[Congressional Record (Bound Edition), Volume 156 (2010), Part 10]
[Extensions of Remarks]
[Pages 14001-14002]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           BEYOND SWEATSHOPS

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                           HON. GEORGE MILLER

                             of california

                    in the house of representatives

                         Monday, July 26, 2010

  Mr. GEORGE MILLER of California. Madam Speaker, I rise to commend to 
my colleagues the following article on one company's attempts to do the 
right thing--inspired by the consumer choices made by thousands of 
students across the United States who say that there should be ``No 
Sweat'' in their sweatshirts.
  For years I have fought against the use of sweatshop labor, exploited 
adult labor and exploited child labor, around the world. For many years 
now, the student movement in the United States has played an important 
role in helping to bring the issue of sweatshop labor to the attention 
of political leaders, corporate boardrooms, and the college and 
university community. I applaud them.
  Now, one company is trying to do the right thing by making apparel 
without sweatshop labor. That is good for workers and good for our 
consumers. I applaud Knights Apparel and urge other companies to follow 
their example.
  I am especially pleased by this development because of the history of 
the Alta Gracia factory in the Dominican Republic where Knights Apparel 
is producing its goods. This same factory was unceremoniously shut down 
in 2007, leaving over 1,000 employees out of work and in dire economic 
straits--many of them forced to sign agreements that they didn't 
understand waiving their right to receive adequate severance pay. As 
this new factory moves forward, it can become a shining example of a 
new trade model that works by ensuring that all workers are able to 
take advantage of broader prosperity, rather than by starting a race to 
the bottom that leaves only a select few better off.
  The world looks to the United States to set standards for human 
rights, labor rights, and democracy. By making products with a decent 
wage and union rights, this company is setting the finest example of 
corporate responsibility for the world to see.
  The article follows:

                [From the New York Times, July 16, 2010]

           Factory Defies Sweatshop Label, but Can It Thrive?

                         (By Steven Greenhouse)

       Villa Altagracia, Dominican Republic--Sitting in her tiny 
     living room here, Santa Castillo beams about the new house 
     that she and her husband are building directly behind the 
     wooden shack where they now live.
       The new home will be four times bigger, with two bedrooms 
     and an indoor bathroom; the couple and their three children 
     now share a windowless bedroom and rely on an outhouse two 
     doors away.
       Ms. Castillo had long dreamed of a bigger, sturdier house, 
     but three months ago something happened that finally made it 
     possible: she landed a job at one of the world's most unusual 
     garment factories. Industry experts say it is a pioneer in 
     the developing world because it pays a ``living wage''--in 
     this case, three times the average pay of the country's 
     apparel workers--and allows workers to join a union without a 
     fight.``We never had the opportunity to make wages like this 
     before,'' says Ms. Castillo, a soft-spoken woman who earns 
     $500 a month. ``I feel blessed.''
       The factory is a high-minded experiment, a response to 
     appeals from myriad university officials and student 
     activists that the garment industry stop using poverty-wage 
     sweatshops. It has 120 employees and is owned by Knights 
     Apparel, a privately held company based in Spartanburg, S.C., 
     that is the leading supplier of college-logo apparel to 
     American universities, according to the Collegiate Licensing 
     Company.
       For Knights, the factory is a risky proposition, even 
     though it already has orders to make T-shirts and sweatshirts 
     for bookstores at 400 American universities. The question is 
     whether students, alumni and sports fans will be willing to 
     pay $18 for the factory's T-shirts--the same as premium 
     brands like Nike and Adidas--to sustain the plant and its 
     generous wages.
       Joseph Bozich, the C.E.O. of Knights, is optimistic. 
     ``We're hoping to prove that doing good can be good business, 
     that they're not mutually exclusive,'' he says.
       Not everyone is so confident. ``It's a noble effort, but it 
     is an experiment,'' says Andrew Jassin, an industry 
     consultant who says ``fair labor'' garments face a limited 
     market unless deft promotion can snare consumers' attention--
     and conscience. ``There are consumers who really care and 
     will buy this apparel at a premium price,'' he says, ``and 
     then there are those who say they care, but then just want 
     value.''
       Mr. Bozich says the plant's T-shirts and sweats should 
     command a premium because the company uses high-quality 
     fabric, design and printing.
       In the factory's previous incarnation, a Korean-owned 
     company, BJ&B, made baseball caps for Nike and Reebok before 
     shutting it in 2007 and moving the operation to lower-wage 
     countries. Today, the reborn factory is producing under a new 
     label, Alta Gracia, named after this poverty-ridden town as 
     well as the Virgin of Altagracia, revered as protector of the 
     Dominicans. (Alta gracia translates to ``exalted grace.'')
       ``This sometimes seems too good to be true,'' says Jim 
     Wilkerson, Duke University's director of licensing and a 
     leader of American universities' fair-labor movement.
       He said a few other apparel companies have tried to improve 
     working conditions, like School House, which was founded by a 
     25-year-old Duke graduate and uses a factory in Sri Lanka. 
     Worker advocates applaud these

