Serial No. 105-89


Printed for the use of the Committee on Education

and the Workforce



Table of Contents













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.


See Appendix A for written statement of the Honorable Pete Hoekstra



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.




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.



See Appendix B for the written opening statement of Chairman Goodling



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.




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?





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.



See Appendix C for the written statement of Professor Peter Kwong




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.



See Appendix D for the written statement of Robert Fitch


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.



See Appendix E for List of Cost Component Sewing (Written in Chinese)



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--




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.




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?


See Appendix F for Time Sheets of a Typical Garment Worker in New York City


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 seemed –



Mr. Ford. You are a reporter, right, Mr. Fitch? You are not a government agent or a lawyer or prosecutor or any of those things right?



Mr. Fitch. No, no.



Mr. Ford. They were hesitant to give you information?



Mr. Fitch. I asked them under the Freedom of Information Act.



Mr. Ford. Okay.



Mr. Fitch. I was struck both by their reluctance to provide this information which they gathered, and by their willingness to back away from the results of their own investigation. This suggests that perhaps the contractors had been lying about their non-union status.



Mr. Ford. You see a link between campaign contributions in this?



Mr. Fitch. What I suggested, Congressman was that this is a hypothesis I would like to explore.



Mr. Ford. That's consistent with the one we've been exploring here. But I was just curious as to – I mean, I would agree with you. Again, that is behavior that is intolerable and unacceptable, but I'm just –


Mr. Fitch. What we have is a situation in which most of the shops that the Department is supposed to be regulating are nowhere close to being up to any civilized standard… or any American standard, for that matter. And yet, the agency is unable to even give the public awareness of what's going on although they have the information.



Mr. Ford. Thank you. Mr. Kwong, you mentioned in some of the things that you talked about are very consistent with the bill I'm a co-sponsor of. I thank my chairman and leader, Mr. Clay –



Mr. Kwong. Yes.



Mr. Ford. – For his leadership. You talk about manufacturers. Would you just briefly again sort of highlight the key points in terms of the manufacturers' role in helping to correct and cure some of these problems?



Mr. Kwong. Manufacturers are basically the ones who decide to let a contract, to which factory owners, and how much to pay for the job that's going to be done. So, they certainly are in a controlling position to make sure that they pick a contractor that does not have a bad reputation.


Secondly, regarding the amount of money they pay – they ought to know that it is an offer below minimum wage to the workers. Now, so, that's the relationship. I just want to use this opportunity to say more. I have emphasized the role of the manufacturer's responsibility, but I think other parties, too, know about this situation. They go along with it. They're silent about it. So it is almost like a conspiracy. If anyone cared to go down Chinatown, they would see these kinds of conditions. Something is wrong there. It's not just a manufacturer alone, alright. So, all the parties are involved in some kind – very sad kind – of conspiracy. The victims are immigrants. They are people who are willing to work hard and who are not even complaining for this kind of hardship. Yet, even after that, the owners withhold wages. Not everyone, and not all the contractors are, you know, making money, good money, but a lot of them do make money.


If you talk to a lot of workers, they say their owners have all kind of businesses and wealth. So it's a conspiracy of silence and that's what I'm hoping we could break into. On top of it, I still think that manufacturers ultimately have the critical position to make a difference.



Mr. Ford. Mr. Chairman, I just want to thank Mr. Fitch and certainly thank Mr. Kwong and suggest that I'm certainly not trying to absolve anyone of any responsibility. I was just fascinated by some of the things that Mr. Fitch said. It wasn't meant, at all, to be critical of you or the Village Voice, Mr. Fitch. I thank the Chairman for letting me go over my time.



Chairman Hoekstra. Thank you. Mr. Clay.



Mr. Clay. Thank you, Mr. Chairman. I have a question for Mr. Fitch. In the chairman of the full committee's opening statement, Mr. Goodling, he talked about the horrendous conditions that exists in these sweatshops. He talked about the workers living in fear for their lives. You've seen these conditions haven't you?



Mr. Fitch. Yes, sir.



Mr. Clay. On more than one occasion?



Mr. Fitch. Yes, sir.



Mr. Clay. Say numerous occasions you've been in a number of the shops?



