Existence of Sweatshops in America

Essay 2018 6 Pages

Business economics - Business Ethics, Corporate Ethics


Table of contents:


Existence of Sweatshops

Nature of Sweatshops

U.S. Companies Linked to Sweatshops

Sweatshops and Labor Laws Violation

Protecting American Workers


Works Cited


Sweatshops are regarded to as low-wage industries, which are concerned with cloth production and flower processing and, they are found in the principal cities. These industries are usually characterized by workforce exploitation, unsafe working conditions and arbitrary discipline. In addition, sweatshops restrict their workers membership to labor unions. In regard to the United States Department of labor, sweatshops are those garment factories, which violate two or more labor laws (Fashion Crimes par.1).

In general, sweatshops are widespread in the world, especially in highly industrialized countries, which require intensive labor in production. However, it is worth noting that they are also found in some developing countries. Globally, most sweatshops are found in China, Latin America and Asia (STEP par. 2). In the United States, sweatshops have been identified to be scattered in some of the largest cities such as Chicago, New York and Los Angeles (Lendman par. 1).

Historically, sweatshops are believed to have emerged during the Industrial Revolution, in which middlemen introduced a subcontracting system to earn profit through exploiting workers. There was a characteristic margin between the total amount of the contract and the net amount paid to workers. In this system, workers worked under unsanitary conditions for excessive hours and yet they received low wages: thus, the characteristic marginal returns were said to be ‘sweated’ (Fashion Crimes par. 1).

Recently, the issue of sweatshops, in the U.S emerged in 1995 when labor officials discovered slave-sweatshops in Los Angeles and Honduras, in which immigrants and young girls were forced to work for excessive hours, under unsanitary conditions. Consequently, Wal-Mart, Gap and Nike clothing industries were charged for using sweatshop labor. These incidences exposed the exploitation of workers, in the sweatshops leading an unprecedented outcry from the public. Therefore, this research will give a comprehensive overview of the sweatshops issue.

Existence of Sweatshops

Currently, sweatshops are on the increase in most cities, in the United States. Recent reports released by the U.S Department of labor indicated that an estimated 50 percent of garment factories in Los Angeles and New York violated labor laws to a substantial existent. These factories were found to offer extremely low wages to their employees. In addition, workers were found to work for overtime without compensation whereas health safety to workers in the sweatshops was highly compromised by the lack of efficient ventilation and unsafe sanitary amenities (ILRF par. 1).

In most cases, sweatshops are usually located in places where there are lowest labor wages because; sweatshops are low-cost factories; thus, their principal objective is to minimize costs. In addition, sweatshops are located in areas where human rights protection is low or totally absent as it is the case in some parts of Latin America.

It is believed that the unprecedented increase of sweatshops, in the United States is attributable to the nature of these production entities. In sweatshops, there is no corporate responsibility because; retailers are covered under the subcontracting chain. In the subcontracting system, manufacturers hire contractors who place orders to assemble clothing (Fashion Crimes par. 2). On the other hand, the contractors are responsible of recruiting workers to assemble and package clothing for sale at low cost environments.

Another principal reason as to why sweatshops are on the increase is because; there exists free trade in the garment industry. The United States has entered into free trade agreements with most developing countries, which ensure there are no trade barriers through trade tariffs and custom duties. As a result, the U.S has an increased market access, especially in the developing countries, which provide a ready market to the U.S assembled garments. It is believed that the free trade system puts profit before the workers, leading to low environmental concerns and workers protection (Fashion Crimes par. 3).

Nature of Sweatshops

It seems that garment factories are not the only production entities involved in sweatshops, although they account for the highest percentage of sweatshops owing to the favorable business conditions of the contracting system. This can be explained by the recent court cases involving garment, groceries and the staffing agencies. In 2009, some gourmet grocery chains such as the Amish Markets, in New York were found to be exploiting their workers, whereas most car-washes, in Los Angeles were found to deny employees leave breaks despite giving them compensations, which were below the minimum wages. This labor related cases followed the 2008 Wal-Mart’s ‘off-the-clock’ cases, in which the company had failed to compensate their workers in 42 states arrears totaling to $352 million (Lendman par. 5).

U.S. Companies Linked to Sweatshops

In the United States, a number of the leading production companies have been identified to have established extensive links with sweatshops. Recent labor reports indicate that most companies contract sweatshops for the production of their finished goods, in which they demand low costs for merchandise. On the other hand, contract manufacturing firms reduce the wages of their workers in the effort of lowering the production cost; thus, compromising the employees’ safety. By so doing, corporate firms set themselves free from assuming corporate responsibilities; instead, their role is to monitor their suppliers, through which they dictate the labor standards.

Ordinarily, the U.S Department of labor requires corporations to ensure efficient internal monitoring working conditions, through which they are supposed to meet labor standards, especially with regard to the minimum wage and safety of the workers. Therefore, these corporations are believed to engage in subcontracting practices with sweatshops to escape assuming corporate responsibilities while ensuring low-cost production of their goods.

Currently, there are numerous U.S retailers who operate sweatshops in different regions in the nation, which are owned by foreign operators. The U.S Department of labor has identified five corporations, which are known to own sweatshops. These corporations are the May Company, Wal-Mart, Sears, JC Penney and the Federated Department. The Federated Department has been found to rely heavily on sweatshop labor for its production. Consequently, it has established several sweatshops, which include Bloomingdale’s, Stern’s Macy’s and Burdine’s. On the other hand, the May Company operates Filene’s, Hecht’s, Lord & Taylor and other sweatshop companies, which are located in different state cities. The Clothing Co. has also been identified as one of the U.S corporations with ties with sweatshops.

Moreover, there are other U.S corporations, which have established sweatshops overseas to evade the U.S labor laws. Some of the U.S based corporations with sweatshops overseas include Disney, Wal-Mart, Nike, Phillips-Van Heusen, Reebok and Ralph Lauren. Liz Claiborne and the Gap have also been identified to be among the U.S corporations, which own and operate sweatshops overseas.

However, it is worth noting that some corporations, in the U.S violate labor laws extensively but, their unfavorable working conditions remain unnoticed by the U.S Department of labor because; these corporations pay independent monitors to produce false monitoring reports on the working conditions within the firms. For instance, Nike is known to pay private accounting corporations to assess the working environment in their manufacturing factories.

Sweatshops and Labor Laws Violation

Currently, the prevalence rates of the labor violations, in the U.S sweatshops are assuming upward trends. This has led to unprecedented complaints on the effectiveness of the labor laws, especially with regard to the regulations, which have been enacted since the New Deal. Workers in most corporations are increasingly being subjected to unprecedented exploitation. Some of the most common labor violations include minimum wage, overtime, illegal employer retaliation, delayed payments and the so-called of-the-clock violations.

The extensive labor laws violation can be explained by the labor survey report conducted from 2005 to 2012, in which workers in most companies were found be exploited. In this survey, 28% of the workers in sweatshops were found to have denied off-the-clock payments, 3% experienced verbal abuses and 5% were found to have experienced employer retaliation for attempting to form workers unions. On the other hand, 25% of the worker received delayed payments and 6% never received their compensation (Lendman par. 10).

Protecting American Workers

Violation of labor laws has seemingly become an unprecedented socioeconomic problem, in the United States. Exploitation of workers in the sweatshops has reached intolerable limits, especially with regard to exploitation of women and children in the sweatshops. Recent reports show that 85% of sweatshop workers are women and, most of them are of young ages ranging between 15-25 years. These women have been found to be experiencing unfathomable challenges in the sweatshops as most of them are forced to birth controls to avoid being terminated from working.

On the other hand, children are exposed to excessive labor for little pay because; they do not complain. In addition, children are denied the opportunity to pursue education because; they are not given adequate time to attend school; instead, they are subjected to excessive long working hours for a meager pay.

Recently, sweatshops have been identified to be involved in human trafficking, in which immigrants are exposed to unsafe working conditions in the sweatshops for unrealistic rewards and, others are subjected to sexual abuses. This unfair treatment of workers in the sweatshops seems to have imparted profound impacts on the concerned workers, households and the workforce community at large.

Therefore, the need to safeguard the workers labor rights appears inevitable. To curb this menace of the workers exploitation by their employers, stricter labor laws are required to be enacted and enforced in both local and Federal governments (Lendman par. 21). These regulations should be designed to control the existence of sweatshops and improve the working conditions in all companies.


In a brief conclusion, sweatshops are currently becoming widespread, owing to the impacts free trade, which is enhanced by the wave of globalization. However, the working standards in the sweatshops are not in accordance with the U.S labor laws because; they do not meet the minimum wages requirement. In addition, internal monitoring of the working conditions in most corporations is not conducted in a trustworthy manner, in which unsafe sanitary conditions are concealed. Moreover, corporations have been found to establish ties with sweatshops to avoid corporate responsibility, and yet their goods are produced under substandard conditions. Therefore, the operation of sweatshops has caused immense socioeconomic problems among the U.S workforce; thus, efficient labor laws are required to address the issue (Gordon par. 42).



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Title: Existence of Sweatshops in America