Haiti sweatshops: Your taxes at work - pushing wages down

By Julia Lutsky, People's Weekly World,
23 March 1996

No matter where you turn these days, the Walt Disney Company is already there telling you just what you and your children need most: T-shirts, pajamas, plastic sunglasses, all adorned with Mickey Mouse, Pocahantas and other Walt Disney logos.

If you suspect Disney might be making a tidy profit, a recent report confirms this beyond your wildest imagination. Take, for example, the Pocahantas pajamas you see at Wal-Mart for $11.97. They are made by workers at L.V. Miles, an assembly plant in Port-Au-Prince, Haiti. L.V. Miles, under contract to the Walt Disney Company, pays each worker about $3.33 a day.

In one day, then, 20 workers earn $66.60, and together they produce 1,000 pairs of pajamas. That is $11,970 worth of pajamas for $66.60. Less than seven cents per pair goes to pay the workers who produced it. And the remaining $11.90? Disney CEO Michael Eisner was paid $203 million in salary and stock options in 1993.

A recent report, The U.S. in Haiti: How to Get Rich on 11 cents an Hour, says, If a Haitian minimum wage worker worked full-time, six days a week, sewing clothes for Disney, it would take her approximately 1,040 years to earn what Michael Eisner earned on one day in 1993, and notes that although L.V. Miles pays the minimum wage, it further subcontracts work to shops that pay even less.

The report was written by Eric Verhoogen, a labor researcher for the National Labor Committee (NLC), a human rights group funded primarily by labor unions. When he traveled to Haiti in August of last year, Verhoogen visited a sample of the approximately 50 assembly plants operating in the country and found contractors producing everything from Pocahantas pajamas to industrial gloves for U.S. companies like Wal- Mart, JC Penney and K-Mart.

A loophole in the Organization of American States (OAS) embargo had allowed U.S. companies to continue operating after the coup during which President Jean-Bertrand Aristide was ousted in September 1991. It was only under pressure from the NLC and United Nations and OAS sanctions that they were finally forced to shut down in June 1994. They reopened again, however, when Aristide returned the following October.

Alpha Sewing makes safety gloves for Ansell International of Georgia. Hours are from 6 a.m. to 5:30 p.m., Monday through Saturday. An additional nine-and-a-half hours are often required on Sundays.

Last April a worker who refused to come in one Sunday was summarily fired. When he returned to pick up his severance pay the manager called the U.N. police and reported a burglar on the premises. The U.N. police arrived and promptly handcuffed the worker. After protests from the other employees, the police finally let the worker go. The next day management began firing, three at a time, four at a time, all those workers who had protested the arrest.

Alpha Sewing is not alone in requiring Sunday work. During August of last year Verhoogen learned from some workers that they had to work seven Sundays without a break - that means 50 days without a day off, 70 hours a week. The manager, when asked if this might have caused problems for his workers, replied, The problem is mine, because I can't go to the beach. So I have problems with my wife.

Workers are paid on a piece rate. In May 1995, President Aristide raised the legal minimum wage. The new law clearly states that a worker must receive 36 gourdes ($2.40 U.S.) a day. Where the employee works per piece ... the price paid for a unit of production ... must allow the employee who works eight hours to earn at least the minimum salary.

In spite of this, the companies' response was simply to raise production quotas to a level impossible to attain. The quota for sewing waistbands on panties (Hanes division of Sara Lee) before the minimum was raised had been 360 pieces a day. It is now 840 which allows a worker less than one minute to sew two waistbands. Since this is an impossible rate to maintain, a worker may earn half or less than half the minimum wage for a day that may last as long as 11 hours. Verhoogen reports, One experienced worker ... is supposed to sew seams on 204 pairs of Mickey Mouse pajamas in a day, for which she would be paid ... $2.67 a day; in eight hours, however, she [can] only complete 144 ... for which she is paid ... $1.87. This system is referred to as ... 'what you do is what you get.'

Later in the report Verhoogen observes, In 1994, Wal-Mart made a profit of $2.681 billion, Disney made $1.1 billion. The workers who sew the clothes for these companies are, in many cases, making less than $312 a year working full time. Basic respect for the law is not too much to ask.

Today's minimum wage has less buying power than before Aristide's election in December 1990. Since 1980, its real value has declined some 50 percent. It is the lowest in the entire Caribbean area and provides less than 60 percent of the barest needs for a family of five. A more usual wage of $1 a day, or $6 for a standard workweek, provides about one- quarter of these minimum needs.

For U.S. multinational corporations, Aristide's support for an increase in the minimum wage was a good enough reason for overthrowing him. Andrew Postal, president of Judy Bond, a U.S. women's apparel maker with plants in Haiti, said of Aristide, It was not a business-friendly government.

The report says that after Artistide's ouster and while the Haitian military was murdering 3,000 to 5,000 people, Postal went right on producing in Haiti and exporting to the U.S. despite the OAS embargo.

The report connects the rule in Haiti of regimes that have inflicted a reign of terror on the people and the existence of sweatshops that pay starvation wages. Though it is common knowledge that payment of less than the minimum is the rule in the industrial parks, factory owners and contractors alike deny this. They also lie when they claim the factories have fire exits, safety equipment, clean restrooms, well-lit work stations - basic amenities that are the right of every worker, everywhere.

