he claimed that his five garment factories in New York are "swamped with orders through the end of the year," at the same firm manufacturers in Hong Kong are "shrinking, shrinking, shrinking. . ." (New York Times, October 8, 1991: D1, 7).

Greater protectionism under terms of recent Multifibre Trade Agreements provided additional incentives for Asian manufacturers to move operations. Import quotas assigned to Hong Kong, Taiwan, South Korea, and other Asian countries have essentially been frozen for apparel imports. Some firms in Hong Kong, Taiwan, and South Korea turned to subcontracting among several of the non-NIC Asian countries. Ironically, to confront increased protectionism in the U.S. and rising labor costs at home, other Asian apparel makers began to relocate to the U.S. primarily as a measure to cut costs. Higher labor and operating expenses in the U.S. are compensated for by money saved from costly import quotas (see Business Week, November 7, 1988: 116-118). For example, nearly all dresses and suits of the Nicole Miller label, maker of women's clothing retailed in stores like Saks Fifth Avenue and Bloomingdale's, are now made in factories in Philadelphia and New York. Making garments in the U.S., according to the firm's president, is what had "enabled him to price them competitively" (New York Times, October 8, 1991: D1, 7).

Among Asian ethnic groups, families lacking sufficient savings to set up small shops frequently raise the necessary capital through rotating credit associations or bidding clubs (hui). Although there are many variations of the mutual savings associations that are found among immigrant groups and in diverse parts of the world, they operate roughly in the following fashion. (See, for example, studies such as Kerri, 1976; Velez, 1982; Kurtz, 1973; Bonnett, 1981.) An association is formed with a core of friends or relatives who agree to make regular contributions to a fund that is given, in whole or in part, to each contributor in rotation. Thus, an individual who might need money to set up a shop could take the initiative in organizing a rotating credit association or hui by soliciting from among a group of close acquaintances a stipulated sum of money that is then placed in a common pool. Each member submits a bid indicating how much interest (s)he is prepared to pay for the use of the money. The highest bidder receives the pot first and so on. Those who want the money in the early rounds of bidding have to compete by paying a higher interest. On the other hand, wealthier members who are not in need of cash can collect the high interest paid by members who need the use of their money. This provides an investment opportunity for the wealthy and start-up funds for the entrepreneur (Light, in Takaki, 1988: 85-86). In Philadelphia, several of the rotating credit association members interviewed were women.

Not infrequently, Asians who still reside at home transfer money to overseas family members in this fashion. In turn, these overseas members may use the funds to set up small shops, or other activities, abroad. In some instances, these entrepreneurs may pay the costs of passage abroad for others, generally young women, in return for a guarantee of their labor in the owner's factory until the expenses of passage have been paid off.

This is the manner in which many young women working in the Philadelphia shops are now entering the U.S. More insidious, and resonating of the turn of the century industry, are the documented cases where the shop owner also requires the women to take room and board on the shop premises. Besides signing an agreement that they will work for the owner without wages until they pay off their passage, the women often also agree to have the cost of room and board deducted from future wages. Thus, a chain is set up that can bind young and vulnerable immigrant women to work in a shop almost indefinitely. Smuggling networks based in Hong Kong and China have relied on a variety of techniques and entry points to bring in immigrants. Reports in New York claim that the cost of assisted passage and employment can run as high as $30,000 (Hays, 1990: B1). Once here, these workers may become little more than indentured servants, laboring endlessly to pay off a never-ending debt. In the labor market of the clandestine or submerged industry, immigrants, even those who may be educated or professionally trained, risk being unable to save enough money and to learn English in order to move out. (For recent investigative articles on this practice, see Chan and Dao, 1990.)

As a condition of being sponsored by a U.S.-based relief agency, Indochinese refugee women agree to take employment, on their arrival, to pay off the costs of their airfare. Philadelphia relief agencies such as Catholic Social Services or Nationalities Service Association are careful to refer refugees only to legitimate and legal employers. Those who speak some English may work in nursing homes or hospitals, for example. Through word-of-mouth, however, many women find jobs in the sweatshops. Most simply say that they "want to work in my neighborhood," a preference explained by their lack of familiarity and trepidation about life in the city, as well as their need for the sense of security and protection offered within their ethnic community. Women often bring their children to the shops because they have no one to care for them. Cases of children working in the shops have been documented. In one shop in a Philadelphia suburb, an informant described women at their machines with their children helping with small tasks beside them. The group was "entertained" by videos shown on a screen in the front of the room. At home, youngsters often help their mothers with the stitching details of industrial homework, especially when an order must be finished quickly. Immigrant women find sewing jobs through relatives or friends of friends, or through the informal grapevine - just as poor women arriving from Europe located jobs a century earlier.

C. Inside the Current Trend

We have referred to four factors stimulating the growth of apparel manufacturing again in the United States:

1. Availability of cheap female immigrant labor from Asia (and Latin America);

2. Increase in the number of small investors, especially those bringing capital from Asia;

3. Protectionist legislation of recent Multifibre Trade Agreements; and

4. Rising wages and strengthening of currencies in Asia.

However, the central factor stimulating the proliferation of sweatshops and homework in New York, New Jersey, and Philadelphia, as in California and Florida, has been the decision of American manufacturers to shift their production orders back to the U.S. as a cost-cutting measure. Responding to the potential advantages of access to manufacturing shops in their own or a nearby city, industry representatives have been quick to increase orders submitted to local brokers who in turn contract jobs out to the expanding network of Asian capital and labor. Take, for example, Perry Ellis clothing. Two years ago, their products were made in Hong Kong, Taiwan, or Macau. Today, 40% of their clothing is manufactured in the U.S. Twenty percent of the production of Arrow shirts has moved back to the U.S. Seminole Manufacturing has down-shifted their offshore production from 40% to 20%. The Gap, maker of popular casual clothes for young people, reports that men's pants can be obtained for about the same price as those from Hong Kong (Strom, 1991: D1, 7). The lower prices of the Gap resulted in an overall sales increase of 41% last year at a time when other retailers were reporting slumping sales (Rosenberg, 1991: D1, 5). Contractors that serve Lord and Taylor, Evan Piccone, Leslie Fay shirts and skirts, and the Limited (with a 16% overall increase of sales in the past year) have shops located in New York City, New Jersey, and, increasingly, Philadelphia. Even the Italian line Benetton is now manufacturing in North Carolina. Nancy Reagan's favorite high-fashion designer, Adolfo, farms out to Ruth Fashions in Queens. Ruth Fashions farms out to homeworkers. In 1982, the N.Y. State Attorney General cited Ruth Fashion as a chronic violator of laws prohibiting homework. One-half of all the sportswear made in New York City today is made in sweatshops. A quick check of Misses and Teen wear in a Philadelphia suburban Macy's identified 38 out of 54 items bearing "Made in USA" tags. These labels, along with the brand-name labels and often the price tags, are provided to subcontractors with bundles of cut material to be stitched directly into garments that are then hung on hangers and delivered to the manufacturer, or in some cases, directly to the retailer where they are steam pressed and placed on display. Without a union label, "Made in USA" is likely to be synonymous with sweatshop production.

In apparel production, the key actors are manufacturing firms or jobbers, brokers or contractors, cutting and sewing shops, and truckers. Design and pattern making, selection of fabric, and marketing to retailers are tasks of the manufacturing firms Gobbers). They submit the manufacturing job to a broker or contractor. In turn, the contractor (who is likely to be linked to a trucking firm) subcontracts the assignments to owners of shops or small factories for the actual specialities of cutting or stitching, which are usually carried out in separate locales. Shop owners engage workers, generally at piece rates, to perform the work. In a typical operation, middlemen contract out fabric for cutting to one shop in New York City, then farm out bundles of precut fabric to other shops in Philadelphia for stitching. A sewing shop owner may fill his contract within his own shop, send extra work home with employees, or parcel out jobs to other homeworkers who use machines that they own or rent from the shop owner. The broker, whose role is similar to that of the merchant in a putting-out system, sees that finished garments are picked up and delivered to the parent corporation (jobber) where they begin the jaunt to the retail chains, the malls, and the customer.

Central to the process are the truckers, van drivers who move raw materials to cutters, cut pieces to stitchers, and finished garments to distributors. Without the truckers, nothing moves. For manufacturers, the trucking lines are an important link in determining the speed with which orders can be filled. For shop owners, it is virtually impossible to obtain work from the jobbers without going through one of the trucking lines. From truckers to workers, most transactions are in cash so they can't be traced or taxed. Through a system of bogus invoices, many large companies manage to deal only in cash and thus avoid taxes as well. Most important, informants inside the industry describe the control of the trucking network by organized crime. Drivers who run the vans between New York and Philadelphia, delivering bundles of precut fabric and picking up finished garments, are employed by firms owned by organized crime, mainly the Gambino Brothers and the Lucchese family. Undercover investigations in NYC, as well as by the New York State Crime Commission and the New Jersey Commission of Investigation, confirm what is common knowledge inside the industry about the role of the trucking lines (Leichter, 1983; New Jersey State Commission of Investigation, 1990).

Not infrequently, a garment corporation or a trucking firm may help set up small factories by providing actual start-up capital or by "farming out," whereby the manufacturers or equipment suppliers provide credits with low payments to be paid back over a period of a year or two. In these cases, the subcontractor may do the work in his own shop. Alternatively, money may be borrowed from one of the above-mentioned firms, which arranges for the leasing of sewing and steam-pressing machines, recommends a certain manufacturer, and arranges for getting jobs - all in return for a substantial kickback. Because of the seasonal irregularities of the industry, it is often cash short. At these times, small operators turn to "money men" associated with various crime families for financial support (Leichter, 1982a: 27; Depositions, New Jersey State Commission of Investigation, 1990). This is the specific segment of the corporate network that organized crime is reputed to run (Leichter, 1982a: 5).

IV. An Industrial Profile with Examples from Philadelphia

A. Garment Sweatshops and Immigrant Women Workers Return to


Early in the 1980s, pressures began to converge on the shops in New York. The New York State Department of Labor, along with the unions, were concerned not only with fact that the shops were unorganized, but also with the degree of wage exploitation, employment of underage labor, the dangerous working conditions, 12-hour work days, and six and even seven-day work weeks (see Leichter, 1982b). There was also consternation about suspected increases in industrial homework, which is illegal under federal law.(5) Since both workers and owners work off the books, they manage to pay few, if any, federal, social security, income, or other payroll taxes. Thus, the industry was under surveillance by state and federal tax officers. Finally, city and state crime commissions were continually probing the involvement of families associated with organized crime in securing contracts from the companies, specifically, the role of the Gambino brothers (Thomas F. and Joseph), and the Lucchese crime family in running the trucking operations (Raab, 1990: B5). Furthermore, as more and more foreign and domestic capital flooded the real estate market in Chinatown, commercial and rental space had become so scarce and costly that it was no longer affordable as property for sweatshops (Lim, 1989: 12-16).

