[Congressional Record Volume 144, Number 10 (Wednesday, February 11, 1998)]
[Extensions of Remarks]
[Pages E125-E127]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        PHILADELPHIA INQUIRER EXPOSES LABOR ABUSES ON U.S. SOIL

                                 ______
                                 

                           HON. GEORGE MILLER

                             of california

                    in the house of representatives

                      Wednesday, February 11, 1998

  Mr. MILLER of California. Mr. Speaker, the following article appeared 
in the February 9, 1998 Philadelphia Inquirer and describes the living 
and working conditions in the U.S. Commonwealth of the Northern Mariana 
Islands (CNMI). This article, ``Your Pricey Clothing is Their Low-Pay'' 
offers additional examples of the alarming conditions under which many 
workers in this U.S. territory toil.
  Every independent reporter who has traveled to the CNMI to 
investigate the working and living conditions of the tens of thousands 
of imported foreign workers there--whose population outnumbers that of 
the U.S. citizens--has reached the same alarming conclusion: U.S. laws 
designed to protect workers on U.S. soil are not being adequately 
applied or enforced. Instead, this part of America has become an 
outpost for foreign investors, the construction, tourism and garment 
industries being the major suppliers of foreign workers. In the CNMI, 
Chinese labor bosses are able to ``run their factories just as they 
would in China--as virtual sweatshops.'' Because this is a U.S. 
territory, $810 million worth of garments manufactured under these 
conditions in 1997 entered the U.S. duty-- and quota-free and allowed 
to bear the ``Made in USA'' label.
  One Chinese woman describes restrictive labor practices that include 
being forbidden from attending church. Another tells of working seven 
days a week and only occasionally getting a half-day off on Sundays. 
Human rights advocates say ``many guest workers endure unpaid work, 
forced overtime, withheld wages and unsafe workplaces.''
  Many foreign workers live in ``squalid shacks without running water, 
sufficient toilets or proper ventilation'' but ``are too deep in debt 
back home to risk getting fired'' by speaking out about unfair 
treatment, poor working conditions, or improper wages. Indeed, many of 
these workers have sold their family's land, their homes, and have 
borrowed the money from loan sharks to pay recruiters who have promised 
them good, high-paying jobs in America. The workers must repay these 
loans or risk harm to themselves and their families.
  As the article attests, the CNMI is hardly a good example of a 
situation we in Congress would want to emulate in our hoe States. 
Rather, it is an example of what can go horribly wrong when a U.S. 
territory government develops an economy based heavily on the 
importation of cheap, alien, indentured workers, who are granted no 
stake in society, and who are denied adequate labor protections by the 
local government.
  Congress can, and should, take action to correct this situation. I 
have introduced legislation, HR 1450--the ``Insular Fair Wage and Human 
Rights Act'' that would place the CNMI immigration system under federal 
law, bringing the CNMI into conformity with every other U.S. territory. 
Further, this legislation will incrementally increase the local minimum 
wage until it reaches the federal level, and provide that garments only 
be allowed to bear the ``Made in USA'' label if all federal laws were 
adhered to in the manufacture of the garment.

             [From the Philadelphia Inquirer, Feb. 8, 1998]

               Your Pricey Clothing is Their Low-Pay Work

                           (By Jennifer Lin)

       Saipan, Northern Mariana Island.-- The rest of America may 
     worry about losing jobs to Asia, but this lush island in the 
     far western Pacific has created an outpost of Asia right on 
     American soil.
       Pacific Rim investors--primarily overseas Chinese and 
     Koreans--have flocked to this U.S. territory, building a 
     profitable world-class garment industry. They hire workers 
     from China. They import fabric, buttons and zippers from 
     China. And in many cases, they run their factories just as 
     they would in China--as virtual sweatshops--ignoring U.S. 
     laws designed to protect workers.
       Even so, the factories can sew ``Made in the U.S.A.'' onto 
     clothing, skirt U.S. duties and quotas, and pay their workers 
     far less than the U.S. minimum wage. Attempts to rescind 
     those privileges have been opposed by several American 
     lawmakers, some of whom have taken trips to Saipan paid for 
     by the island government.

[[Page E126]]

       The coveted ``Made in the U.S.A.'' label is like a seal of 
     approval for clothing-makers, implying that products are 
     untainted by labor abuses the American buying public 
     associates with garments made in Asian sweatshops. But it has 
     lost much of its meaning in Saipan.
       Such companies as J.C. Penney, Ralph Lauren, Tommy Hilfiger 
     and Jones New York have paid factories here to make their 
     clothing under contract. The suppliers pay less than U.S. 
     minimum wage and ship duty-free to the U.S.--giving them a 
     decided advantage over competitors who make garments in the 
     U.S.
       Often it is impossible for American shoppers to know 
     whether a ``Made In U.S.A.'' shirt was sewn by workers in 
     Philadelphia or by low-wage Chinese in Saipan. (Sensing 
     problems, some U.S. companies have asked their Saipan 
     suppliers to switch to labels that say ``Made in the Northern 
     Marianas'' or ``Made in Saipan.'')
       Last year, garmet factories on the islands shipped a 
     projected $810 million in clothing to the U.S. mainland. Had 
     the merchandise been treated like imports from Asia, the U.S. 
     Treasury could have collected $150 million in duties.
       Most workers in Saipan's garment industry are Chinese, and 
     21 of the 26 factories are owned by Asian investors. China's 
     giant, government-controlled textile industry has set up shop 
     here as a way of avoiding strict U.S. quotas. Marianas 
     Garment Manufacturing Inc., indirectly owned by the Chinese 
     textile industry, hires all 500 of its workers in China and 
     flies them here to sew ``Made in Saipan, U.S.A.'' onto its 
     clothing.
       There is no other place in the United States or its 
     territories like the Commonwealth of the Northern Mariana 
     Islands, a chain of 14 scenic islands, including the largest, 
     Saipan, where more than 5,000 American troops died in a World 
     War II battle.
       It is the only place on U.S. soil where the local 
     government can set its own rules on minimum wage, and one of 
     two with its own immigration policy (along with American 
     Samoa).
       It is the only place where factories import entire 
     workforces and can pay them $3.05 an hour, well below the 
     minimum wage of $5.15 an hour in the United States and the $8 
     an hour earned by the typical American garment worker.
       And it is the only place where foreign workers outnumber 
     citizens--about 35,000 ``guest workers'' to 27,000 U.S. 
     citizens.
       The Northern Mariana Islands offer just one example of how 
     intense global competition combines with an ample supply of 
     desperately poor laborers to perpetuate sweatshop conditions. 
     Garment manufacturers hopscotch the globe in search of cheap 
     labor, cutting deals with local contractors who promise ever 
     cheaper and more pliant workers. When wages rise or workers 
     become restive, manufacturers spread some of their work to 
     the next cheap site, from Taiwan and South Korea in the 1980s 
     to Mexico and Honduras today.
       Often, the result is substandard working conditions and 
     subsistence wages, despite campaigns by labor and human-
     rights groups that have improved the lives of many garment 
     workers. The persistence of sweatshops preserves the low 
     prices and wide selection Americans enjoy for imported 
     garments. But sweatshops also make American-made garments 
     less competitive while swelling American's massive trade 
     deficit with the rest of the world--led by China.
       What makes the Northern Mariana Islands unique is that 
     manufacturers here rely not on local workers (who are U.S. 
     citizens) but on imported workforces of impoverished laborers 
     eager to toil for low wages, often under sweatshop 
     conditions.
       The islands' garment wages are far higher than the 20 to 50 
     cents per hour paid in the world's lowest-paying countries. 
     But the exemptions from U.S. standards--and the direct 
     pipeline to the U.S. retail market--more than compensate. The 
     transplanted Asian garment industry here is growing at a rate 
     of 45 percent a year, according to the U.S. Commerce 
     Department.
       In an effort to promote economic growth, the exemptions 
     were negotiated by island leaders and approved by Congress in 
     1976, a year after islanders voted for U.S. commonwealth 
     status. (The United States seized control of the islands from 
     Japan after World War II.)
       Island leaders argued that the territory in 1976 was too 
     underdeveloped to afford the federal minimum wage. Islanders 
     also were intent on controlling immigration. With a 
     population in 1976 of only 14,000, the islands feared being 
     overrun by Asians trying to migrate to the United States but 
     getting no farther than Saipan.
       (American Samoa has a small number of Chinese workers, but 
     most of its ``guest workers'' come from neighboring Western 
     Samoa and Tonga.)
       Island leaders say they need the exemptions to protect 
     their economy. Employers contend that locals do not want the 
     backbreaking, low-wage sewing or construction jobs that go to 
     outsiders.
       Foreign laborers are so hungry for work that they pay 
     thousands of borrowed dollars to middlemen to get them jobs. 
     Once here, many live like indentured servants.
       Coming from China, the Philippines, Bangladesh and Sri 
     Lanka, they sew clothing, build factories, clean houses, cook 
     meals, wait on tourists, work as hostesses in karaoke bars, 
     pave roads and guard hotels. Critics--including President 
     Clinton--charge that the Northern Mariana Islands are 
     flouting basic American values. Clinton has chastised the 
