OPENING STATEMENT OF THE HONORABLE PETE HOEKSTRA, CHAIRMAN, SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, US HOUSE OF REPRESENTATIVES *

OPENING STATEMENT OF THE HONORABLE PATSY T. MINK, RANKING MINORITY MEMBER, SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, US HOUSE OF REPRESENTATIVES *

STATEMENT OF THE HONORABLE WILLIAM F. GOODLING, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF PENNSYLVANIA, AND CHAIRMAN, COMMITTEE ON EDUCATION AND THE WORKFORCE *

STATEMENT OF PETER KWONG, DIRECTOR OF ASIAN STUDIES, HUNTER COLLEGE, NEW YORK *

STATEMENT OF ROBERT FITCH, CONSULTANT AND FREELANCE WRITER, NEW YORK *

STATEMENT OF WORKER NO. 1 *

STATEMENT OF WORKER NO. 2 *

STATEMENT OF WORKER NO. 3 *

STATEMENT OF WORKER NO. 4 *

STATEMENT OF WORKER NO. 5 *

STATEMENT OF WORKER NO. 6 *

STATEMENT OF JOHN R. FRASER, ACTING ADMINISTRATOR, WAGE AND HOUR DIVISION, US DEPARTMENT OF LABOR, WASHINGTON, DC *

Appendix A – Introductory Statement of the Honorable Pete Hoekstra *

Appendix B – Written Statement of the Honorable William F. Goodling *

Appendix C – Written Statement of Professor Peter Kwong *

Appendix D – Written Statement of Robert Fitch *

Tuesday, March 31, 1998

House of Representatives,

Subcommittee on Oversight and Investigations,

Committee on Education and the Workforce,

Washington, D.C.

The subcommittee met, pursuant to notice, at 2:04 p.m., in Room 2175, Rayburn House Office Building, Hon. Pete Hoekstra [chairman of the subcommittee] presiding.

Present: Representatives Hoekstra, Norwood, Goodling [ex officio],

Mink, Kind, Ford, and Clay [ex officio].

 

Also present: Representatives Schaffer, Scott, Owens, and Miller

Staff present: Jan Faiks, Project Director, Paul Boertlein, Stevan Johnson, William

Matchneer III, Kimberly Reed, Stephen Settle, Arturo Silva,

and Beth Wallinga.

 

Chairman Hoekstra. The Subcommittee on Oversight and Investigations will come to order.

This afternoon, I've called a hearing to bring to light what we believe are some harmful working conditions existing in New York City's Chinatown and perhaps in other parts of New York City, and other parts of the United States. I will leave it to the witnesses to provide the specific details of how this situation has arisen. But I have no doubt that most Americans will find intolerable the living and working conditions of the garment workers that we will hear about today.

It is troubling to me that the wealthiest nation in the world today, with a low unemployment rate, low inflation numbers, and the highest Dow Jones' average in history tolerates the conditions that exist in Chinatown. Let me make it clear before we start that I have personally seen these conditions. I have been to Chinatown with the chairman of the full committee, Bill Goodling. We have talked to workers. We have visited their homes and visited their workplaces.

I realize that my colleagues on the minority have received little notice of this hearing. The explanation for this is fairly simple. Many of the witnesses that will appear before us today do so in absolute fear. They fear for their jobs. They fear for their personal security. The witnesses are workers. They will appear before us in secrecy, behind a screen. I have promised these workers that they will not be identified under any circumstances. That is why I was not able to provide more notice. I felt compelled to honor my promise to these workers.

What we will hear from these garment workers is startling. Over the past few months, I have talked to several of these workers and what they told me disturbs me greatly. Each of the workers I have interviewed tells me that life in the garment industry is difficult. Most work long hours – well into the night; workweeks well in excess of 40 hours, seven days per week. Few workers receive minimum wage. Health benefits were almost always in question. Employers enlist a host of schemes to skim money from helpless workers.

When I asked these workers to share this information with the Congress, I was told o of "blacklisting" practices, under which workers were banned from the garment industry for life just for complaining. I was told that it mattered little whether a worker was union or non-union. I was even told that most union workers fared worse than non-union workers in this environment.

I hope that as we go through this fact-gathering process and this will be a series of hearings, that, together with the minority, the Labor Department, and other members of Congress, we can work on a process to stop the exploitation of these workers. This does not have to be – and should not be – a partisan issue.

The problems in Chinatown, I think, are widespread and multi-dimensional. Today's witnesses will point out that this results from a systemwide meltdown. The Chinatown workers have been failed because of a number of different failures in the system. I think that it is clear that we have failed to protect the workers in this industry. For 60 years, Congress has passed an abundance of labor laws to prevent the deplorable working conditions of these Chinatown garment workers. For 60 years, the Department of Labor has been charged with enforcing them.

But, sixty years of labor laws and regulations apparently do not apply to these garment workers. The long arms of government have failed to reach out to these seemingly invisible workers. Wage and safety violations by their employers are a fact of life. We have to fix this situation. Make no mistake, this hearing and subsequent hearings held under the banner of the American Worker Project have a greater purpose than finding fault. Already we are trying to identify funds so that if the appropriate authority can immediately enforce labor laws applying to garment workers in Chinatown.

If we allow these conditions to continue; if we fail to understand how they came to exist in the first place despite all the legal protections for workers, then we will foster a climate for more New York City Chinatowns. There are already doubts that this is an isolated case. There have been stories in the press recently about sweatshop conditions in the Northern Mariana Islands. I believe there was a hearing this morning on the Senate side talking about that. Many insist that more Federal control would make the problems go away.

We will show today, however, that one need not go to the Marianas to find horrendous working conditions. Federal control does not always mean workers will be protected. All I know is that some workers are being severely exploited and I do not have all the answers. I have not yet reached any conclusions. But, this subcommittee is obligated to start asking questions and finding the facts upon which solutions can be proposed.

Mrs. Mink.

Mrs. Mink. Thank you, Mr. Chairman. I want to assure this subcommittee that the minority is very much concerned about the issues that you are raising today in this hearing. I want to assure you that we want very much to be a part of the investigation; of the deliberations; of the research; and all other aspects of the inquiry that you intend to make on this issue. It's extremely critical, and I want to compliment the Chair and the majority for bringing this matter to the attention of the Congress. It is a very serious matter. I have to say that the comments that I have heard, the books and reports that I've read, the news articles, indicate that there is a very sorry situation existing throughout the United States with respect to the garment industry--and from what I also gather in other industries as well.

So I think it's very important that as we look at our workforce situations and the American worker that we do spend time about the work conditions and some of these specific industries. The majority took the initiative, and I commend them for going up to Chinatown and conducting an independent investigation. The minority was not alerted to the trip, but I did find out where they went. So on Saturday, myself and the counsel of this subcommittee went up and attempted to locate the sites that the majority had visited. We found a couple of them and we had the opportunity also to talk to the owners of those shops and to some of the workers.

It is a very, very appalling situation that we are met with, that there would be workers in the United States that do not have the protections of the Fair Labor Standards Act with respect to minimum wage, with respect to the overtime problems. So I hope that this committee will really delve into it and come up with some solutions.

On the minority side, we have been propounding a solution for a number of years. In the 105th Congress, we have a bill, H.R. 23, that deals with the sweatshop issue. It has about 90 co-sponsors. We hope that as a result of these hearings that the majority will see fit to call hearings on that bill and to ask some of the manufacturers to come down and testify and join in these very, very important discussions.

