The Hierarchy of the Garment Industry:

The apparel industry is organized in a hierarchical system in which garment workers make up the very bottom rung, and are at the mercy of every level above them.  At the top of this pyramid of power and profit sit retailers, like Nordstrom or Wal-Mart, who are one step above manufacturers, like Gap or Levi’s. Retailers will often sell their products to costumers marked up twice what they paid the manufacturers. Manufacturers profit greatly as well, by subcontracting the assembly of their clothing to small plants and factories, choosing to hire whichever can provide goods at the lowest cost and with the greatest efficiency.  The subcontractors, who are in constant competition to keep costs as low as possible, directly employ garment workers.  It is within these assembly plants that most abuses and wage violations occur.  One can get a better sense of this hierarchy by looking at the distribution of profits in the sale of a one hundred dollar dress: the costumer pays one hundred dollars to the retailer, who makes $50 dollars profit; the manufacturer gets $35, but profits $12.50 after paying for fabric; the subcontractor earns $9, after paying the workers a total of $6 for all their labor (1, page 2).

The Sale of a $100 Dress

Retailer: $50 in profits Manufacturer: $35 ($22.50 is spent on fabric, $12.50 is profit) Subcontractor: $15 (pays workers $6, making $9 profit) Workers: $6 (1, page 2)

Image taken from http://www.tikimama.com/images/dress.jpg

Ironically, the pyramid of responsibility is quite the opposite of that of power and profits.  Traditionally, contractors were solely responsible for the conditions under which their employees worked.  Manufacturers and retailers had no legal responsibility for regulating the safety, payment, or treatment of the workers who produced their clothing line.  Manufacturers claimed they had no idea what was occurring at their subcontractor’s plants, and it was not their problem anyway.  The ability of manufacturers to completely dodge responsibility appears to be slowly changing as consumers have put increasing pressure on companies, like Nike, known to be involved with sweatshops. Furthermore, some laws have been enacted demanding manufacturers and retailers ensure that garment workers receive their due wages (9).  Nevertheless, manufacturers still hold a great deal of power by effectively setting the prices within the industry. 

For the sake of comparison, Tommy Hilfiger reportedly earns an annual salary of $22.4 million (9). In 2002, the average annual wage of a garment worker in the Bay Area was $14,350 (3, page 7).

Global Capitalism and the Reemergence of Sweatshops

The "reemergence" of sweatshops began in the 1970's, and can be attributed, at least in part, to "new global capitalism." An important factor of global capitalism is its emphasis on world trade and competition. Governments of capitalist nations look for opportunities to increase profits by letting the free market dictate trade, with little regulation. NAFTA, the North American Free Trade Agreement, and the WTO, the World Trade Organization are some of the strategies enacted to stimulate global free trade. In addition, the restructuring of the global economy has involved "cutting government spending on health, housing, education, and nutrition programs; freezing and slashing wages, and suppressing workers' rights to organize; selling publicly owned property and assets to private interests; giving tax incentives and other forms of government "welfare" to corporations and the wealthy; removing government regulations and restrictions or corporations..." (4, page 6). Policies in the United States, since the Reagan administration, have put at great deal of the power into the hands of corporations, leaving the state out of most business dealings, simultaneously decreasing services for the nation's low wage workers.

The "flexibility" of the global capitalism is often praised for encouraging business and trade, but the benefits it provides for corporations have dire consequences for those at the bottom of the garment industry hierarchy. For example, instead of producing mass quantities of similar items in gigantic factories, a more diverse assortment of garments is being made in smaller apparel plants. This means that manufacturers can pick which garment factory it will subcontract work to based on a number of factors, including cost, efficiency, and proximity to the manufacturer. But what does this mean for garment workers? First, it leads to job insecurity, part-time, and seasonal work, as manufacturers pick and chose which plants to hire throughout the year. In addition, it makes unionization more difficult, because garment workers often must transfer from job to job. Furthermore, small factories are less highly regulated by the government, and the competition between U.S. and worldwide suppliers leads to labor violations and pathetic wages. New global capitalism has also caused a large immigration towards more industrialized countries. The apparel industry has seized upon the perfect workforce for exploitation: female immigrants, arriving in America with little proficiency in English and in desperate need of work (1, page 15).