     island government for importing destitute Asians despite an 
     unemployment rate of 14 percent among natives on the islands, 
     where 30 percent of all citizens live below the poverty line. 
     In a letter last May, the President called labor practices on 
     the islands `inconsistent with our country's values.''
       On Jan. 14, a bipartisan U.S. congressional commission 
     noted that ``only a few countries, and no democratic society, 
     have immigration policies'' as open to abuse as Saipan's. The 
     commission recommended extending U.S. labor and immigration 
     laws to the islands--reforms also proposed by the Reagan and 
     Bush administrations.
       Pending in Congress are bills that would gradually raise 
     the islands' minimum wage to the federal level, impose 
     federal guidelines for immigration, and restrict the use of 
     the ``Made in the U.S.A.'' label.
       The Marianas government has hosted a steady stream of 
     congressional visitors, at an estimated cost of more than 
     $500,000. The Roll Call newspaper reported that in the last 
     year, seven lawmakers, 75 aides, five spouses and one child--
     House Majority Whip Tom DeLay (R., Texas) took his 
     daughter)--have traveled to Saipan, at a cost of about $5,000 
     a person. Typically, the visitors stay in beachfront hotels, 
     tour new factories, and visit golf courses and coral reefs.
       ``Everybody cries `junket,' '' said Tony Rudy, DeLay's 
     press secretary. ``. . . The fact is that our schedule was 
     filled with meetings from top to bottom.''
       Rudy said DeLay toured factories and spoke with workers, 
     who told him they earned more in Saipan than they could in 
     their native countries.
       ``If you bump that up to $5 or whatever an hour,'' Rudy 
     said, companies will ``just take the next plane over to the 
     Philippines, where they can pay $1 an hour.''
       In a letter to officials in Saipan in June, DeLay and House 
     Majority Leader Dick Armey (R., Texas) said any legislation 
     that would harm the islands' economy runs counter to the 
     ``principles of the Republican Party.'' Adam Turner, a 
     spokesman for Juan N. Babauta, the Marianas' representative 
     in Washington, said only ``a handful'' of Saipan's factories 
     could be considered substandard.
       ``Hopefully,'' he said, ``the local government will do a 
     better job cleaning it up.''
       In fact, most of the islands' impoverished garment workers 
     are grateful to earn $3 an hour. But they work on U.S. soil, 
     and it is indisputable that conditions in many plants here 
     would not pass muster in America.
       Eric Gregoire, who until November was a human-rights 
     monitor for the Catholic Church, said some workers are 
     forbidden by their Asian bosses to come and go as they please 
     or to live as freely as people in the United States.
       ``We're all for economic prosperity, but you have to look 
     at the other side of the ledger,'' said Allen Staymen, head 
     of the office dealing with U.S. territories for the U.S. 
     Department of Interior. ``Slavery also was a very prosperous 
     economic system. Prosperity in itself doesn't justify 
     behavior that is not acceptable in the United States.''
       In just 15 years, Saipan has built a flourishing garment 
     industry from almost nothing. Its factories employ about as 
     many people as does Philadelphia's beleaguered apparel-and-
     textile trade, which has lost thousands of jobs to overseas 
     competitors.
       ``It's an absolute insult to American workers and American 
     taxpayers that you would be able to make these products using 
     harshly exploited individuals and foreign workers and then 
     get all the benefits of using the `Made in the U.S.A.' 
     label,'' said Rep. George Miller (D., Calif.), who is pushing 
     to take away most of the islands' privileges.
       Spokesmen for several U.S. companies said their monitors 
     have found no evidence of substandard conditions in island 
     plants that sew their garments. ``We do monitor those 
     factories where we do sourcing in the Marianas, and to date 
     have had very satisfactory results,'' said Wes Card, chief 
     financial officer of Jones Apparel Group Inc. of Bristol, 
     which retails the Jones New York label.
       One of biggest island factories is Marianas Garment 
     Manufacturing Inc.--indirectly owned by the China National 
     Textiles Import & Export Corp. (Chinatex), a behemoth that 
     handles $1.2 billion in Chinese textile exports to the world, 
     much of it to the United States.
       Robert O'Connor, a Saipan-based attorney for the company, 
     denied that the factory, known locally as MGM, is tied to the 
     Chinese state-run textile industry.
       ``The name Chinatex has never had anything to do with this 
     corporation,'' O'Connor said.
       In fact, all of the individuals listed as directors and 
     officers of the Saipan factory are executives with the Osaka, 
     Japan, branch office of Chinatex.
       Wu Yong, president of the MGM factory, said in a telephone 
     interview from Osaka that Chinatex opened the factory because 
     shipments from Saipan are not controlled by U.S. quotas on 
     textile imports. The United States sets comprehensive limits 
     on shipments of clothing coming from other countries in order 
     to protect U.S. textile jobs. The factory uses labels that 
     say ``Made in Saipan, U.S.A.'' and ``Made in the U.S.A.''
       MGM is one of several garment factories charged in recent 
     years with violations of federal labor laws. In 1992, the 
     island government accused the Chinese factory of keeping two 
     sets of books and paying sweatshop wages--half of the 
     territory's minimum