So, Mr. Chairman, we are here today to collaborate, to join you in this inquiry, to hope that we will be included. It is my hope that our input will be welcomed as we go forth and try to determine what we can do to make sure that these unfortunate workers have all the protections of the American laws that have been put into place for their protection. But, evidently they have been left out of the curve.

Thank you very much.

Chairman Hoekstra. I thank the ranking member for her statement and I hope that this issue can bring us together on working on the American Worker Project. We have made numerous trips around the country exploring different industries. Thank you for your constructive comments.

I'd like to introduce our first witness today. Our first witness is the chairman of the committee. Yes?

Mrs. Mink. Mr. Chairman, I forgot to say how we are welcoming our chairman of the full committee as a witness today. I'm sure he'll have some very important words of advice for the subcommittee. I thank you for being here.

Chairman Hoekstra. Actually that was a requirement that we put on the chairman and get words of advice today, significant words of advice.

[Laughter]

It was under the auspices of the American Worker at a Crossroads Project that I had made my trip to New York, about six or seven weeks ago. Following that trip I explained to the chairman what I had seen, and the concerns and issues that I thought were raised. At that time, he said he wanted to go and see for himself what was going in New York City. So he and I made a return trip a couple of weeks ago. He's going to give us an insight as to what he saw and give us a perspective on the visit and some other experiences that he has had in his district. Chairman Goodling, good afternoon and welcome.

Chairman Goodling. Thank you, Mr. Chairman. Before I go into the deplorable conditions under which these men and women have to work and live, I'd like to remind the subcommittee a little of my background in this whole issue.

On June 6, 1993, the freighter, Golden Venture, ran aground off the coast of New York – all of you will remember. The freighter was smuggling 298 Chinese nationals into the United States. Ten of the Chinese nationals were drowned or died of hypothermia when they were forced overboard in order to swim ashore. The grounding of the Golden Venture forced national attention on the plight of smuggled human cargo into America, but only, unfortunately, for a very short period of time.

It should also be noted that the conditions in the Golden Venture were similar to those on 18th and 19th century ships when they brought their human cargo to America. Ultimately 100 of these immigrants were detained in the prison in my home county of York, in Pennsylvania. It was during that time that I became intimately acquainted with many of the detainees and the issues about which we will speak today. It was in August of that year, that I began writing and calling the Justice Department about ensuring a speedy and fair adjudication of the Golden Venture voyages. Many of these penniless immigrants were petitioning the United States government for asylum because of forced abortion and sterilization.

My personal efforts continued for the subsequent four years, as they remained in prison in York, which my county loved because Federal Government was paying twice as much to have them there as it cost them to keep them. Sometimes on behalf of individual cases or urging the resolution of this senseless of holding of innocent humans. I corresponded and met with various members of the administration, members of Congress. On several occasions, I went to the White House and met with the President in an effort to resolve the Golden Venture matter.

One young man gave up on the United States; he decided he would never get out of prison. He was delivered to his home in China where authorities told his folks he wouldn't be running away again in the near future with two broken legs. Then on February 14, 1997, almost four years after the freighter grounded off the coast of New York, President Clinton called me to announce his decision to release the remaining detainees from prison on parole.

Chairman Hoekstra. Excuse me, Mr. Chairman, can we have somebody move this TV so the minority can get a full picture of the conditions? It is my understanding, Mr. Chairman, you wanted the tape to run while you're giving your testimony. Is that correct?

Chairman Goodling. The latter part of my testimony.

Chairman Hoekstra. The latter part of--

Chairman Goodling. Not necessarily this part of my testimony.

Chairman Hoekstra. We're rewinding the tape.

Chairman Goodling. Fortunately, that was not the end of the story because, of course, they have received no permission to remain, as yet. I think it's a game. I think the INS probably was upset that the President went over their head and that released these Chinese. Many people said well they'll be lost in the crowds and no one will ever find out where they may be. They've reported every time they're supposed to report, legally, just the way they're supposed to do it. But they still have little hope. The President told me that he had to leave the young lady that came in from China because of what would happen to her--came in from Africa--what would happen if she went back home. I said I would guarantee the same would happen here.

The administration told me that we have to leave the Haitians here because of what will happen to them when they go back. I said but we haven police and we have troops in Haiti. We don't have any in China to provide any kind of protection. So I educated myself on the collateral issue of the dealings of Snakeheads – an enormously profitable business of smuggling human cargo into this country.

Snakeheads, of course, are the Chinese mafioso who deal in the ever-increasing Chinese slave trade. In these cases, illegal aliens had obligated themselves and their families to 30,000 indentureds. Many of these who are working in these sweatshops--sons and daughters--are also trying to pay that off. Unfortunately, in many cases the daughters--enslaved prostitution--where the doors are locked from the outside and they're cast in there to remain for the rest of the night and until the next morning. That insurmountable bounty must be paid to the Snakeheads or violent and deadly consequences would follow if this obligation were not met. To sit here and relay this story is one thing, but just imagine what a life must be to live this nightmare.

What I found myself doing ever since I came back Monday, a week ago, wherever I'm traveling by myself I seem to say to myself over and over again, can this happen in America? I just can't believe it can happen in America. When I think if any of my small businesses in my district would ever have situations like this, they would be closed just like that. I mean, it would be over in minutes--in a moment of minutes. So I keep saying to myself, where's OSHA? Where's Wage and Hour? Where's the Health Department? State? Federal? City? Where's the fire department--one little door to get in and to get out? I mean they'd go up in flames if there was just one little bit of fire would ever start--there'd be no way to stop it. Where's the city government? Where's the State government? Where's the national government?

The best I could figure they make somewhere between $1.30 and $3.00 an hour. When you ask, they are all told to say, ``what do you make?'' automatically comes out: ``minimum wage.'' If you say, ``what is minimum wage?'' they have no idea what minimum wage is.

One man worked 16-18 hours. He got $12.00 for his work. They get paid many times by check for 40 hours. I suppose that's to cover in case anybody would come in from Wage and Hour and check anything. Then the rest, hopefully, they will get in cash. Of course, they do piecework. Wonderful workers--no question about that--but, oh, my goodness, to be in those kind of conditions. No ventilation. No light, sunlight. Sewing machines that my mother used to use many, many years ago.

Now the only difference I could see between a union and non-union worker was a little bit of healthcare. The union workers had some healthcare. The non-union workers had no healthcare. But all the other conditions were exactly the same. I used to think that sewing factories in my district went overseas. All of a sudden, I realized how naive I was – sewing factories did not go overseas. Garment workers would come to me and say, ``Don’t let any garments come into this country.'' I would also say to them – because I would always make sure how I dressed before I went, and everything I wore had a U.S. label on it. I'd always say to the garment ladies, ``I'll take off everything I have on that wasn't made in the U.S. if you'll do the same.'' In 18 years of that, I was never taken up.

So all of a sudden I realized I didn't lose them overseas. I lost them to New York City. I lost them to Los Angeles. Well, there are those who say, well, it's a matter of economics, and I agree. I am sure it is while trying to compete in a global market. But, goodness, if we can't do better than that, then we don't belong in that business. We positively have to be able to do better than that. Again, I would encourage--well, it's probably too late now, because I imagine they'd be waiting for you--but to see the kinds of conditions that those people work 12, 14, 16 hours a day. The one young lady said the only day she had off was Chinese New Year in the entire year. It's just a tragedy. I hope that we can find some way to deal with the issue. I also realize that it's their livelihood. So we have to be careful how we handle the situation. But they have to be able to do far better than they've presently done. We have to be able to say to those who would come, to those who would allow themselves to be slaves and brought to this country – we have to find some way to tell them it’s not very good when you get here. And you'd just better think twice before you make that trip. I thank you for the opportunity to testify.

Chairman Hoekstra. Thank you, Mr. Chairman. When you left Chinatown, did you think it was an isolated example or did you believe it to be more widespread?

Chairman Goodling. I believe there are 600 sewing shops in New York City. These shops are not very big, but there are an awful lot of people in a small area. From what I understand, this is repeated in Los Angeles. I recently was told that it's beginning to become an issue in North Carolina. You know, we ought to try to stop it before it spreads, it seems to me. It's just totally unfair to these people.

Chairman Hoekstra. Ms. Mink, I am not sure of the impressions you had of the sewing shops that you went through. But if you take a look at the middle easel, the picture depicts the way that we found the shops that we went through. We just walked down the street and wherever we saw a steampipe. We would go up to that steampipe on the third floor, and up we would go. So we just kind of went randomly through parts of Chinatown and picked out buildings that we would go into.

Chairman Goodling. Well, there is no way you can tell whether it is a factory.

[Laughter]

How do you go inside to find that out?

Chairman Hoekstra. Except for the steampipe.

Ms. Mink, do you have any questions?

Mrs. Mink. Thank you. We went into one particular establishment without knowing whether it was a sewing shop or not. It was called, I think, Eagle Sportswear. We found that it was a non-union sewing shop and talked to the owner and his wife and found pretty much similar situations as we had seen in the two union places that we visited. So the pictures that you're showing us are pretty much what we also saw.

But I think it's important, Mr. Chairman, that we recognize that in Chinatown, as I'm told, we have about 500-600 of these sewing shops with maybe 25-30 people each. But, that in the rest of New York City, in the larger metropolitan area, there are 6,000 more. So, while the visit in Chinatown is relevant, I think we need to enlarge our investigation to cover the other 5,000 there in New York City, as well as Houston, San Francisco and Los Angeles where large ethnic, minority women are also facing a similar situation as the Chinese are in Chinatown. Many Hispanic, Latin American, minority women are facing these identical conditions.

So I want to express my enthusiastic support and encouragement to you, Mr. Chairman, that you help us really conduct a thorough investigation and come up with a solution. Because I don't think fingerpointing to this or that, or failures here and there, everybody has shared responsibility as I see it. The State government, the city, in fact even, and the Federal Government certainly, the unions--everybody I think has a share of the burden. We have a burden, too, for not having pursued this matter vigorously in the past. But I would hope that we could come together and really look at what can be done.

Some of the recommendations that these other two witnesses are making I think deserve our attention and some that are included in H.R. 23. So I mean this not to detract from our deliberations, but really to earnestly ask the majority of this committee to look at the legislation that we have. Let's work on it. Let's find a way in which we can hold people responsible to helping us.

The women who work in these shops are not powerless. They're sometimes described that way, but in reading Peter Kwong's book, we see that they took initiatives in many cases--went out in the streets and demonstrated. They have a vigor and compassion and commitment to their well being. So we need to find a way to mobilize that.

I think some of the recommendations in H.R. 23 merit your attention. So I hope that that's what will keep this investigation going. Hopefully, the end of it will be some legislative means that we can all agree to support.

Chairman Goodling. I think one of the things that is certainly missing is enforcement. I mean, as I indicated earlier, if there were any of those in my district, they would have been closed just like that. I mean, I just can't believe that. You know, all of us should have that opportunity because I do not imagine if you have not been there you can imagine exactly what is going on. You have to see it to understand it. It's just pretty shocking to me.

Mrs. Mink. Thank you, Mr. Chairman.

Chairman Hoekstra. Thank you. What we also saw was one of the living quarters where somewhere between 25-30 people were living in fairly small apartment.

Chairman Goodling. --Fairly small?

[Laughter]

Chairman Hoekstra. Very small.

Chairman Goodling. Three families, and if there were five to a family, they all lived and slept in the same little bedroom.

Chairman Hoekstra. Yes.

Chairman Goodling. There was a little kitchen that I guess they took turns when it was time to eat. I'm not sure how they rotated who used the kitchen first, but living conditions were horrendous.

Chairman Hoekstra. We also have talked to some of the other businesses in the garment industry because each time you have one of these shops that's operating illegally, it's threatening the livelihood of a legitimate business person and a legitimate worker in New York City, or in Los Angeles.

I don't know if any of the other members on the panel here have any questions for the chairman, or whether we'll just move on to our next two witnesses. Any questions on the minority or the majority side?

[No response]

No? All right. Thank you, Mr. Chairman.

Let me introduce our second panel. The first witness is Professor Peter Kwong, who's the chairman of the Asian Studies Department at Hunter College in New York City. Professor Kwong has long been identified as an expert on the plight of the illegal Chinese aliens in Chinatown. He has recently published a book entitled Forbidden Workers: Illegal Chinese Immigrants and American Labor.

Our second witness is Mr. Robert Fitch, who is a consultant and freelance writer from New York City. Mr. Fitch has written for Village Voice, among other publications. Mr. Kwong, welcome. Welcome; thank you both for being here.

Mr. Kwong. Your honor, Mr. Chairman, and members of subcommittee, What I am testifying about here today are the labor conditions in New York's Chinatown. While they are not unique among immigrant communities across the country, they have the rare distinction as being the worst.

The hourly wage for garment ladies working on piece rate is around $3.50--way below the minimum, Federal minimum wage of $5.15. In order to make enough to support their family, they work very, very long hours--12 hours, 17 hours, seven days a week without overtime pay. The conditions they work under is not much better. In old dilapidated buildings, 30-year old machines, without proper heating and ventilation and without adequate fire safety provisions. The windows are usually locked shut to prevent thieves. A horrific modern-day triangle, shirtwaist fire is waiting to happen.

Underpayment of wages and long hours is not the only problem. Even worse for the factory workers is that the owners withhold their wages. In the past 10 years, thousands of workers have complained that their employers have owed them wages – a month, two months, sometimes half a year’s worth. The shop owners have violated a very basic right of a worker--that is, to be paid after work that is done. When workers ask for the back wages, they would be given all kinds of excuses. Then if pushed further, they would be threatened or even blacklisted. In the meantime, the employers will let their accountants figure out how much backpay, back taxes, and how much backpay they have owed so able to help them to decide when they close the factory down and change to a new corporate entity and reopen a new shop.

Now to blame all this problems on the Chinese contractors is just too simplistic. They are behaving this way because they can get away with it. American authorities are not intervening. The performance of the Labor Department can at best be described as ineffective, passive and slow. According to their own statistics, 90 percent of the shops are actually sweatshops. Yet, they rarely initiate actions. If criticized, they will complain about understaff and then they will blame the workers for not coming forward. If the workers do come forward, they would take months to investigate and in the meantime expose the workers to retributions from the bosses.

Now, the unions are not doing much better. Their performance can best be described also as ineffective, passive and slow. What's worse, the union representatives tend to have better relationships with the owners and regularly side with them. Those workers, who are willing to come forward, therefore are silenced. In the meantime, conditions get worse. Home work and child labor, thought to have disappeared 50 years ago, have reappeared.

The long hours have also taken tremendous physical toll on these workers. We're not talking about bronchial asthma problem or back pains. People working over 80 hours a week develop all sorts of uncommon problems--dizziness, headache, missed menstrual period cycles, physical paralysis, et cetera, et cetera. But the institution that could really make the difference is the manufacturers. They're the ultimate power. They have the ultimate power to decide whom to give the contract to and how much to pay the workers. Yet, the manufacturers take advantage of the subcontracting systems, force a bidding war among the contractors, they allow prices to stay low knowing the fact that they cannot offer minimum wage to pay their workers.

So, therefore, every institution so far has failed the workers. Everybody wants to pass the buck. This is why the situation in Chinatown is in such hopeless mess. It has come to pass that sweatshops and the Chinese people have become permanently synonymous in the American mind. When one mentions sweatshop, one automatically thinks of Chinese. Those who know the situation are too self-interested to want to talk about it. Others realizing the sensitivity and explosiveness of the issues and parties involved stay away. Those of us who want to see something done are being accused of anti-union, pro-business, ultra-leftist. In the meantime, Chinese owners accuse us for hanging dirty laundry in the public. The Chinese establishments actually accuse those of us who fight for back wages for the workers to get wages back trying to destroy the garment industry in Chinatown.

But facts are stubborn things. Any individual will see the situation calls for resolution beyond partisan politics. This is no longer a labor issue. If this degrading condition continue, Chinatown's workers are forced to work, threaten to leave a permanent stain on America's image itself as a free and humane society. As long as this situation continues here, our leaders have no right to criticize other countries for labor abuse and human rights violations.

Finally, I would like to say that if this question is not dealt with this institutional negligence will only encourage more illegal immigration to come to this country--as the employers look for even cheaper and exploitable laborers. So, it seems to me that it is time for us to leave partisan politics and, in a joint effort, build a boardwalk to stop this country's working conditions from sliding to the Third World conditions. Thank you.

Chairman Hoekstra. Thank you, Mr. Kwong.

Mr. Kwong also had the opportunity today to meet with Henry Hyde of the Judiciary Committee to talk about the aspect of illegal immigration as it's associated with this problem. He also had an opportunity to briefly meet with the Speaker of the House and talk with the Speaker. Perhaps the next time we go to New York, we'll be taking the Speaker with us to take a look at these conditions.

Mr. Fitch.

Mr. Fitch. Chairman Hoekstra, members of the committee, thank you very much for inviting me.

The conditions at 446 Broadway that I reported on a couple of months ago in Village Voice were certainly very bad. Nearly round-the-clock labor, seven days a week, extraordinarily low pay, sometimes as little as a $1.00 an hour, even no pay. Going into last year's Christmas season, nearly 100 workers employed by Mrs. Lai Fong Yuen, producing Kathy Lee Gifford clothes hadn't received a check in 10 weeks. Worse, however, was the discovery that the conditions found at 446 Broadway were no anomaly.

An internal unreleased report dated August 16, 1997 produced by the U.S. Department of Labor showed that they prevail in most garment shops in New York City. But worst of all – worst of all from my point of view as a former business representative of the union – was the finding in this report that the shops having contracts with UNITE – the 225,000 member garment union that's best known to us as the fighter against sweatshops in media campaigns – are actually more likely to have sweatshops under contract by the unions' own definition than non-union shops. The figures are 60 percent for non-union shops, 75 percent for union shops.

Historically, the point of trade unionism has been to remedy bad conditions – not make them worse. Yet UNITE, which has exclusive recognition agreements with major employer associations in the city and which can invoke its union's security clause to fire workers who refuse to join the union has not just failed to act in the interest of its members, it actively works against those interests. UNITE and its predecessor, the ILGWU, has presided over the worst deterioration in labor standards in American history.

In 1946, wages in the New York City garment industry stood at nearly twice the rate of average U.S. manufacturing wages. Garment industry wages were comparable to wages in the auto and steel industries. Since the 1950s, however, real wages in New York City's garment industry have fallen by over two-thirds in terms of total hours worked weekly; the length of the average working day; the pay for work performed; sanitary standards; the well-known vagaries of the subcontracting system. Conditions, as a whole, are reminiscent of those described in 1910 in Theresa S. Malkiel's classic The Diary of a Shirtwaist Striker.

Mass strikes by immigrant women workers which began in 1910 with the revolt of the 20,000 produced concessions from the industry to the then recently formed ILGWU. The famous protocol of peace provided for a 56-hour week. Today, for new immigrant workers, the 56-hour week seems like an impossible dream. Wages then, in 1910, ranged from $.16 to $.30 an hour. In today's dollars, wages of the top range – nearly 90 years ago – are roughly comparable to the $3.00 an hour workers receive today.

Where did we go wrong? This is a question which long-time ILGWU president, David Dubinsky, dared asked when he recognized in the mid-1970s that the union was headed in the wrong direction. We've let everybody else and factory wages and only a few years ago we told New York Times labor reporter A. H. Raskin. Now we are criticized because our wages are too low. It is true. Many of them are too low said Dubinsky. Wages have fallen much further since then. But his appointed successors, the sycophants, as Raskin called them are far less self-critical. They refuse to acknowledge that the factories where UNITE continues to collect monthly dues of $18.00 and initiation fees of $35.00 are sweatshops.

Unlike Dubinsky, they deny any responsibility for the unprecedented wage decline. Privately, some union officials will admit that UNITE does not enforce its contract. "We're doing all we can," they insist, in a system of global competition. On its face, this disclaimer of responsibility evades a grotesque irony. The assets of America’s richest union have been extracted from its poorest workers. But New York City's garment workers unparalleled wage declined can't be understood simply in terms of global market forces. Wages in California non-union garment shops are insufficient to keep a four-person American family above the poverty line. But they aren't generally low as the sub-minimum wages prevailing in New York City. In Northern Italy and France, unionized garment workers make many times the wages of their American counterparts.

Just as important as the leveling tendency of global competition has been the union's behind-the-scenes strategy over the last 50 years, its struggle for lower wages. Now the notion that the union is engaged in such a regressive undertaking must seem far-fetched to those who only know the public face of the union. Its struggle against sweatshops, its campaign for the union label, its admirable education and philanthropies. But as Herbert Hill, the NAACP's labor secretary who served as a consultant to your committee more than 30 years ago observed, the union has two faces. Despite the huge shrinkage of its membership, UNITE remains America's richest unit in assets per member.

In New York City, the union has used its over a quarter of a billion dollars in assets for political influence with such assets inevitably creating a fight behind the scenes for lower wages. In other words, the union hasn't sat passively by and simply allowed wages to fall, it's fought actively and with great ingenuity to make possible the resurrection of the old sweatshop system. But why? What could possibly be the union leaders' motive? In sorting their overall wage strategies, unions must choose between the low road and the high road. The high road of raising wages forces employers to invest in laborsaving capital equipment, which inevitably displaces members. The low road minimizes wages but preserves membership.

The ILGWU and the Amalgamated were conscious low-road risers. This was evident as far back as 1962 when the two unions collaborated in a 14-page document asking that the Department of Labor deny funds for manpower training programs in the apparel industry in New York. Lazare Teper and Morton Fried, the research directors of the Amalgamated and the ILG respectively wrote and I'm quoting, "It is our considered judgment that the subsidized training of apparel workers under the Manpower Development and Training Act is unnecessary on the basis of our many years of experience in the apparel industry. We're convinced that such training of apparel workers is not only a waste of Federal funds, but sits in motion forces detrimental to the health and stability of our industry."

Chairman Hoekstra. Excuse me, Mr. Fitch. Are you going to read it all or can you summarize?

Mr. Fitch. I wanted you to have that language because it comes from their mouths that they're against training of workers because it would destabilize the industry.

Chairman Hoekstra. All right. Good, thank you.

Mr. Fitch. I think it's also important to notice that the union has fought against raising the minimum wage in City Council. It has threatened to resign from the Central Labor Council in New York City if it raised wages. Recently in 1992, the assistance of the president of the then-ILG protested against a union plan to raise minimum wages in New York City to me specifically.

I'd like to conclude by saying that the appalling labor standards in the richest city in the world aren't self-explanatory. Invoking impersonal economic forces and ethnic stereotypes won't get us closer to an explanation either. Its deteriorating conditions in the last 50 years need to be understood as the product of a condominium of forces which include the union, the Labor Department and the employers, but the union has done a great deal to shape that condominium.

The answer is not a union-free America. The answer is a union free of corruption and running in the best interest of the members. In the long run, the organized workers themselves can only produce the remedy for bad working conditions. Only they can ensure that their interests receive first priority in their own union. It's obviously not a UNITE member interest to be burdened with the highest administrative expenses of any American union, while they earn the lowest wages.

But to change those priorities, the workers here today will have to takeover the leadership from the six-figure socialists who promote their own well being and those of their retainers over those of dues-paying members. In the short run, government action can produce a partial remedy that corrects the worst abuses. Congress can act to bring those who are ultimately responsible for the nonpayment of wages within the law's reach.

Right now, the difference between unpaid Russian minors in Siberia and their American counterparts in New York City is that in the former country workers have a better legal plane. The government there at least acknowledges that unpaid workers must ultimately be paid. Here in the United States in the garment industry, there is no legal mechanism effectively assuring workers the right for full payment for work performed.

The sweatshop problem, I would like to suggest, is not just an overseas problem or a non-union problem; it is an American problem. By drafting a strong manufacturers accountability bill, the committee can confound its critics and live up to the tradition of its predecessors, whose motives were attacked as partisan, but who nevertheless fought to protect and extend workers’ rights. Thank you.

Chairman Hoekstra. We thank the gentleman for summarizing his testimony.

Yes, Mr. Ford?

Mr. Ford. I thank the gentleman, too, for summarizing his testimony, Mr. Chairman.

Chairman Hoekstra. Thank you. Professor Kwong, you have studied this area for a long time. I think you've studied it for 20 years. Are conditions improving or deteriorating?

Mr. Kwong. Much worse. I started studying Chinatown in 1981 when I volunteered to teach Chinese ladies. So I have very intimate knowledge. Since that time I have written two books and a lot of articles and documents. So objectively speaking, it is now much worse than when I first started it.

Chairman Hoekstra. When we were in New York – I don't know if you've got a copy of this list – but, we talked to some workers trying to understand exactly what the cost component was for each piece of sewing under the piecework system.

Mr. Kwong. Right, I remember that.

Chairman Hoekstra. If you'd verify this document, I'd like to submit it into the record, without objection. This document was prepared in our talks about the labor components of a shirt.

Mr. Kwong. Right, I remember you –

Mrs. Mink. Mr. Chairman, it would help if we had a copy of that so that we would know whether we have no objection.

Chairman Hoekstra. Okay.

Mr. Kwong. Yes. I remember you were wearing a polo shirt – approximately $50.00 – and the ladies decided to deconstruct how much it cost for them, how much they get paid for every single part of the clothing. So this list – about 15 different chores – in other words collars, sleeves, shirttails added together. The total cost was $1.38. That was basically the--

Chairman Hoekstra. We did that. I wanted to get an idea as to what the labor component was of a shirt, to find out, you know, is it a $10.00 item, that when you pay somebody $3.00 an hour, you're saving $14.00 versus minimum wage or if you paying three bucks. What we're talking about here is the sewing on a shirt at two bucks or three bucks an hour is a $1.38. So if you paid minimum wage, the cost on a shirt might go all the way up to –

Mr. Kwong. Two dollars.

Chairman Hoekstra. Two dollars, $2.80.

Mr. Kwong. We're talking about if you paid regular, minimum wage, the most it would increase is under a dollar.

Chairman Hoekstra. Yes. I will yield to the ranking member.

Mrs. Mink. Thank you, Mr. Chairman.

I note that in both of your conclusions that you arrived in your testimony that both of you are calling for a manufacturer's accountability law. In your review of the problems, that this is probably the best way to attack the issue. To make the manufacturers assure these workers that they're getting minimum wage. That sheet business being passed around which we haven't seen is probably illustrative of why the manufacturer is the one. If he's going to send down 1,000 pieces to the sewing shop to have sewn together, or whatever, and says to the contractor, I'm only going to pay you $5,000 for these 1,000 pieces. If the manufacturer knows full well that it's going to take three hours to put that thing together, obviously they have complicity in knowing that the $5,000 isn't going to make it. Because the time required to do the sewing is much greater than what they are paying for.

So I think it's very legitimate that both of you are looking at it from how we can correct this problem. I think that's something that I find quite attractive and again want to compliment you for not just raising the issue and saying okay, here's the problem. I think both of you have come up with a very responsible recommendation. I hope that this committee will seriously take you up on it.

So I'd like to leave that, Mr. Chairman, and yield. I know that many of my colleagues want to have their five minutes.

Chairman Hoekstra. Thank you. If the gentlelady would just indulge me since I gave up my time early. I didn't have copies to submit to the minority.

Mrs. Mink. Mr. Chairman, is this an English-only document?

Chairman Hoekstra. This is an English-only document. That is correct.

Mrs. Mink. That's wonderful. I have no objection to its introduction.

Chairman Hoekstra. I'm just trying to figure out how we'll ever enter it into the record.

Mr. Kwong. We will try to translate it for you.

Chairman Hoekstra. What's that?

Mr. Kwong. We'll try to translate it for you.

Chairman Hoekstra. Yes.

Mrs. Mink. I don't know that the document will not have its value translated; it has to be entered as it has been submitted, Mr. Kwong.

Chairman Hoekstra. Okay. We also gave you some timesheets because the--

[Laughter]

That's right. You know me. I like timesheets. I am into timesheets. I'm verifying and certifying timesheets all day long. It's kind of an inside joke. Not a joke? Okay, sorry.

[Laughter]

This is an awful serious group on the right, here.

But the timesheets, these are the timesheets that we reviewed that showed that a lot of workers – at least this worker – is basically working seven days a week?

Mr. Kwong. Right. You can see this worker gets in 8 o'clock in the morning and gets out at 8:00 at night--seven days a week. At least from this one, these two sheets, you can see six weeks of seven days a week over eight hours per day.

Chairman Hoekstra. The rest of the workers that work at 446 Broadway – which I think, has been in the news. Mr. Fitch when you talked about 446 Broadway, you noted that more than 100 workers had not been paid for more than 10 weeks at this location. Is that correct?

Mr. Fitch. That's correct.

Chairman Hoekstra. Do time cards like this surprise you?

Mr. Fitch. No. My understanding is that very elaborate charades are carried out that even go to the point of having workers buy their checks. In other words, these workers who are contracted with a sportswear association to be paid $9.00 an hour don't get $9.00 an hour; they don't get the Federal minimum of $5.15; they don't even get the New York State minimum wage which is substantially lower--$4.25--they get lower. But in order to evade the scrutiny of the Wage and Hour people who are easily jaded, they have this system of buying their checks. So, if the workers really, according to the employer, are entitled to only $200 and the formal amount they worked would be $300 – the worker will pay $100 for his check.

Chairman Hoekstra. Yes. We'll talk a little bit more about this practice. I think some of the workers will testify about buying their check. Mr. Norwood.

Mr. Norwood. Thank you, Mr. Chairman. Mr. Fitch, are you anti-union?

Mr. Fitch. I think that, as I said in my statement, that the only serious long-term remedy to the conditions that we're talking about is aggressive rank and file unionism. That is why I object to the caricature of unionism that's being displayed in New York City by UNITE.

Mr. Norwood. So can I conclude from that then that you are pro-union?

Mr. Fitch. Yes, sir.

Mr. Norwood. Why are you so critical of this garment workers' union, UNITE? You have been very critical.

Mr. Fitch. Yes, sir. Yes, sir.

Mr. Norwood. Why?

Mr. Fitch. Yes, sir. Because I think that we need to hold to a very high standard the fundamental institutions that enable working people to fight back against oppression.

Mr. Norwood. Don't we do that in unions?

Mr. Fitch. I think that our Labor Department is not vigorous in upholding labor standards. I think that corruption is ripe in New York City unions. Right now, for example, in the major Civil Service Union of the 56 locals – eight under investigation by the District Attorney – I think we have corruption problems. I think we have unions that strike less than any other country in the advanced industrialized world. As a consequence of the corruption and lack of militants, lack of representation, our unions are ineffective.

Mr. Norwood. Everything that I've heard you say is the opposite of what I thought that a union would stand for and would be its objective. Now, do I understand you to say that this particular union has corrupt practices that are unique in the labor movement? You're not talking about everybody's like this. Are you saying this particular one? If this particular one is different from what I thought labor unions were all about – what's the difference?

Mr. Fitch. I think that one difference is, sir, that, as a result of legal loopholes, this union is able to receive hundreds of millions of dollars over time from employers to give it an enormous war chest that allows it to build a public image that is at great variance with its performance of its contracts here in New York City.

Mr. Norwood. Federal loopholes?

Mr. Fitch. Yes, sir. Yes, sir. I don't believe the committee will be looking into that.

Mr. Norwood. How long have you been studying the garment industry? I mean, where are you getting this information? Have you been involved in this a long time, the study of the garment industry?

Mr. Fitch. I've been a business agent, investigative reporter, and a professor of metropolitan studies at NYU since 1982.

Mr. Norwood. Have you talked to a lot of the employees in the garment industry?

Mr. Fitch. I have for this story been interviewing quite a few workers. Yes.

Mr. Norwood. Give me some clue. Have you interviewed 10 or 12 people?

Mr. Fitch. Yes, sir. Yes, sir.

Mr. Norwood. So you've talked to a few of them.

Mr. Fitch. I've talked to 10 or 12 for this story, included 446 Broadway workers and subsequent to that I've talked to a good deal more.

Mr. Norwood. I'm truly amazed by what I'm hearing today and I'm glad we're going to have other hearings, Mr. Chairman, because I'm interested in hearing more about this. This has been a bit confusing. Have you gone to Federal officials about what your concerns are?

Mr. Fitch. Yes, I have.

Mr. Norwood. State officials?

Mr. Fitch. Yes, I have.

Mr. Norwood. What do they say?

Mr. Fitch. Privately, some of them are quite concerned and are encouraging me with my investigative work.

Mr. Norwood. Well, did you encourage them to do their investigative work?

Mr. Fitch. I certainly did.

Mr. Norwood. They said, fine, we'll do that or they said well, why don't you do that for us?

Mr. Fitch. I think that there's a sense that there are obstacles to prosecuting cases. In some cases there are often political obstacles in agencies perhaps this committee could investigate. I think that a lot of officials are conscientious and would like to do their job.

Mr. Norwood. You want to say that in plain English? Why really aren't they investigating this?

Mr. Fitch. I think that –

Mr. Norwood. I mean ,really now, something's wrong here. Why aren't they investigating this and doing their job?

Mr. Fitch. Well, I would investigate the $450,000 in campaign contributions that UNITE has passed out in the last election cycle. I think that might have something to do with it.

Mr. Norwood. Mr. Chairman, I know the light's on but –

Chairman Hoekstra. The light's on. Mr. Kind.

Mr. Kind. Thank you, Mr. Chairman. I, too, want to thank the witnesses for coming and testifying today. Mr. Fitch, I just can't let that comment that you just made just hang out there. I mean, $450,000 of campaign contributions made by UNITE?

Mr. Fitch. Yes, sir.

Mr. Kind. Is it a direct cause and effect?

Mr. Fitch. --Amalgamated, yes, sir.

Mr. Kind. You're saying that this is a direct cause and effect of the conditions that exist in the--

Mr. Fitch. No, sir. No, sir. That wasn't what I said. I responded to the question as to why the Labor Department is not more vigorous in its investigation and publicity of these conditions. For example, when the Labor Department did its investigation in August 1997 it never came out that any of the shops were union shops. That information was withheld from the public. I wash shocked and can only conclude, given the startling nature of that discovery that there is some bottleneck which prevents information which the public and working people need to have from getting out to the public.

Mr. Kind. So you think the Department of Labor is purposefully bearing the fact that unions are responsible for these workshops and these horrendous conditions because of campaign contributions being made to the administration? They don't want that –

Mr. Fitch. I think that I would investigate – and I would like to do this – I would like to investigate the pattern of contribution; the influence of the appointments in the Department of Labor; and why these laws are not in force. I think that is the hypothesis that I would like to investigate. When I'm asked to suggest why the investigations aren't going forward and why the information is not coming to the public, that is the hypothesis that I would explore.

Mr. Kind. But certainly a lot of enforcement capability that exists at the State and local level, and yet these conditions still exist right there in Chinatown. So obviously State and local agencies aren't stepping in getting the job done either.

Mr. Fitch. No, they're not. No, they're not. I would ask why do we –

Mr. Kind. Do you think there's that same cause and effect that UNITE's contributing heavily to State and local officials?

Mr. Fitch. I would add to that that the Liberal party, which, although very small, plays a disproportionate weight in local politics, has been very influential in New York City and New York State and that this might be another possible reason. The party was founded by the ILG.

Mr. Kind. Mr. Kwong, you indicated in your testimony that the reasons the contractors are behaving this way are because they can get away with it.

Mr. Kwong. Right.

Mr. Kind. So, obviously, there is a major problem of enforceability?

Mr. Kwong. Right.