During this period, the State of New York imposed stricter measures against industrial homework and enacted a new Class-B felony of "enterprise corruption." Whether the primary cause was this legal crackdown or some combination of factors, including skyrocketing Manhattan real estate costs, a sector of the industry began to shift across the river to New Jersey. Within a year, New Jersey, too, initiated investigations followed by similar restrictive legislation and crackdowns. The New Jersey State Commission of Investigations continued to expose the connections between organized crime, illegal money transactions, and garment sweatshops. It was around this time that evidence of the industry began to surface in Philadelphia.

Philadelphia, a traditional industrial city, even until recent years was a staunch and tightly organized union town. The original garment industry, with its ties to the large-scale influx of poor European immigrants at the turn of the century, was organized by the International Ladies Garment Workers Union and the Amalgamated Clothing and Textile Workers Union during the 1930s. Beginning in the 1960s and continuing through the 1970s, the industrial base of the city gradually eroded. What remains is a mere ghost of its former industrial strength. Like New York, the demise of manufacturing production left behind unused industrial capacity. However, unlike Manhattan, where speculation in real estate has driven prices out of the reach of all but wealthy investors, in Philadelphia real estate prices are still relatively low. Philadelphia may also have been chosen because several crime families retained "controlling interests" in a few garment concerns in Northeastern Pennsylvania (Pennsylvania Crime Commission, 1991). Joseph Gambino and two of his employees' visits to Philadelphia sewing shops to obtain trucking-sewing contracts were documented in their 1990 indictments for enterprise corruption, extortion, and coercion by the Manhattan District Attorney's Office and by the New Jersey Commission of Investigation (Ibid.; New Jersey State Commission on Investigation, 1990).

Old factory lofts in center city that may have housed apparel or other industries half a century ago can be picked up for a small price today. Dilapidated store fronts that can be converted into sewing workshops are abundant along North Broad and North 4th and 5th and throughout the Olney, Logan, and West Oak Lane districts. These locales are minutes away from Interstate 95, which leads to the New Jersey State Tumpike. From there, it is a one- or two-hour haul by truck or van to the heart of the fashion industry in New York City.

Asian investors, with an eye out for business locations, are buying rundown, cheap real estate in these Philadelphia areas as well as in Northeast Philadelphia and Northern New Jersey. With a few alterations, these sites can be transformed into little shops where Asian women will stitch clothing. Since working off the books means circumventing taxation, as well as violating labor, safety, and fire regulations, shop owners avoid attention by painting windows black or brown or by keeping iron gratings pulled down and the windows barred. Women may be jammed into shops hidden in garages, basements, or apartments. One shop with as many as 10 young women at their sewing machines was discovered in the back rooms of a busy dry-cleaning establishment. A van driver who delivered and picked up piece goods instructed me to stand in the doorway of a popular Chinatown restaurant and look up at the two ancient buildings directly across the street. The second, third, and fourth floors of each appeared as if they were either empty or used as storage facilities, but he assured me that one of the buildings housed four different factories and the other contained two. "They're not very nice," he said. "Lots of stuff piled all over. No running water. Really filthy with rats and stuff. They're all like that." Many of the smaller and more crowded establishments are located in apartments and basements and are therefore difficult to locate. One investigator reported a "production line" that covered an entire block. One detail of production took place in one house, the goods were then run over to another house where the next task was completed, and so on, until the finished garments had been assembled. In other locales, I have walked a block with confirmed addresses of workshops, but was unable to identify them.

In one instance, a shop that had been observed was discovered to have closed; later, it was identified under a new name, having relocated elsewhere. This practice is common since it is often the only way to break away from the control of a specific trucking firm. To obtain work from the jobbers, a shop owner needs to establish contact with one of the established trucking lines. In the words of the business, once this occurs, the contractor is then "married for life" to that trucker. "Buying a stop," a practice in which a trucker initially pays money to a sewing contractor in return for the exclusive rights to be his trucker, is common. Because of the threat of violence, the only way to switch trucking companies may be to shut down altogether and later to reopen with a new name. An informant who had worked as a NYC-Philadelphia driver for several years explained that none of the little shop owners has fixed relations with specific corporations. "They are always searching for contracts, and they have to get them through the network." The practice of closing and reopening under a different name also frustrates IRS or city tax agents who might be interested in investigating these phantom activities. In 1990, for example, owners of one Philadelphia garment factory, Master Enterprises, were charged with paying a $24,000 bribe to an IRS agent so as to avoid paying taxes on this firm and three subcontractors (Pennsylvania Crime Commission, 1991: 305).

Over the past five years, subcontracting by major garment corporations to Asian-owned shops in Philadelphia has multiplied. Conservative estimates provided by the International Ladies Garment Workers Union place their number at about 100. Owners of the shops that sell and repair industrial sewing machines, basing their estimates on the number of clients to whom they sell and maintain machines, claim there are as many as 1,000 of these shops now operating in the city. Workers and persons who service the industry in Philadelphia describe overcrowded and unventilated conditions, without heat in the winter or cooling systems in the summer, when steam from the pressing machines makes humidity even more intolerable. With permanently barred windows, no fire doors or fire escapes (or where they exist, they are normally locked), the danger of fire is always present.

Investigations into New York shops revealed aisles blocked with piles of clothing and doors blocked by equipment (Leichter, 1983: 4). The following descriptions are presented as typical of garment shops:

...Room appears to be about 20' by 30'. Rear door is closed tight and cannot be opened. Front entrance (and apparently the exit) is narrow and partially blocked by garment racks. Floors were littered with piles of garments. There is only one small window with bars.

...19 sewing stations and several steam pressing machines. Room appears to be about 20' by 30'. Rear door is sealed with a padlocked sliding door. Front entrance is small and partially blocked by garment racks. Floors are littered with piles of garments, blocking aisles. There is one small, closed window, barred shut.

...There is no back door, but there are two side doors, one of which is blocked by a table, and the other one is hard to open (there is a dead-bolt lock and the door sticks). All windows are permanently barred. The shop has a time clock, but there are only four time cards, in spite of the 20 workers on the premises. The time cards have only a first name, and none have been punched (Leichter, 1983: 26-27).

A year ago a Philadelphia fire raged through a rowhouse owned by a family of Vietnamese refugees in the Kensington district. Three children were killed. In the charred remains were found sewing machines and melted bolts of fabric. Neighbors described the network of family members who worked together as homework contractors. Some months later, a fire broke out among bolts and piles of fabrics stored in an apartment where a group of Cambodian women was working in Philadelphia. A few years ago, fire in a Brooklyn garment shop killed one person and injured several. The building's stairs were blocked and the building had no sprinkler system. These events occurred almost 80 years after 146 young immigrant women and girls perished in New York's infamous Triangle Shirtwaist fire. Starting among scraps of fabrics, that fire spread through bolts of cloth. There were no sprinklers. One set of doors to the stairs was locked. The only, flimsy fire escape had collapsed. The owners of Triangle Shirtwaist Co. were tried and acquitted of manslaughter. That was in 1911. Shockingly, too many similarities are found in the shops of 1991.

Because of the organization of the underground or submerged economy, precise counts of the number of operations are impossible to obtain. What is certain is that they are illegal on several counts and invisible to most, except those who know from inside sources where they are located. In all probability, the burgeoning garment activity in Philadelphia constitutes not only the largest manufacturing operation in a large and growing underground economy, which works "off the books," but also conceivably may even be the most dynamic manufacturing activity in the city's industrial sector today.

B. Wages, Prices, and Costs

Competition to obtain orders is fierce in Philadelphia, as elsewhere, particularly during the slow seasons (although during the summer months, some women pull out of garment work to join their families in picking berries and harvesting the fruits and vegetables of South Jersey's agribusiness). Only one segment of the industry has been captured by Philadelphia. Cutting of the fabric, which is more highly paid work than sewing, is generally carried out in New York. In the gender division of the labor process, cutting is, for the most part, a male occupation.(6) Contractors truck the stitching component of the process primarily to Philadelphia. Apart from this division of tasks, the industry is organized more or less along the same lines as that of New York City. The exception is that perhaps there is more homework in Philadelphia, which can probably be explained by the rapidly expanding population of very poor Cambodian and Vietnamese refugees. Homework, which is even more exploitative, further cuts labor costs. Jobbers give women bundles of cut fabric to sew at home, pay them less than shop wages, and make workers assume overhead costs such as purchase and repair of sewing machines, electricity, etc. Many homeworkers use their children to help them meet deadlines. Legally, homework is limited to detail work such as stitching on pockets, sewing belts, embroidery, or tailoring points, but these restrictions are ignored when pressures from firms demand a speedy turnaround of an order.

Wages in the shops are usually paid by the piece. A women may receive $1.20 to $3.00 for a garment that takes up to one hour to sew. Eventually, the contractor will be paid $10 to $20 for the item, which may have a price tag of $50 to $75 when it leaves the retailer. In New York, a shop owner may get paid $1.00 to produce an average blouse, which will be on the racks in Midtown the next day for $20 or more. Jobbers are reported to have reduced prices on the average dress contracted to a Chinatown shop from about $6.00 in 1977 to about $3.50 in 1983 (Ibid). An owner of a sweatshop in New York complained bitterly that he gets only $2.75 for each dress and that the price keeps going down. In Philadelphia, one contractor pays a shop owner $5 to $10 per dress. He, in turn, pays a worker $1 to $2 per dress, but if a woman is driven to work 16 to 18 hours a day, she can stitch 100 to 150 dresses a day (or 600 pairs of shorts a day, as one informant's mother did). Abuses by trucking contractors may further reduce the amount received by shop owners. Besides traditional kickbacks of a specified amount per garment or per order, truckers sometimes force "chargebacks" on subcontractors. In a hypothetical case, a trucker contracts a shop owner for 500 dresses at $7 per item, for which the trucker will in turn receive $14 from the jobber. The jobber, for whatever reason, is willing to accept only 400 of the dresses. Rather than absorb the loss, the contractor forces the shop owner to take back the additional 100 dresses. However, instead of taking them back for $7 each, the original purchase price, the contractor forces him to take them back at the cost of $14, which the jobber would have paid. This practice seems to be occurring more frequently as the retail market for clothing has tightened.

In Philadelphia, a women may take home $15 for 8 or 9 hours of work. In New York, weekly take-home pay as low as $50 or $60 has been reported. Late and partial payments are common. Cases recounted by ILGWU spokespersons describe situations where women aren't paid on time or what they have been promised. A group of women working in Queens from 7 A.M. to 11 P.M. was promised $15 a day. When the employer finally paid the women, the checks bounced. When the union tried to intercede, the employer said he would pay only if they showed their green cards to prove legal documentation. (The women never received their earnings.) (See La Mujer Obrera Program and New Jersey State Commission of Investigation for documentation of similar cases.)

Although the law in all three states requires payment of an hourly wage equal to the minimum wage of $3.80 even when workers are paid by the piece, the use of piecework permits payment of subminimum wages to workers. Payments for piecework change from day to day and workers often cannot keep track of the shifting wage rates (Kwong, 1987: 63). Of course there are no health, vacation, or social security benefits attached to employment in the sweatshops. The steady compression of prices paid by jobbers not only causes owners to keep pay below livable levels, but also insures that they will not invest in improving shop safety. In Philadelphia, where sweatshop labor is so cheap, women often work from eight in the morning until eight at night and then take home extra work that they labor over for another three or four hours at night. Failing eyesight and back ailments are commonplace. As the garment industry undergoes serious decline because of the current recession, competition has increased and cost curtailment, along with the costs incurred in practices such as "takebacks," are ultimately passed down to the shop workers.

C. Workers, Shop Owners, Organized Crime, and the Corporations

Unlike New York, where there is a smaller Latina work force in addition to the Asian workers, nonunion sweatshop workers in Philadelphia are mainly Asian. Mutual-aid associations and agencies working with refugees in Philadelphia report that the Asian population living at poverty level has been growing steadily over the past two years. Word on the grapevine of work in Philadelphia is drawing Cambodian and Vietnamese families from as far away as the Fresno, California, settlements and Kansas. Philadelphia's new Asian population and sewing shops are concentrated in a few areas: Walnut around 46th, the Olney, Logan, and West Oak Lane districts, South Philadelphia, and Chinatown. The pattern conforms to the preference of women to work in the neighborhood where they live. It also reflects the fact that employment is commonly secured through friends, relatives, or persons from one's own home area, and these networks are likely to be spatially concentrated by neighborhoods.

Inside the shops, where the structure is organized like a family, with the owner in the paternal role, women are not likely to refuse to cooperate or make demands on the owner whom they view as their protector. This is especially true for women who do not speak English and who don't venture outside their immediate neighborhoods. Refugee women are often still frightened by both the traumatic circumstances of their arrival and the new, alien setting. Having gone through the social upheaval of war and the squalor of refugee camps, they are eager to earn a living and will often work under any conditions. Sometimes, they may be receiving welfare supplements (two years' support from the federal government after which responsibilities shift to the state). Under these circumstances, any income they can earn will be accepted.

Some women who have entered the country through extralegal channels do not have immigrant documents, which makes them vulnerable - or makes them feel vulnerable. Contractors sometimes use the threat of deportation to retain women in abusive conditions of work. For example, social workers recounted the case of one Philadelphia entrepreneur who brought women from Korea under false auspices, claiming church-related exemptions. In fact, they were imported specifically to work at minimum wage in a garment factory, and the owner held the threat of disclosure of the details of their entry over their heads as a means of social control.

Although their anxieties are often unfounded, fear of legal trouble or deportation frequently haunts immigrant women. Shop owners often fuel their worries, discouraging women employees from having direct contact with outsiders and directing them to trust the owner to solve any problems they may have. On the one hand, this binds the employees to the owner and reinforces the paternalistic structure of the workplace. On the other hand, it also insures that the women will neither complain about conditions nor leave the job. In addition, some women may be related to or known personally by the owner and a relative of the owner frequently functions in the role of a supervisor who ensures that the women work hard and do what is asked of them. Thus, kinship or clan relationships function as a system of worker discipline. Nevertheless, as the interface between owner and worker deepens, kin relationships gradually give way to class relationships (Ibid: 67).

Organized crime's power and influence in the garment industry spread through their control of jobbers, trucking firms, and trucking trade associations. Conversations in which threats and extortion demands were made have been recorded by investigators in New York and New Jersey where crime families have a monopolistic hold over transportation. Trucking company representatives inform shop owners about which trucker has the sole right to move their goods and state that there will be no negotiations over prices. Even if the owner were able to shift to another trucker, he would still have to pay the one designated by the organized crime representatives (Raab, 1990: B1, 5; New Jersey Commission of Investigation, 1990). Part of the purchase price of every dress made in the sweatshops goes directly into the pockets of organized crime through inflated trucking charges, outrageous interest demands, payroll padding, kickbacks, and other illegal or quasi-legitimate practices (Leichter, 1982b: 2). The Gambino and Lucchese families, as well as other crime families, skim off money that might otherwise go to the thousands of immigrant women working for less than minimum wage.

Why do the garment corporations do business with them? The main reason is that the manufacturers are able to save as much by using immigrant labor in the sweatshops as they would if they were importing the garments from Hong Kong or Taiwan. All of these corporations have used Third World production sites extensively. They are familiar with bribes, kickbacks, and rough and exploitative treatment of women workers and foreign small-business people. These practices were built into the costs and benefits of manufacturing abroad and they were carried out with impunity. Indeed, some practices of keeping labor "in line" were not so subtly implied in the incentives governments offered them to invest in the first place. Returning to the U.S. after several years abroad, the manufacturers are hooked on their own power and rights over labor and the labor process that had been guaranteed to them by the state in the free-trade zones and the global factories of Third World countries. In New York or Philadelphia, organized crime plays the policing and repressive role that is performed by the national security states in Third World countries - assuring that orders will be filled on time, monitoring all the links in the production process, and keeping unions out. As one New York sweatshop owner explained, "These people will do anything to keep us in line" (Leichter, 1981: 16).

It is sometimes asked whether these corporations know where their clothing is being manufactured and under what conditions in the U.S. Of course they do! Have they observed the conditions and wages for workers in industries in the Third World, where they have been obtaining their products for the past 15 or 20 years? When they manufactured their clothing in these countries, were they aware that oppressive regimes prohibited labor unions, banned opposition parties, and outlawed freedom of the press, speech, and assembly? Did they know about the open shop and the conditions of labor in the American South before they ran south with their shops? Are they aware of the role of organized crime in their manufacturing network in the United States?

Investigators have checked labels of clothing being manufactured in sweatshops and later identified the same labels on racks at major department stores. When questioned, executives of firms known to have garments sewn in sweatshops professed no information about where their products were being manufactured. "It's none of our business," and "We just send the stuff out and if comes back done right, that's all that matters," were responses given a New York State investigator. Others admitted that their sewing work is done within the U.S. and not in the legitimate factory sector. However, they also protested, "We use regular labor. We don't want any trouble" (Ibid.: 25-26). Yet hundreds of prominent New York garment district manufacturers, cutters, truckers, trade associations, and union locals took out ads in the journal that honored Thomas F. Gambino as "Man of the Year" at the Jack Finkelstein Fund Dinner held at the Plaza Hotel on November 21, 1981 (Leichter, 1982a: 11). Certainly they know that their labor costs are exceptionally low in the United States today, low enough to compete with labor and overhead costs in the Third World. The reorganization of the garment industry reflects the boldness and ability of corporate efforts to deny workers established developed world wages and to shift Third World wages back within the boundaries of the U.S.

According to recent studies of the industry in New York, most Asian small shop owners do not make much money and most garment workers do not earn much more than $15 for eight hours of work (Leichter, 1981: 4). Profits in this industry are in the billions. The bulk of savings from low wages are passed on to the main manufacturer although the "take" from trucking overcharges in New York's Chinatown alone is estimated to be at least 10 million dollars each year (Leichter, 1982b: 5). Major retailers - Macy's, Calvin Klein, Evan Piccone, Liz Claiborne, The Gap, Perry Ellis, Penney's, from Sears to Saks - are all profiteering by selling sweatshop-produced garments at inordinately high markups. In New York State Senate investigations, manufacturers reported they could save up to 50% by using overseas labor. However, if they use Third World immigrant labor working at subminimum wages in the Philadelphia-New Jersey-New York region, they can match these cost reductions also factoring in additional savings from reduced transportation costs and benefits for rapid turnaround time. "If (name of national garment brand name) suddenly calls and says they need a thousand dozen, I can have it for them very soon if my work is done right here," explained the president of a small firm (annual sales only $1 million). Additionally, this eliminates the worry of dealing with overseas bureaucracies, letters of credit, and import quotas (Leichter, 1982a: 33).

Women, it is said, hold up half the sky. With the reorganization of capital on a global scale, based as it has been on substituting labor for capital in certain industrial lines, women seem destined to hold up even more than half of the industrial sky. Global proletarianization of female labor has brought a new and unlimited supply of labor into the international industrial labor force. During the 1970s and 1980s, developing countries pursued export-led industrialization policies based on their "comparative advantage of the factors of production." For the typical developing country, which was capital short, but with abundant labor, this translated into industrial development based on low-wage workers. In turn, this introduced women into the mainstream of global manufacturing. While paid labor of women in the developing world became increasingly important in the global industrial labor force, in the developed world, women's wage labor was moving steadily out of blue-collar work and into service activities, both low and high paid, retail sales, and lower-paid professional occupations.

As is customary with such large supplies of reserve or surplus labor, this newly proletarianized female labor pool has depressed wages internationally. Immigration has shifted some of the low-wage female industrial labor force from less-developed countries to Europe and the U.S. The case of the garment industry documented in this study is being repeated in London with Indian, Pakistani, Greek Cypriot, and West Indian women, in Paris with women from Yugoslavia, Turkey, Vietnam, and Southeast Asia, in Amsterdam with Turkish women, and in Los Angeles with Mexican and Central American women (see Morokvasic, Waldinger, and Phizacklea, 1990; Hoel, 1982; Bonacich, 1990 and 1991; Sassen, 1988 and 1989; Kwong, 1987; and Waldinger and Bailey, 1986). It would be exceptional to find immigrant women in the status of shop owners or contractors in these manufacturing networks. There is no "ethnic career ladder" for women garment workers; they remain on the bottom rungs of the industry. This has been true throughout the world, not only in the newly industrializing countries and countries moving toward export-industrialization, but also in the United States and Western Europe. The international movements of capital and labor have brought the Third World out of our backyards and onto our patios. The increasing polarization of both production and the labor force that accompanied "deindustrialization" has stimulated an urban informal economy, one that works "off the books," is unregulated, and untaxed. In the form of street venders, unlicensed sweatshops, cheap personal and professional services, etc., the Third World's informal sector - e.g., the lower circuit, the bazaar sector, marginal or petty commodity production - has come to the U.S. A decade of the anti-labor policies of Reaganism and Thatcherism in the United States and Europe has weakened labor as a movement and as a class. Today in the United States, union membership has declined to 16% of the labor force. The breaking down of unions has helped lower the wage threshold for nonprofessional labor in the old industrial countries. One effect is that illegal, anti-union shops, organized with Third World pay and conditions, can operate with audacity in Philadelphia, once one of America's strongest union cities. In a sense, the reemergence of the sweatshop is a test and a measurement of the weakening of labor.

Further, during the Reagan years, the drastic reductions of restrictions on safety and labor violations, regulatory activities, and regulatory staff have accomplished their goal: to reduce the protection of the rights of labor and to increase the freedom of the corporations to make profits. Investigators seeking to monitor unsafe conditions in the garment industry in New York repeatedly complain that staffing shortages prevent even routine inspections. Cutbacks by the federal government in Occupational Safety and Health Administration (OSHA) and the Wage and Hour Division, both departments of the U.S. Department of Labor, render useless efforts to curtail such illegal activities as violation of labor laws, criminal importation of female labor, and even the involvement of the Mafia itself. In New York, a 40% cut in the Labor Department's budget left OSHA with fewer than 200 compliance officers for the entire state. "Routine factory inspections are placed on the bottom of the priority list." For this reason, not one Manhattan garment factory has been visited by an OSHA inspector, despite clear violations of many OSHA regulations (Leichter, 1983: 11). Due to deregulation, 90% of the trucking in the country is not covered by Interstate Commerce Commission jurisdiction. The dearth of government regulation leaves rates and conditions entirely dependent on what the "market" can bear (or what the Mafia can extort). Multimillion dollar corporations are operating with impunity in this clothing jungle without fear of interference. The shift of U.S. apparel firms abroad permitted them to escape federally mandated minimum wages and overtime rates along with legally required payments to social security, unemployment, worker's compensation, as well as costs embedded in health and safety requirements. Ironically, the relocation of many of these same firms to U.S. urban underground manufacturing now allows them to continue dodging these same responsibilities they previously left to avoid.

Finally, we are not speaking of a few T-shirts and sweatpants. This expansion is big business. In Philadelphia, I have been told that garments were being sewn for Sears, Penney's, and Montgomery Ward's. On April 6, 1990, retail sales for March were released for these three companies. For the first two months of 1990, sales for Sears merchandising division were at $5.11 billion; Montgomery Ward's first two months' sales were at $698.2 million. Penney's domestic sales rose for the first two months of the year to $2.23 billion. "Apparel sales helped most large American retailers increase their sales in March...over all, business was good" (New York Times, April 6, 1990: D5). During the following year, Penney's acquired several new brand names to improve further sales: Maidenform, Warner, Dockers, Henry Grethel, Van Heusen, and Haggar, plus a line of private labels (Moody's Handbook of Common Stocks). In 1991, J.C. Penney's net income dropped sharply while apparel sales improved. In Philadelphia, while larger manufacturers are going out of business, many smaller nonunion shops with lower labor costs and the ability to adapt quickly to the market that have cropped up contribute to this trend.


(1.) The data and information for this article were gathered from several sources:

The first were interviews with key informations familiar with several aspects of garment manufacturing, as well as with the industry's reemergence in Philadelphia. They include representatives from the International Ladies Garment Workers Union, The Amalgamated Clothing and Textile Workers Union, the office of State Legislator David Cohen, who has held hearings on the causes and conditions of the growth of garment sweatshops in Philadelphia, extensive interviews with owners of industrial sewing machine shops who sell and service the machinery used both in workshops and by homeworkers, investigators in the New Jersey Commission of Investigation, and persons familiar with investigations being carried out by the Pennsylvania State Crime Commission on illegal industrial homework, illegal importation of women workers, and Mafia connections within the industry.

Second were a set of interviews with leaders of Asian mutual assistance organizations, including the Cambodian Association, the Philadelphia Overseas Chinese Association, the South East Asian Mutual Assistance Coalition, and representatives of the Chinese Christian community. Interviews were also conducted with agencies concerned with Asian welfare, including the Nationalities Service Center, Mutual Assistance Association Project, Philadelphia Urban Coalition, Catholic Social Services, editor of the Philadelphia-based Korean daily, Dong-A News, department directors of the Vocational Education program of the Philadelphia Public Schools, several teachers of English as a Second Language who have taught among the Philadelphia South East Asian refugee community, and a member of the board of a community refugee house.

Third were interviews with Asian women who have worked within the industry and to whom I was introduced by persons from the various organizations listed above. A formal survey of workers in the industry is underway; interviews in this article follow the design of this instrument and included open-ended questions as well. From various sources, I have complied a list of approximately 100 known sweatshop sites.

Finally, documents were reviewed from state, federal, and New York, New Jersey, and Pennsylvania investigative committees concerned with the growth of illegal sweatshops and industrial homework and the operations of organized crime in the industry, and government documents on employment and living conditions among the various Asian nationalities in Philadelphia and other U.S. regions. Also reviewed were trade journals, including Apparel Industry Magazine and Bobbin. (2.) Unevenness of world capitalist development is expressed by a hierarchy of wage levels or disparate thresholds for the remuneration of labor. Variations include not only money remuneration, but also encompass the social wage or social benefits received in addition to actual cash payments. In any given period and location, there exists what can be termed a "normal vital minimum-wage treshold" necessary for the reproduction and maintenance of a labor force, which can be broken down into two components. The first is the physical capacity of labor to work. The second is the moral and historical component, which includes the variable social costs of production - individual and collective expenditures and investment in the education, health, housing, general welfare, and cultural base necessary for the production, maintenance, and reproduction of a work force at a given time and place. It is this element that varies most within the international division of labor, as well as in the stratification of internal labor markets, especially by gender. Ongoing negotiations between capital and labor over the wage threshold are carried out by voluntary associations, political parties with ideological commitments to class, and by organized movements seeking to alter the material conditions of production. At opposite poles, capital and labor each seek to raise or lower the wage threshold to its own advantage.

Characteristic of Third World or low-wage zones is the persistent presence of a large pool of workers who have not been fully integrated into the paid labor force. In this group are women, many of whom have worked as unpaid labor in agriculture or family enterprises. They represent a latent reserve of labor, which functions to depress wages when they are introduced into the paid labor force. During the Development Decades, large numbers of this latent reserve were brought into the social relations of industrial production in multinational or global factories. Taking the garment industry as an example, a main outcome for capital was the greater depression of wages. Or, put another way, by shifting to a low-wage zone, capital was able to reconstitute a new balance between labor and capital in its favor as expressed in decreased wage levels.

As part of the global reorganization of capital we have observed that during the 1980s, the spatial mobility of multinational capital has been toward low-wage zones. Second, within the low-wage zones, introduction of a (female) army of latent wage labor into industrial production has served to depress wages. Given the globalization of the world economy, the effect has been to depress industrial wages also within the developed core or high-wage zones. This serves to weaken industrial labor viz-a-viz capital in its attempt to command higher rewards or remuneration for its labor power. At the same time the anti-labor policies of the state, under the domination of Reaganism and Thatcherism, have served to further weaken labor. The reorganization of capital serves as the context for the multinationals' ability to reconstitute the wages and conditions of a low-wage zone production within a previously high-wage zone or labor market. In garment production, not only the conditions and wages are reconstituted, but the small shop owners and the workers are also being spatially transplanted.

In theoretical terms, then, how do we explain such a phenomenon? First, by the advantage capital has gained over labor through spatial mobility. Second, by the depression of wages caused by the introduction of the latent sector of the (female) army of reserve workers into the global industrial labor market that was achieved through this move. Third, by the subsequent weakening of industrial labor in the U.S. from the lowering of wages globally and by anti-labor policies of the state in the U.S. Finally, by the behavior of corporations, which recognize that they can increase their profits, or accumulation of capital, by reducing inefficient production costs and transportation and shipping expenses through relocation to sites closer to the U.S. market. This they are able to do precisely because of the three factors listed above, which have combined to reduce the ability of labor and labor's representative organizations to resist the return of corporate production in garments under the conditions they now command. (3.) Firm activity abroad consists of three subgroups: manufacturers engaging in the entire production process, from textiles to finished garments to retailing under their brand name; brand-name apparel manufacturers; and major retailers or buying groups such as Macy's or Penney's. The format may involve subcontracting, brand-name licensing, or importation of finished garments. (4.) Items 807 of the U.S. Tariff Code specifies that precut garments may be exported for assembly and that an import duty will be levied only on the value-added costs to the items when they are reimported. Item 807a refers to countries eligible specifically under the Caribbean Basin Initiative: Costa Rica, Dominican Republic, Haiti, Jamaica, and Trinidad. (5.) During the Reagan administration, the battle over the laws proscribing industrial homework resulted in a legal modification that now permits detail work, e.g., belting or pocket trim, to be performed as homework. (6.) There are differences in the cutting process depending on whether computer-aided laser technology is employed. In factories that mass produce standardized clothing such as jeans, cutting is generally done using CAD-CAM (computer aided design-computer aided manufacturing), which employs electronically controlled devices with laser beams that permit precise cutting of many layers of fabric. When combined with computerized graders that automatically measures a given pattern and then grades, drafts, and cut patterns into any desired size or variant, the need for skilled labor in the cutting process is drastically reduced. On the other hand, informations familiar with the bundles received by sewing shops in Philadelphia claim the cutting is still done with shears.


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Author:Petras, Elizabeth McLean
Publication:Social Justice
Date:Mar 22, 1992
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