[[Page E127]]

     wage, which was $2.15 an hour at the time. In September, the 
     company settled the charges by paying $1 million in back 
     wages.
       ``That happened five years ago,'' Wu said through an 
     interpreter. ``It's not happening anymore.''
       Far from Saipan's luxury hotels are what the U.S. Interior 
     Department calls ``labor camps,'' home to 20,000 Asian 
     workers. The fortunate ones get dormitories with bunk beds 
     and communal bathrooms. Others find themselves consigned to 
     squalid shacks without running water, sufficient toilets or 
     proper ventilation.
       Young Chinese women spend their days hunched over sewing 
     machines under fluorescent lights. The hours are long and the 
     conditions sometimes harsh, but few complain. They are too 
     deep in debt back home to risk getting fired.
       Some Chinese men said they paid $7,000 apiece for 
     construction jobs, while Chinese seamstresses are charged 
     from $3,000 to $4,000 each for passage here--often as much as 
     they will earn in a year after paying taxes and fees for room 
     and board. The money goes to Chinese government middlemen, 
     who secure passports and arrange jobs.
       Once here, guest workers are vulnerable to exploitation. 
     Human-rights advocates say many guest workers endure unpaid 
     work, forced overtime, withheld wages and unsafe workplaces.
       A seamstress from southern China said she is forced to work 
     seven days a week at Micronesian Garment Manufacturing Inc., 
     one of the largest factories, with nearly 300 workers. 
     Occasionally, she said, she can take a half-day off on Sunday 
     to wash her clothes or write letters. Several workers said 
     the garment factory, controlled by Hong Kong and mainland 
     Chinese investors, would not grant overtime unless the women 
     met their daily quotas. Typically, if a worker falls behind, 
     she must reach her quota on her own time just to qualify for 
     time-and-a-half overtime pay.
       Steve Yim, a Hong Kong-based management consultant for 
     Micronesian Garment Manufacturing Inc., confirmed that 
     workers must meet their quotas before they can earn overtime 
     but denied that women work for no pay in order to fill their 
     daily quotas.
       ``I'm not aware of it,'' Yim said, adding that no one was 
     forced to work overtime, ``but if they are willing to work 
     seven days, we don't prohibit them. We can't stop them.''
       Guests workers are reluctant to speak out, because they 
     know their employers can send them packing with one day's 
     notice.
       ``It's not a job market where if they don't like it, they 
     can leave,'' said Gregoire, the human rights worker. ``You're 
     going to sit there and endure whatever you have to endure.'' 
     Most workers from China are required to sign contracts with 
     the Chinese government, vowing to obey the laws of the United 
     States, Northern Mariana Islands--and China.
       A two-year contract for one Chinese carpenter forbids him 
     from engaging in ``any political or religious activity.'' He 
     cannot take drugs, watch ``sex movies,'' fight, get drunk or 
     ``fall in love or get married.'' Some garment-industry 
     executives say conditions are improving as manufacturers 
     become more attuned to American labor practices.
       Eloy Inos, an executive with Tan Holdings Corp., the 
     largest garment-maker on Saipan, said the garment factories 
     help create ancillary work in shipping, insurance and other 
     support services. He said some problems had been caused by 
     Asian manufacturers' unfamiliarity with U.S. labor standards.
       ``They've since learned and have changed a lot, although at 
     times the changes were painful,'' Inos said.
       But restrictive labor practices persist in many garment 
     factories here, despite limited reforms and continued 
     pressure by human-rights groups. Recently, Chinese women were 
     forbidden by their employer from attending a Christian 
     church. The church's Korean pastor had to remind the South 
     Korean factory manager that people in the United States are 
     free to practice religion.
       At another South Korean garment company--formerly S.R. 
     Corp., now Coral Fashion Inc.--workers were told that they 
     could leave their barracks only twice a week for one hour. 
     Violators ``will be barred from going out the barracks 
     indefinitely,'' the company wrote in a notice posted on Feb. 
     6, 1997. The factory has since been warned by local officials 
     that it is against the law in the United States to lock up 
     one's workers.

     

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