Mr. Kind. – Of the laws already on the book? What would you recommend us to do? I mean, is it a problem with the laws as they exist; or a problem with the way they're being enforced; or a problem with a lack of resources going to agencies responsible for enforcing these laws?

Mr. Kwong. Well, I think the most important is gaining trust from people, from the workers. That is to say, I mentioned the fact that when a worker complains about problems it takes months to go through the bureaucratic process. In the end, usually nothing comes out of it because they can't find the owner because the owner has changed their partnership or incorporation. So what I'm trying to say is that the issue is not understaffing. The issue is how you could encourage people to come forward to report violations and have the confidence that something is going to be done about it and done quickly. So, you know, I don't want to get involved in this campaign contribution issue, but I think the issue here is getting the trust from the working people that the government is working for them.

Mr. Kind. Well, what's the concern right now that most of the employees have as far as stepping forward and reporting some of these violations? What had you observed as inhibiting them from doing that?

Mr. Kwong. Well, if you report, you still have to work. All right? You never know once you report or complain if you are going to be singled out as somebody who went to the authorities. You might very easily be blacklisted. Since many of these women do not speak English, there's nowhere else to work. Now blacklisting in Chinatown means you will not be able to get anything, any job here. That means death. In other words, the trade-offs are too heavy to take that kind of risk. I think this is something that we have to think about.

Mr. Kind. Is this true for union and non-union workers?

Mr. Kwong. Both.

Mr. Kind. In what way?

Mr. Kwong. In the sense of union members complaining about it and the business agents do not always come forward or do not always prosecute. Again jeopardizing these workers, the very worker who bravely come forward to report violations.

Mr. Norwood. Will the gentleman yield just for a second?

Mr. Kind. I see my time –

Chairman Hoekstra. Will the gentleman yield…his time is up.

Mr. Kind. Right. I'm sorry.

Mr. Norwood. Thanks.

Chairman Hoekstra. I'm going to yield to Mr. Schaffer. Maybe Mr. Schaffer will yield to the gentleman from Georgia.

Ms. Schaffer. Thank you, Mr. Chairman. I yield to the gentleman from Georgia.

Mr. Norwood. I thank you for that. I understand what you're saying when you say that perhaps the workers are scared for whatever reason to complain. That doesn't excuse, however, State, county, Federal officials ignoring it when other people complain. Does it have to come from a worker? Haven't you been to the Federal officials about this?

Mr. Kwong. You must have to have specific incidents to complain about. So in other words, as the procedure goes if you accuse someone of doing something wrong, you must come forward with witnesses or signed statements or whatever. In other words, it's got to be a concrete situation.

Mr. Norwood. Thank you very much.

Ms. Schaffer. My guess is there's got to be some reputable, responsible employers that we could point to as good examples or are they all guilty of creating these slave-like conditions that have been described today?

Mr. Kwong. There are many good employers.

Ms. Schaffer. Let me just start from there. What role are they able to play? I know in many different industries it is the reputable, responsible manufacturers, employers, and professionals –

depending on the industry – that find it desirable to establish some type of standard which they play a role in working with legislative bodies – the city, the county, the State, the Federal Government. There's a competitive question and advantage for reputable, responsible employers to assist and participate in establishing an industrywide standard regardless of the industry. Is there any place we can look for industry assistance and support and guidance?

Mr. Kwong. As I mentioned earlier, some manufacturers basically know that they offer very low prices to contractors, and they get them to bid against each other. So, if you are a responsible employer, you might lose that contract. So if you can't take the heat, you get out. Many of the people don't engage in that. The other possibility or other problem is that –

Ms. Schaffer. But wait, let me interrupt you if I may. Because what you describe is true in every single industry in America. There is always the need to maintain competitiveness and at the same time honor the human dignity of those who are your employees.
There is, therefore, normally a compelling motivation to establish an industrywide standard under which human dignity is preserved, yet competition is allowed to exist. That occurs in many different industries--real estate, banking, insurance, auto manufacturing, all kinds of manufacturing areas. I'm trying to see if there's some way we could not use internal market forces and appeal to the conscience and judgment of those responsible manufacturers to –

Mr. Kwong. I think, ideally, you're correct; that should be done. But, I think the pervasiveness of "low-ball" competition in this industry is such that model behavior is seriously discouraged. There is no incentive for those people who are behaving well to come forward and speak out.

Ms. Schaffer. Well, there's been some discussion of unionized shops. What about those employers who have unionized workforces? Do those employers seek to arrive at an industrywide standard that seems to be fair, sensible and just?

Mr. Kwong. Well, the result has been mixed. In fact, UNITE's own report from a few years back stated that union shops actually offered lower wages than non-union shops. So, it's not clear that people who are in unionized shop do much better. In some instances, people prefer to work in non-union shops. The only benefit that workers seem to get out of unionization in Chinatown is health care benefits.

Ms. Schaffer. What would be the impact if the Department of Labor actually did its job and went in and enforced all of these sites with slave-like conditions? What would be the impact of that kind of a shakedown with respect to the unionized shops that exist today?

Mr. Kwong. Well, Chinese people then will be part of America. They'd be protected by law. They would be protected by a labor enforcement agency. In other words, to me this is civil rights issue whether or not they are being protected. Why should there be any situation where a whole group of people who are immigrants and living in second and third-rate conditions?

Ms. Schaffer. My time has expired. Let me impose on the committee for just another moment. Are the rules in place that are needed? Is this just an enforcement matter or is there more legislation that is needed, in your opinion?

Mr. Kwong. Every single party has to be made accountable – manufacturer, the labor union, and the labor enforcement. The public ought to be outraged over this neglect. What I'm writing about, what I've been talking about, is not new. It's been going on for quite some time. It's fortunate right now there's national attention to the problem. But the public's got to understand that this is not right in America; this has got to be stopped and stopped now.

Ms. Schaffer. I thank the chairman and the committee for its indulgence.

Chairman Hoekstra. Mr. Scott.

Mr. Scott. Thank you, Mr. Chairman. Mr. Chairman, I'd like to ask the ranking member a question. Comments have been made about UNITE and I'd like to know what the status of their testimony might be. Did you ask that they be given the opportunity to –

Mrs. Mink. Yes. Yes, I did.

Mr. Scott. With the comments being made today and the criticisms--should they have been given the opportunity to respond to some of this criticism?

Mrs. Mink. I was hoping that in the spirit of fairness and congeniality that at the appropriate moment, I was going to ask the chairman of the subcommittee to allow the representative of UNITE to respond to all of the comments that have been made. I think that's ultimately fair. I hope that you will agree to that at the end of this hearing.

Mr. Scott. I thank the lady for that information because obviously we've been at a disadvantage. I want to thank the staff for their detective work and following through and allowing at least one person on this side to be able to visit to have the information so that we would be able to know what the hearing was about. Let me ask either of the witnesses – Mr. Kwong, I believe you've indicated that the manufacturers have been placing the bids and the competition for the bids is so intense. Should the manufacturers know that the work couldn’t be done for the bid price and the contractor pay minimum wage?

Mr. Kwong. They certainly should. I mean, just like that sheet exhibited earlier, it doesn't take a rocket scientist to figure how much labor cost is involved, how much time it takes to do the job; the job versus the pay under the piece-rate system. Yes.

Mr. Scott. There's no question – I mean, the calculations as such that they know the work cannot be done consistent with minimum wage and OSHA and other Federal requirements.

Mr. Kwong. There should be no question unless you have super-supermen that will work so much faster. But we're talking about average women workers – it’s pretty simple to determine that they cannot make minimum wage under this system.

Mr. Scott. Mr. Fitch, can you answer the same question? Can a manufacturer possibly know –could they possibly not know that the work is being done without payment of minimum wage?

Mr. Fitch. I think that the manufacturers are more aware of this than anyone. But I would just like to suggest that there's more than one method to bring about the responsibility of manufacturers. The lack of any wage pressure coming from below has resulted in an industry that is as unprogressive as it was 100 years ago. Chairman Goodling described the machinery as the kind of machinery that his grandmother worked with.

Mr. Scott. What liability do the manufacturers have under present law for the wage violations?

Mr. Fitch. Effectively speaking, it doesn't seem possible to touch them.

Mr. Kwong. It's mainly none.

Mr. Scott. The contractors – I thought I heard Mr. Kwong suggest that they may be here today and gone tomorrow and reorganized so that you don't know--so that even if you tried to enforce the law, you would have difficulty trying to find a responsible party.

Mr. Kwong. Well, yes, you're right. However, I think the Labor Department could be much more aggressive in pursuing those cases. For instance, there is one case in 1991 in which an employer owed $71,000 to workers. Many of the workers finally got fed up and decided that they wanted something done. The Labor Department basically said well, you know, we can't find these employers….sorry. Then we went to the State Attorney General's office. The Attorney General's office, too, came back and said that owners had disappeared. Now, the workers themselves on their part decided they would find these employers and in short time, they found the employers. The point here is –

Mr. Scott. Did they ever collect anything?

Mr. Kwong. Well, the owner was given a six-month jail sentence. That was the first case in New York State's history that an employer went to jail for back-wage violations. Now, after he got out, he claimed he was bankrupt. The workers still haven't gotten paid.

Mr. Scott. But if the manufacturer had been liable, they wouldn't have had to chase anyone. They would know who the work was being done for.

Mr. Kwong. That would be a very effective way because the workers do know where these pieces come from. Every piece that the workers work on they know where and who they are producing for. Yes.

Mr. Scott. Thank you.

Mr. Schaffer. Thank you, Mr. Chairman. You mentioned in your testimony, Mr. Kwong, about blacklisting – never again being hired by any other contractor in the Chinese community. Could you elaborate on that a little bit more? How effective is the blacklisting in the Chinese community?

Mr. Kwong. The blacklist has to be understood from a larger context of the Chinese community. Here we're talking about the non-intervention of law enforcement. We're talking about, you know, sensational stories about gangs and murders – something that outside journalists love to talk about. But, what is actually happening is that these same gangsters create the conditions in sewing shops. The gangsters not only get involved in all kinds of criminal activities, they are behaving as impostors who are the employers. Repeatedly every time there is a labor problem, the first thing that employers do is to have gangsters threaten you. Workers will come again and again and will testify to this fact. I personally have been subject to these threats.

But the point here is, I don't work in Chinatown. My paycheck does not come from Chinatown. I speak English. I work outside. My life is not depending on that community. But if I didn’t speak English and I had only minimal skills I would be blacklisted. It's an effective tactic.

Mr. Schaffer. You mentioned these gangs or some kind of organized crime. Mr. Fitch earlier mentioned the possibility of there being some relationship between campaign contributions and Department of Labor enforcement practices. Is there any similar kind of relationship? Is there a possibility that one exists with respect to these gangs and crime, organized crime activities, and the aggressiveness of the Department of Labor or lack of it?

Mr. Fitch. I will respond. The Racketeering Division of the Department of Labor in New York has been aggressive in attempting to rule out corruption among business agents and managers of the UNITE locals over the past four or five years, and has earned a reputation as being a source of great integrity. For example, the Racketeering Division organized a STING of Local 10 in 1993. They set up a State garment shop in the garment industry in midtown called Braincutting Incorporated. Every single official of Local 10 came by to pickup a bribe from this Racketeering Division STING operation. They were all seeking to evade the contract in the behalf of the manufacturers. Their actions were all caught on videotape. They were all prosecuted and put away.

Similarly, there was another investigation that identified business agents of Local 23-25 as being guilty of also taking bribes from the contractors. A larger investigation is still ongoing into Local 23-25.

Mr. Schaffer. Is UNITE part of the blacklisting operation, in your opinions, either one of you?

Mr. Fitch. Workers that I have spoken to, who've complained about conditions on the shop floor to their business agents, have found that shortly after this report, the employer would tap them on the shoulder and ask them why they didn't like working there anymore. They would get their check and they would be gone.

Mr. Schaffer. So the answer is yes or no? Yes, in your opinion?

Mr. Fitch. Yes.

Mr. Schaffer. Mr. Kwong, do you have any opinions as to that?

Mr. Kwong. Nothing more.

Mr. Schaffer. Thank you, Mr. Chairman.

Mrs. Mink. Mr. Chairman, I would like to request regular order that our members may have their first turn in asking questions before the majority takes their second turn.

Chairman Hoekstra. Mr. Ford.

Mr. Ford. Thank you, Mr. Chairman. I'm outraged also by all of the things that I've heard today and I appreciate the witnesses coming forward today. I'm really new to some of these issues and I appreciate the enlightenment that you've provided.

I'm just fascinated to an extent, Mr. Fitch, at some of your comments. I am just curious in terms of the bases for some of the really outlandish comments that you've made today in terms of the conspiracy that – and the collusion that you think might be taking place. I wish the Liberal party were as powerful as you have suggested. Perhaps Democrats would still be the majority here in the Congress. But I would remind you that both Governor Pataki and Mayor Guliani, I think, would be offended if they knew that you were here today referring to them as part of this liberal conspiracy or liberal hierarchy. And they, may in fact, might be perpetuating all of the horrible things that have happened to some of these workers.

Could we be specific for one moment? What really conforms the basis or constitutes the basis for some of the things you've talked about? I appreciate my colleagues on the other side, their outrage although they have voted consistently to cut enforcement dollars for all of these areas that perhaps could have prevented some of what has been talked about. But just the bases for what you believe the Department of Labor and others who have played this massive and pernicious role in helping to bring about some of the conditions or perpetuating some of the conditions that exist in these factories.

Mr. Fitch. Congressman, you're asking me to focus not particularly on business agents who have been convicted and sent to jail for taking bribes but on the Labor Department and the nexus between the Labor Department and the non-enforcement of the conditions?

Mr. Ford. Correct.

Mr. Fitch. Well –

Mr. Ford. Now let me be clear. The criminal convictions – this is not – I'm not traveling down that path, Mr. Fitch. You've made several allegations and points that I think are valid. But I'm just curious, some of them are fascinating and outrageous and I'm just--perhaps it's just me. But maybe you can perhaps clarify some of those things for me and I would imagine other members of the committee, as well.

Mr. Fitch. Well, wouldn't you be curious Congressman why an agency which has a report that identifies union sweatshops as the principal problem in the City, that is, that more union sweatshops are designated by the unions own standard of sweatshops, than non-union shops, and yet this information never reaches the public. In my interviews with officials, it was very difficult to get them to give me the information. They tended to back away from their own facts that had been gathered by their investigators. When I talked to officials higher up in the hierarchy, it se