How the Blue Jeans Business Works in the Global Economy
In the last section we took an overview of the workings of the global economy. Here we will look at the micro effects of globalisation and talk about the daily routine of a Chinese sweat shop worker. We will then appreciate the true cost in human terms of those cheap imports. Much of this is taken from the documentary film China Blue. Then we will go on to see how household brand names in the blue jeans sector operate their businesses.
An Individual Case – The Life of a Chinese Worker in the Global Economy
At sixteen years of age, Jasmine was a tad older than many when she left her village to become one of China's’ 110 million internal economic migrants. After two days and two nights train journey she arrived in the city of
The factory owner allowed clandestine filming of China Blue within his factory for two reasons. Firstly he was led to believe that the film was about him as one of the new breed of Chinese entrepreneurs, and secondly he was proud of his factory and considered himself to be very advanced and fair minded towards his employees compared to other factory owners in the area.
The Blue Jeans Business as an Example of the Global Economy in Practice
Are you wearing blue jeans today? Is the brand a household name? If it is then the chances are that they were made in a sweat shop in
The Limited Inc
Price range $59.50 - $98.00
Buys from sweat shops around the world where young girls live in cramped dorms and work up to 70 hours a week.
TLI washed its hands of the whole business by saying “Limited Brands holds its employees, suppliers and vendors strictly accountable for compliance with all applicable laws and our own business policies, including those relating to labour standards”. In 2003 The Limited Inc settled a lawsuit which accused it and other multinational brands of forcing thousands of garment workers in Saipan to work more than 12 hour days, seven days a week, in a “racketeering conspiracy” that required workers to sign contracts waving their rights. By settling The Limited did not admit any wrongdoing.
The Limited owns the following brands: The Limited; Express;
Price range $62.50 – 125.00
Mexican workers reported working in slave labour conditions earning $40 / week for 10 h + days. Workers who tried to unionise were fired. In response, a statement from Tommy Hilfiger said,”I think it is absurd people make clothes in places in the world that are not of US standards”.
When the Tarrant factory in Mexico got itself into a wrangle over unjustly firing workers, Tommy Hilfiger responded by quitting Mexico in a classic cut and run exercise to relocate in other parts of Latin America and Asia where sweat shops abound.
Tommy Hilfiger pays its factory floor workers an hourly rate of between 23 cents and $1.75. CEO Tommy Hilfiger’s hourly wage is $10,769
Price range $79 - $168
“Guess?” ran an estimated 80 sweat shops in
In response to criticisms, the company did not improve conditions but instead ran full page ads in major American newspapers proclaiming “Guaranteed 100% free of sweat shop labour” and it even sewed “Sweatshop Free” labels into its garments.
In 1992 “Guess?” contractors were accused of not paying their employees the minimum wage or overtime. “Guess?” recompensed the workers but was again soon busted for operating illegal sweatshops. In 1996 when workers tried to organise “Guess?” cut and ran to
Levi Strauss & Co
Price range $14.98 - $192.00
In 1992 the Washington Post exposed the company of sidestepping the sweatshop issue altogether by having their jeans made by Chinese prison labour. Ten years later the famous all American brand quit
In 2001 its workers in
Price range $8.00 – 19.94
20% of Wal-Mart’s business is conducted in 48
A Nicaraguan jeans inspector for Wal-Mart inspected 20,000 jeans each week for an hourly wage of 40 cents. Other workers in the
Wal-Mart’s official statement on sweatshops states “Wal-Mart strives to do business only with factories run legally and ethically”. Obviously they are not striving hard enough.
Workers who make Wal-Mart products regularly experience health problems and labour violations. Including overtime without pay and wage rates up to 30% below the countries minimum. Wal-Mart will not terminate its contract with any factory even if it is found to have violated Wal-Mart’s own code of conduct. It is only if that particular company fails inspections three times in a row that the contract will not be renewed. With annual revenue of $250 billion Wal-Mart is the world’s largest corporation making up 2% of
Are There Any Ethical Companies in the Business?
All of the above has probably left you asking just that question. Two of the following three companies are reported to be American, the other is Canadian; they are fully unionised and genuinely sweat shop free. They are not major brands, in fact you may not have heard of them. As one CEO put it “If we give it to the workers then we cannot spend it on advertising.”
Diamond Gusset Jeans
Union Jean Company
Levi Strauss & Co:
The Limited Inc: