Who Benefits the Most from Subcontracting?
The Cache Example:
Sub-contracting is a system in which large entities contract out its work to smaller companies or individuals to sweat as much profit out of workers as possible and avoid responsibility for the abuses of these employees. Following is an example of how this works in the garment industry with the Cache garment case.
Apparel manufacturing today is a $10 billion annual business in New York. For instance, multi-national retailer Cache alone rakes in over $100 million in pure profits each year. Like other retailers, Cache in recent years merged with its manufacturer to consolidate at the top, increasing control over design, distribution and production.
Since 2003, the workers’ factory received the majority of work from manufacturer Adrienne Victoria Designs that worked almost exclusively for Cache until 2007, when Cache bought out and merged with Adrienne Victoria Designs. Manufacturers take orders from designers and retailers, and then contract with factories to produce the clothing. Through this process, manufacturers inherently promote sweatshop factories that bid the lowest amount, regardless of whether it is enough to pay workers minimum wage in order to produce it.
Through over 13 years, the workers witnessed the factory would often change names in order to evade responsibility for labor violations, thereby preventing the manufacturer from also being held liable. Nevertheless, Cache routinely sent ‘independent’ monitors to investigate the conditions in the factory. Cache even paid workers in checks for violations they found, yet to this day they still do business with the factory.
Workers were paid less than a dollar to sew blouses and dresses with a retail price tag of about $200. In 2001, the garment manufacturing industry in New York City alone accounted for nearly 100,000 jobs in the fashion industry. Through the years, due to the lack of accountability in the industry, workers are not even able to survive on such low wages. As a result, only 24,000 garment workers remain in the New York City apparel manufacturing industry.
Typically consumers are seen at the top of the pyramid, as if what we buy or don’t buy has the most power. We also think that cheaper labor means cheaper prices for us. But cheaper labor just means greater profit for the manufacturers and retailers. And who are we? Most people buying sweatshop clothing are also working people. While we might not work in garment sweatshops, we still do not have control of our time. Rather than passively boycott as consumers, we must see our power as working people and launch a pro-active campaign to eliminate sweatshops.
 See “Made in Midtown”; http://www.madeinmidtown.org/#modules/summary-group/60-second-summary
 See Cache, Inc. Schedule 10-K annual investors report; http://www.cache.com/cache/control/aboutus-fin-reports
Demand Stronger Joint Employer Laws
Zheng v. Liberty Apparel
Those Who Benefit the Most Should Take Responsibility for Sweatshop Conditions
In 2001, 26 garment workers filed a federal lawsuit to demand that manufacturer Liberty Apparel be responsible for 80+ hour work weeks at $3 an hour wages. The long hours not only hurt workers’ health, but also took a toll on their families. Says Liberty worker Hui Ming Dong, “I worked from about 9 a.m. to 10 p.m. each day. At the time my daughter was 8 years old. The boss considered it a privilege that he allowed me to leave work at 10pm since I had a kid. Most of the other workers usually ended at 11 p.m. or 12 p.m. Because of the long hours, my daughter would have to go to the factory after school. The few times I would take a day off, the boss kept calling and calling to badger me into coming back. I know that Liberty Apparel was aware we were not getting our wages because all of us would speak to the Liberty Apparel representative about it every day they were there. Liberty Apparel should be held accountable for all the things that went on in the factory.”
In 2003 the lawsuit was dismissed by a judge that claimed that Liberty Apparel was not a joint employer if it did not have direct control over the workers. The workers appealed the decision on the basis that Liberty Apparel could have reasonable control and knowledge over work conditions regardless of whether they had direct ownership or control of the factory. They won the appeal, but the case was sent back to the same judge who sat on the case until his death in 2007. Almost 10 years after the lawsuit was filed, the case finally went to trial before a newly appointed judge. The jury reached a decision in favor of the workers, determining Liberty Apparel was a joint employer under the Federal Labor Standards Act and New York State labor law, and was therefore responsible for paying the workers their owed wages. Liberty Apparel appealed the federal court judgment to the U.S. Supreme Court. In June, 2011, the workers won the U.S. Supreme Court decision.
The Liberty Apparel workers’ long-awaited victory has established a legal precedent for other garment manufacturers to be held accountable, as well as encouraged many other subcontracted workers to speak out against sweatshop abuses.
Still, an increasing number of companies are adopting the subcontracting model, and as a result, many workers in food service, healthcare and even clerical industries are employed with no job security, social security, healthcare, workers’ compensation or unemployment insurance. Yet, the companies on top continue to reap record profits. Sub-contracting particularly affects women, many of whom are still the primary caregivers in the family. As they look for jobs with more flexible work hours, many take temporary and part-time contract jobs that pay low wages with no benefits or job security. And, with Obama’s health care bill fining for the failure to provide health insurance only those businesses with 50 or more employees, more businesses will now use subcontracting to avoid having to pay for health insurance.
The Liberty victory energizes our fight against the subcontracting system. It is a disgrace that Liberty Apparel was able to take advantage of weak laws to drag the case out for so many years. As the economy continues to worsen, more and more workers are under attack. We can’t afford to wait. Join the Ain’t I A Woman?! Campaign in demanding stronger manufacturer accountability laws. Let’s join together to put an end to sweatshop conditions in this country.