Verhoogen found that abuses and illegal practices are blatant: it would be impossible ... not to notice them. [P]lants are hot, poorly lit, crowded, and cluttered. Workers are subject to verbal abuse on the slightest whim of supervisors who call them obscene names.

The American director of one plant was asked if this pattern of behavior on the part of supervisors created a problem. It did, he said. They empathize with the people too much.

Industrial safety gloves produced by Alpha Sewing are made by workers whose hands are bare in Polyvinyl Chloride (PVC), the chemical used to toughen the gloves. PVC also takes off layers of skin and its dust causes respiratory problems.

Wal-Mart boasts that it is committed to buying as much merchandise made in the United States as possible. One might question the depth of this commitment, however, upon learning that the Little Leaguer garments sold at Wal-Mart are made in Port-Au-Prince but bear labels stating they are made in the United States.

Workers at Classic Apparel say they have been attaching labels marked 'Made in USA' on their 'League Leader' products. The[y] then showed us a nearly identical label attached to a $16.83 Wal-Mart price tag.

Among the criteria for establishing sweatshops in Haiti, companies consider primarily low wages, because you ... find your lowest wage rates naturally where the greatest pool of available labor is, said Charles Kernaghan, executive director of the NLC, in a report entitled, Behind Closed Doors: U.S. Businesses Eye Haiti. Commenting on the lowest wage theory, he says, In other words, you look for third world countries where high unemployment, poverty, malnutrition, misery and desperate need 'naturally' generate low wages. A good example of such favorable conditions would be Haiti, where the wage is ... 30 cents an hour, or Honduras where the wage is 37 cents an hour.

Last year Kernaghan attended the annual Miami Conference on the Caribbean and Latin America with some 2,000 U.S. and Latin American political and business leaders. He found himself rather isolated, he says, when he introduced himself as a human rights worker.

This set a lot of eyebrows fluttering and serious lowered glances shooting back and forth. He found that the companies were quite willing to consider human rights for their workers - within their own framework which specifies strictly voluntary corporate codes of conduct monitored within the private sector by the companies themselves and entirely free of governmental interference. Future trade or tariff agreements must not be contingent on human rights issues.

Kernaghan responds, We need independent third party monitoring by human rights observers. We should ask JC Penney and Walt Disney: what happened to their so-called corporate codes of conduct? And why haven't their codes been translated into Creole and posted in their contractors' factories? Or are their codes of conduct just more public relations?

Although the United States has pressed businesses to invest in Haiti and has given them tax breaks to do so, it has never pressed these enterprises to pay the minimum wage. A sound legal and regulatory environment for business does not include enforcement of workers' basic human rights according to Laurence Crandall, head of the United States Agency for International Development (USAID) mission in Haiti. Crandall is quoted as saying that violations of the minimum wage law were not the responsibility of the agency and that USAID has no position on the wage issue.

It was USAID pressure that kept the legal minimum at $2.40 per day. In Spring 1995, when the legislation was being considered in the Haitian Parliament, President Aristide said a rate of $3 a day would bring it only to the 1991 levels of real wages and that even $5 a day was insufficient for a family of five. Before that, however, at a press conference held the day Aristide returned to Haiti in October 1994, Brian Atwood, administrator of USAID, was asked whether USAID favored an increase in the minimum wage. He replied, I don't think the economy is ready for such measures.

The report says, The United States has allocated more than $596 million in taxpayer dollars in Haiti since September 1994. Of this, $8 million is committed to the program for the Recovery of the Economy in Transition, which provides direct assistance to U.S. and Haitian businesses - sponsoring conferences, guiding tours of U.S. business people, and establishing a network of business contacts. U.S. taxpayers have ... funded five lavish business delegations [so far]. This money flows through USAID which plans to spend some $215 million this year. Just another example of our U.S. tax dollars at work.

U.S. banks are loath to put up the money for working capital loans with which to finance U.S. sweatshops because they feel it is too risky. This seed money must, therefore, come from Haitian banks, and it is lent at high interest rates. To make things easier, the U.S. government's Overseas Private investment Corporation (OPIC) provides loan guarantees through two private U.S. banks in Haiti.

[A]ccording to the Haitian American Chamber of Commerce and industry, 'OPIC is offering up to $64 million for financing working capital and investments for this [maquila assembly] industry.' As of October 1995, 27 companies had sought OPIC funding.

Lest you believe this might include for workers the right to decent working conditions, even the right to form a union, you should know that OPIC does not want to be so overbearing as to shut companies down ... We ask [them] to come into compliance with these statutes.

Kernaghan asks, How does it benefit the people of the U.S. or Canada when U.S. companies pay 30 cents an hour wages, or less, in Haiti? How do you trade with someone who makes 30 cents an hour? We need living wage standards as a condition for world trade. The National Labor Committee will continue its campaign, joining with organizations across the U.S. and Canada, to clean up the industry.

Sweatshops are not unique to Haiti. UNITE, the U.S. garment workers union that provides the biggest support for the NLC, is fighting the sweatshop scourge, as well, in Los Angeles and New York City. Workers in U.S. sweatshops earn a bit more than their Haitian counterparts - 60 cents an hour instead of 30 cents - but they are still starvation wages. The NLC report is motivated by the need for a united struggle against a common enemy to win a living wage for both Haitian and U.S. workers.

For a copy of the National Labor Commission report and information on how you can help to end this exploitation, write to them at 15 Union Square, New York, New York 10003. Phone: (212) 242-0700, Fax: (212) 255-7230.