Mr. Fitch. I've been in a couple.



Mr. Clay. During conversations with the chairman during this past week, he revealed to me – he didn't say –



Chairman Hoekstra. Excuse me, Mr. Clay. Mr. Fitch, can you move the microphone a little closer? The stenographer is having difficulty.



Mr. Clay. During conversations with Chairman Goodling during this past week, he didn't say it for the record today, but he revealed to me how those members of Congress that went up to see these plants last week wore flak jackets, were accompanied by the FBI and other police – went into kind of a seminar to tell them what would happen under conditions if they were attacked. Have you ever been accompanied by FBI and police going in and out of these plants?



Mr. Fitch. No, sir.



Mr. Clay. Have you ever feared for your life going in and out of these plants?



Mr. Fitch. No, sir.



Mr. Clay. So do you have any reason to believe why the chairman would fear for his life and other Republicans would fear for their lives when Patsy Mink and the Democrats went in without flak jackets and FBI escort and police escort?



Mr. Fitch. You know, sir, we did vote 85 percent Democrat in our last presidential election.



Mr. Clay. Well, what did that have to do with FBI escort?




No, I just wanted to clear the record in terms of that area because I noticed you've been very pointed and very candid in your testimony today.



Mr. Fitch. Thank you, sir.



Mr. Clay. So I want to commend you for being so courageous and so brave knowing that the chairman's life was at stake. Thank you. Mr. Kwong, I want to follow-up on the question that Mr. Ford asked of you in terms of accountability for the manufacturers. That's precisely what the bill that I introduced in the last session and again in this session of Congress about the sweatshops – to stop the sweatshops – is about its accountability for the manufacturers. Right now, as I see it, there's no real penalty for those who are providing or doing these kinds of horrendous things in terms of denying the minimum wage, working them overtime without pay, et cetera. Would you recommend that we pass something similar to H.R. 23?



Mr. Kwong. I don't know the full details of the bill, but certainly, manufacturer accountability is something I would definitely push. Furthermore, I would say I would not want a bill passed based on voluntary compliance. I think a bill must something very straightforward. There is absolutely no reasons when we go around the world talking about human rights violations there, human rights violation somewhere else when we are faced with violations right here in the United States. The kind of blacklisting, the kinds of vulnerability that people are subject under, these people are not enjoying American democracy. Aside from all the hardship, the entire slave-like labor, there's just absolutely no excuse. I would agree with you if a bill like this would pass, that would be very important part of the bigger picture. I would still insist that there are other component parts that need to be taken into consideration.



Mr. Clay. I certainly agree. Of course, one of the component parts is relative to the timesheet that you provided for us. One provides civil monetary penalties for contractors who fail to keep the required payroll records or submit fraudulent ones. Several other points, one is a civil liability provision that provides that a garment manufacturer, including a retailer, who is acting a manufacturer is civilly liable for its violations of the minimum wage and the overtime, child labor, et cetera. So I think your suggestions as to getting to the heart of the problem coincide with precisely what's in the sweatshop bill. I certainly thank both of you for your testimony. Thank you, Mr. Chairman.



Chairman Hoekstra. I thank the ranking member. I could tell you how we left New York but you'd probably just build it into your next story.



Mr. Clay. Were you in a tank?



Chairman Hoekstra. What's that?



Mr. Clay. Did you leave in tank or – ?





Chairman Hoekstra. A stealth tank.




It's the new thing with the military spending. It's a stealth tank. You can't see it. You can hear it, but you can't see it. We gave it a test drive. Mr. Owens.



Mr. Owens. During the past two years, there have been several lightening visits and rage and exposes of the sweatshops in New York. My colleague, Nydia Velazquez, who represents some of that area, has participated in quite a number of them. Both of you have observed this over a period of time, especially you, Professor Kwong. You said that things have gotten worse.



Mr. Kwong. Yes.



Mr. Owens. Does it have anything to do with the fact that the City and the State both have a role in policing this situation – the Health Department, the Buildings Department, violations, et cetera? All those departments and all those City employees have been cutback drastically, so they've just given up any monitoring or any enforcement at that level – before you get to the Department of Labor down here--which also suffered some serious cutbacks in staff. