ABOVE: Shoppers at a Bakersfield
Wal-Mart grab televisions after the store opened at 6 a.m

The Washington-based National
Retail Federation predicts total holiday retail sales, which exclude restaurant
and auto sales, will increase by 4 percent to roughly $209.25 billion.

from The New York Times
for April 24, 2001:

Labor Standards Clash With Global Reality

by LESLIE KAUFMAN and DAVID
GONZALEZ

SAN SALVADOR ˜ Six years ago, Abigail Martínez earned 55 cents an
hour sewing cotton tops
and khaki pants. Back then, she says, workers were made
to spend 18-hour days in
an unventilated factory with undrinkable water.

Employees who displeased
the bosses were denied bathroom breaks or occasionally made

to sweep outside all morning
in the broiling sun.

    Today,
she and other workers have coffee breaks and lunch on an outdoor

terrace cafeteria. Bathrooms
are unlocked, the factory is breezy and clean, and

employees can complain to
a board of independent monitors if they feel abused.

    The changes
are the result of efforts by Gap, the big clothing chain, to

improve working conditions
at this independent factory, one of many that supply

its clothes.

    Yet Ms. Martínez today earns 60 cents an hour, only 5 cents more an hour than six years ago. In some ways, the factory, called Charter, shows what Western companies can do to discourage abuse
by suppliers. But Gap’s experience also demonstrates the limits to good intentions
when first-world appetites collide with third-world
realities.

    Ms. Martínez’s
hours are still long, production quotas are high, and her

earnings are still not enough
to live on. She shares a two- room concrete home with a

sister, two brothers, her
parents and a grandmother.

    Yet the
real alternative in this impoverished nation is no work. And

government officials won’t
raise the minimum wage or even enforce labor laws too rigorously

for fear that employers
would simply move many jobs to another poor country.

    The lesson
from Gap’s experience in El Salvador is that competing

interests among factory
owners, government officials, American managers and middle-class

consumers ˜ all with their
eyes on the lowest possible cost ˜ make it difficult to

achieve even basic standards,
and even harder to maintain them.

    “Some
have suggested that there are simple or magic solutions to ensure

that labor standards are
applied globally,” said Aron Cramer, director of human

rights at Business for Social
Responsibility, a nonprofit advocacy group that receives

support from business. “In
fact, it takes a great deal of work.”

    Fed up
with abusive conditions, Ms. Martínez and a small group of other

workers organized and began
to hold strikes at the factory, then called Mandarin

International, in 1995.
As tension rose, workers took over the factory and shut down

power to the plant. Security
guards forcibly ejected strikers; union members said the

guards dragged women out
by their hair and clubbed them with guns. The

factory’s owners fired hundreds,
including Ms. Martínez.

    It might
have ended that way, except that it occurred just as concern

about sweatshops was rising
in the United States. Groups like the National

Labor Committee, a union-backed,
workers advocacy group based in New York, had formed to

oppose sweatshops. Mandarin
offered a media- ready case of abuse, and the

revolt was widely publicized.

    Still,
two of the four retailers using Mandarin left after the protests

˜ J. C. Penney and Dayton
Hudson (now Target). Eddie Bauer, a unit of Spiegel Inc.,

suspended its contract.
Gap Inc., which is based in San Francisco, intended to quit,

too, but a group of Mandarin
workers pleaded with the company to save their jobs. Some

blamed union organizers
for the trouble. “Problems were made to look worse by the

union,” said one employee,
Lucía Alvarado, who has worked at the factory for eight years.

    Gap executives
chose to stay after deciding that all the groups involved

˜ workers, labor activists
and factory owners ˜ were willing to make changes. The

workers were expected to
stop disrupting the plant, and managers had to agree to more

humane practices and to
accept outside monitors.

    To make
sure the changes stuck and to arbitrate disputes, Gap decided to

try the then innovative
idea of hiring local union, religious and academic leaders as

independent monitors who
would meet regularly with workers to hear complaints,

investigate problems and
look over the books.

    “It’s
not a paradise,” said Carolina Quinteros, co-director of the

Independent Monitoring Group
of El Salvador, as the monitors call themselves. “But

at least it works better
than others down here. They don’t have labor or human rights

violations.”

    The push
for change ranges far beyond the Charter factory, or El

Salvador. Today, activists
on college campuses are calling for an end to sweatshops

everywhere. [As recently
as this past weekend in Quebec, world trade officials debated

how to clean up those operations,
and the United States has pushed developing countries

to raise pay and working
conditions in thousands of plants from Bangladesh to

Brazil.]

    Results,
however, have been negligible. The basic problem is that jobs

and capital can move fast
these days, as the president of El Salvador, Francisco Flores,

is keenly aware. “The difficulty
in this region is that there is labor that is

more competitively priced
than El Salvador,” he said.

    Here,
as in many other countries, labor advocates say the problem is

made worse by the government’s
cozy ties with factory owners. When a Labor Ministry

committee issued a report
critical of forced overtime, poor safety and threats

against labor organizers,
factory owners complained. The government swiftly withdrew

and disowned it.

    Salvadoran
officials and business leaders have also objected to monitors

Gap has hired to police
working conditions. They contend that the group is a tool of

unions that want to keep
jobs from leaving the United States ˜ or a leftist

anti-government front, a
suspicion left over from El Salvador’s long civil war, which ended in

1992.

    Then
there is practicality. Gap spends $10,000 a year for the

independent monitors at
Charter, which is owned by Taiwanese investors, and thousands more for

management time to arbitrate
disputes and for its own company monitors to recheck

the facts on the ground.
For the company to duplicate these intensive efforts at each

of the 4,000 independent
factories it contracts with would have taken about 4.5

percent of its annual profit
of $877 million last year.

    In a
world where costs are measured in pennies, that percentage would be

a significant burden. Wal-Mart
and Kmart are praised by investors for relentlessly

driving down costs, but
they have much less comprehensive monitoring programs.

    Gap says
that expense and staff time are not even its main concerns. The

experiment in El Salvador
has only reinforced the company’s conviction that

companies cannot substitute
for governments indifferent to enforcing laws. Also, it said,

retailers have limited power
over their independent contractors. Either they pull out,

which would punish innocent
workers, or they must accede to a slow process where

they must cajole and bully
for every bit of progress.

    “We are
not the all-powerful Oz that rules over what happens in every

factory,” said Elliot Schrage,
Gap’s senior vice president for global affairs. “Do we

have leverage? Yes. Is it
as great as our critics believe? Not by a long shot.”

Sitting Down: Monitoring
Effort Enlists Outsiders

Still, monitoring is the
sweatshop opponents’ great hope. Watchdog

groups say that only people
outside of the company can win the trust of workers and

evaluate complaints. “That
is where you get problems that won’t show up in paper

records and interviews with
management,” said Sam Brown, executive director of the

Fair Labor Association,
a labor advocacy group in Washington.

    At the
time, however, no one had ever done it, said Mr. Brown, who is a

former Ambassador to the
Organization for Security and Cooperation in Europe

and past director of Action,
federal domestic volunteer agency.

    Gap’s
efforts are still in many ways a blueprint for the international

labor advocacy movement
˜ since 1995 other companies like Liz Claiborne and Reebok have

attempted to start similar
programs. But what has actually happened in

El Salvador is a process
that lasted longer, cost more and achieved less than what many

people had hoped for. “We
knew it would be hard,” Mr. Schrage said. “But it’s been

harder than we ever imagined.”

    The company
has found that no aspect of its efforts escapes local

politics. On the recommendation
of Charles Kernaghan, the director of the National Labor

Council, Gap turned to the
legal aid office of the Archdiocese of San Salvador and to

the Jesuit University here.
Earlier, both institutions had helped uncover abuses in

the plant, which to Gap
demonstrated their experience and independence from management.

But both also had a history
of sympathy for the Farabundo Martí National

Liberation Front, a coalition
of rebel groups and political parties during the civil war.

The coalition is known as
the F.M.L.N., its initials in Spanish.

    “When
companies see me, they see someone to the left of the F.M.L.N.,”

said Benjamín Cuéllar,
the director of the Institute for Human Rights at the

University of Central America
here who is also on the board of independent monitors. That view

manifests itself in mistrust
and resistance by managers, he said.

    Beyond
politics, Gap says it is not easy to impose its will on

contractors simply because
it is a major customer. Pedro Mancía, the factory’s manager,

indicated that he looks
on the monitors as an annoyance, not a threat. In his view, the

only meaningful role they
played was in easing tensions among the workers themselves

after the 1995 strike.

    That
event “was not between management and workers,” Mr. Mancía argued.

“We had two warring factions
of unions and they could not sit down together.”

    Factory
managers agreed to accept monitors mostly to avoid losing Gap

and going out of business.
Still, trust is tenuous and the managers have found ways ˜

subtle and not so subtle
˜ to resist, monitors say.

    It took
about a year to rehire all of the workers fired during the 1995

strike, for example. And
30 of those rehired in 1997 were fired again recently, not

because they were strikers
but because the company said they were not productive

enough. “They are playing
by the rules of the game,” said one member of the monitoring

group. “But I’m not much
in agreement with the rules of the game.”

    Gap says
that this project has taught it the limit of its own influence.

“We can’t be the whole solution,”
Mr. Schrage said. “The solution has to be labor laws

that are adequate, respected
and enforced. One of the problems in El Salvador is

that that was not happening
and is not happening.”

Moving On: Economic Obstacles
Impede Reforms

Before dawn each day, Flor
de María Hernández leaves her three children

in the tent where they have
lived since an earthquake leveled her home earlier this

year and begins her two-hour
commute to the Charter clothing factory.

    She and
the others, like Ms. Martínez, must be at work before 7 a.m.

Managers close the gate
precisely on the hour and dock the pay of anyone who is late.

    Inside,
rows of sewing machines face blackboards on which supervisors

have written the daily quotas
for shirts and trousers, roughly 2,000 a day for each

line of 36 machines. The
pace is relentless, but by local standards it is a

pleasant place to work.
There are lockers, tiled bathrooms, a medical clinic and an outdoor

cafeteria. Large fans and
high ceilings keep temperatures down.

    But Ms.
Martínez remembers just what it took to get this far. She was

among the workers who protested
the abusive conditions in 1995. “Workers would

bring in permission slips
from their doctors to go to the hospital,” she

recalled, “and supervisors
would rip it up in their faces.”

    Of the
70,000 garment workers in El Salvador, 80 percent are women. Few

earn enough to take care
of their families. Ms. Hernández, for example, earns

about $30 a week inspecting
clothes. It is not enough to feed her children; to make

ends meet, she relies on
help from her ex-husband.

    She keeps
her job because the most common alternative is to work as a

live-in maid or a street
vendor. Jobs cutting sugar cane in the searing sun, once

plentiful, are difficult
to find now, and wages have fallen in recent years along with commodity

prices.

    El Salvador,
never a wealthy country, is struggling every bit as hard as

its people. Roughly 75,000
people were killed and thousands wounded in the civil

war. The war also drove
away foreign investment, shuttered relatively high-paying

electronics factories and
left roads, power lines and other basic services in

tatters.

    Earlier
this year, two powerful earthquakes compounded the difficulties

by wrecking hundreds of
thousands of buildings. Economists estimate that 180,000

Salvadorans are jobless.
Almost half of the population lives in poverty.

    The government
has gone out of its way to attract investment and jobs.

Government leaders pin the
country’s future on the optimistic hope of doubling the

number of factories making
clothes for the United States, to more than 400, in

three years.

    “Maquilas
have been a source of significant economic growth in recent

years,” President Flores
said using the Spanish term for the plants that enjoy tax and

trade benefits. “They are
the most dynamic economic sector in the country.”

    That
growth, however, has not been matched by the budget of the Labor

Ministry, which is among
the worst-financed agencies. It employs only 37 labor

inspectors to enforce regulations
˜ 1 for every 10 factories, not including coffee

plantations, construction
sites or other places of business in this country, which

has 6.1 million people.

    The limits
of the government’s willingness to be an advocate for labor

was illustrated last summer
when it suppressed the report critical of factory working

conditions. The labor minister,
Jorge Nieto, said that the report was technically

flawed, and insists that
the government intends to modernize his agency and improve inspector

training. “We want investment,
but only with respect and fairness,” he said. “Only

when workers’ rights are
respected can we generate more contracts with American

companies.”

    But to
get those contracts, El Salvador must compete with neighbors like

Honduras and Nicaragua,
where wages are lower and the population even poorer and

more eager for work. Government
officials and factory managers concede that El

Salvador’s current minimum
wage is not enough to live on ˜ by some estimates it covers less

than half of the basic needs
of a family of four ˜ but they are wary of increasing it.

    “We cannot
be satisfied with the wage, but we have to acknowledge the

economic realities,” Mr.
Nieto said.

    Since
Gap pioneered the independent monitoring effort, few other

American companies have
followed. They cite costs, politics and questionable effectiveness.

Gap executives echo those
worries when they assess the experience at Charter.

    “We are
in a very competitive marketplace,” said Mr. Schrage of Gap.

“Consumers make decisions
on lots of factors, including price. There is no clear benefit

in having invested in independent
monitoring to a consumer and it is not clear if we were

to make it more broad policy
that consumers would get a benefit or care at all.”

    As she
shopped at the Gap flagship store at Herald Square in Manhattan,

Claire Cosslett fingered
an aqua cotton T-shirt made in El Salvador to check

for quality. Ms. Cosslett,
a legal recruiter, said she reads labels and sometimes worries

that her garments are “made
by some child chained to a sewing machine.”

    American
companies dread comments like that. Yet for all their fears,

they ultimately have to
balance their concern over image, and any feelings they have

about third-world workers,
with customers’ attitudes. Then there are the competitive

pressures to keep costs
low. Would the cost of raising working standards in El Salvador

raise the price of a
T-shirt enough to drive off customers?

    Among
several shoppers who were interviewed at the Manhattan store, Ms.

Cosslett was the only
one to say that reports of sweatshop conditions had stopped

her from buying a particular
brand. She said she would be willing to pay more for

a garment made under
better working conditions.

    But
then she paused and hedged. “It would depend how much,” she said.