[[Page 14002]]

     efforts, but many say Alta Gracia has gone further than 
     others by embracing higher wages and unionization. A living 
     wage is generally defined as the amount of money needed to 
     adequately feed and shelter a family.
       ``What really counts is not what happens with this factory 
     over the next six months,'' Mr. Wilkerson says. ``It's what 
     happens six years or 10 years from now. We want badly for 
     this to live on.''
       Santa Castillo agrees. She and many co-workers toiled at 
     other factories for the minimum wage, currently $147 a month 
     in this country's free-trade zones, where most apparel 
     factories are located. That amount, worker after worker 
     lamented in interviews for this article, falls woefully short 
     of supporting a family.
       The Alta Gracia factory has pledged to pay employees nearly 
     three and a half times the prevailing minimum wage, based on 
     a study done by a workers' rights group that calculated the 
     living costs for a family of four in the Dominican Republic.
       While some critics view the living wage as do-gooder mumbo-
     jumbo, Ms. Castillo views it as a godsend. In her years 
     earning the minimum wage, she said she felt stuck on a 
     treadmill--never able to advance, often borrowing to buy 
     necessities.
       ``A lot of times there was only enough for my kids, and I'd 
     go to bed hungry,'' she says. ``But now I have money to buy 
     meat, oatmeal and milk.''
       With higher wages, she says, her family can move up in the 
     world. She is now able to borrow $1,000 to begin building her 
     future home and feels able to fulfill her dreams of becoming 
     a minister at her local evangelical church.
       ``I hope God will continue to bless the people who brought 
     this factory to our community,'' she says.
       In many ways, the factory owes its existence to an incident 
     a decade ago, when Joe Bozich was attending his son's high 
     school basketball game. His vision suddenly became blurred, 
     and he could hardly make out his son on the court. A day 
     later, he couldn't read.
       A doctor told him the only thing that would cause his 
     vision to deteriorate so rapidly was a brain tumor.
       So he went in for an M.R.I. ``My doctor said, `The good 
     news is you don't have a brain tumor, but the bad news is you 
     have multiple sclerosis,''' he says.
       For three days, he couldn't see. He worried that he would 
     be relegated to a wheelchair and ventilator and wouldn't be 
     able to support his family. At the same time, a close friend 
     and his brother died, and then one of his children began 
     suffering from anxiety.
       ``I thought of people who were going through the same thing 
     as my child and me,'' Mr. Bozich recalls. ``Fortunately, we 
     had the resources for medical help, and I thought of all the 
     families that didn't.''
       ``I started thinking that I wanted to do something more 
     important with my business than worry just about winning 
     market share,'' he adds. ``That seemed kind of empty after 
     what I've been through. I wanted to find a way to use my 
     business to impact people that it touched on a daily basis.''
       He regained his full vision after three weeks and says he 
     hasn't suffered any further attacks. Shortly after Mr. Bozich 
     recovered, Knights Apparel set up a charity, weKAre, that 
     supports a home for orphans and abused children. But he says 
     he wanted to do more.
       A national collegiate bodybuilding champion at Vanderbilt, 
     Mr. Bozich was hired by Gold's Gym after graduation and later 
     founded a unit in the company that sold Gold's apparel to 
     outside retailers. Building on that experience, Mr. Bozich 
     started Knights Apparel in 2000.
       Still solidly built at 47, he has made apparel deals with 
     scores of universities, enabling Knights to surpass Nike as 
     the No. 1 college supplier. Under Mr. Bozich, Knights 
     cooperates closely with the Worker Rights Consortium, a group 
     of 186 universities that press factories making college-logo 
     apparel to treat workers fairly.
       Scott Nova, the consortium's executive director, says Mr. 
     Bozich seems far more committed than most other apparel 
     executives to stamping out abuses--like failure to pay for 
     overtime work. Knights contracts with 30 factories worldwide. 
     At a meeting that the two men had in 2005 to address problems 
     at a Philippines factory, Mr. Bozich floated the idea of 
     opening a model factory.
       Mr. Nova loved the idea. He was frustrated that most 
     apparel factories worldwide still paid the minimum wage or 
     only a fraction above--rarely enough to lift families out of 
     poverty. (Minimum wages are 15 cents an hour in Bangladesh 
     and around 85 cents in the Dominican Republic and many cities 
     in China--the Alta Gracia factory pays $2.83 an hour.)
       Mr. Bozich first considered opening a factory in Haiti, but 
     was dissuaded by the country's poor infrastructure. Mr. Nova 
     urged him to consider this depressed community, hoping that 
     he would employ some of the 1,200 people thrown out of work 
     when the Korean-owned cap factory closed.
       Mr. Bozich turned to a longtime industry executive, Donnie 
     Hodge, a former executive with J.P. Stevens, Milliken and 
     Gerber Childrenswear. Overseeing a $500,000 renovation of the 
     factory, Mr. Hodge, now president of Knights, called for 
     bright lighting, five sewing lines and pricey ergonomic 
     chairs, which many seamstresses thought were for the 
     managers.
       ``We could have given the community a check for $25,000 or 
     $50,000 a year and felt good about that,'' Mr. Hodge said. 
     ``But we wanted to make this a sustainable thing.''
       The factory's biggest hurdle is self-imposed: how to 
     compete with other apparel makers when its wages are so much 
     higher.
       Mr. Bozich says the factory's cost will be $4.80 a T-shirt, 
     80 cents or 20 percent more than if it paid minimum wage. 
     Knights will absorb a lower-than-usual profit margin, he 
     said, without asking retailers to pay more at wholesale.
       ``Obviously we'll have a higher cost,'' Mr. Bozich said. 
     ``But we're pricing the product such that we're not asking 
     the retailer or the consumer to sacrifice in order to support 
     it.''
       Knights plans to sell the T's for $8 wholesale, with most 
     retailers marking them up to $18.
       ``We think it's priced right and has a tremendous message, 
     and it's going to be marketed like crazy,'' says Joel 
     Friedman, vice president of general merchandise at Barnes & 
     Noble College Booksellers. He says Barnes & Noble will at 
     first have smaller-than-usual profit margins on the garments 
     because it will spend heavily to promote them, through a Web 
     campaign, large signs in its stores and other methods.
       It helps to have many universities backing the project. 
     Duke alone placed a $250,000 order and will run full-page ads 
     in the campus newspaper, put postcards in student mailboxes 
     and hang promotional signs on light poles. Barnes & Noble 
     plans to have Alta Gracia's T's and sweats at bookstores on 
     180 campuses by September and at 350 this winter, while 
     Follett, the other giant college bookstore operator, plans to 
     sell the T's on 85 campuses this fall.
       Still, this new, unknown brand could face problems being 
     sold alongside Nike and Adidas gear. ``They have to brand 
     this well--simply, clearly and elegantly--so college students 
     can understand it very fast,'' says Kellie A. McElhaney, a 
     professor of corporate social responsibility at the 
     University of California, Berkeley. ``A lot of college 
     students would much rather pay for a brand that shows workers 
     are treated well.''
       Nike and Adidas officials said their companies have sought 
     to improve workers' welfare through increased wages and by 
     belonging to the Fair Labor Association, a monitoring group 
     that seeks to end sweatshop conditions. A Nike spokesman said 
     his company would ``watch with interest'' the Knights 
     initiative.
       To promote its gear, Knights is preparing a video to be 
     shown at bookstores and a Web documentary, both highlighting 
     the improvements in workers' lives. The T-shirts will have 
     hanging tags with pictures of Alta Gracia employees and the 
     message ``Your purchase will change our lives.'' The tags 
     will also contain an endorsement from the Worker Rights 
     Consortium, which has never before backed a brand.
       In a highly unusual move, United Students Against 
     Sweatshops, a nationwide college group that often lambastes 
     apparel factories, plans to distribute fliers at college 
     bookstores urging freshmen to buy the Alta Gracia shirts.
       ``We're going to do everything we can to promote this,'' 
     says Casey Sweeney, a leader of the group at Cornell. ``It's 
     incredible that I can wear a Cornell hoodie knowing the 
     workers who made it are being paid well and being 
     respected.''
       One such worker is Maritza Vargas. When BJ&B ran the 
     factory, she was a stand-up-for-your-rights firebrand 
     fighting for 20 union supporters who had been fired.
       Student groups and the Worker Rights Consortium pressed 
     Nike and other companies that used the factory to push BJ&B 
     to recognize the union and rehire the fired workers. BJ&B 
     relented. Today, Ms. Vargas is president of the union at the 
     new plant and sings a very different tune. In interviews, she 
     and other union leaders praised the Alta Gracia factory and 
     said they would do their utmost to make it succeed and grow. 
     Mireya Perez said the living wage would enable her to send 
     her 16-year-old daughter to college, while Yolando Simon said 
     she was able to pay off a $300 debt to a grocer.
       At other factories, workers said, managers sometimes yelled 
     or slapped them. Several said they were not allowed to go 
     home when sick, and sometimes had to work past midnight after 
     beginning at 7:30 a.m.
       Comparing this factory with other ones, Ms. Vargas said, 
     ``The difference is heaven and earth.''

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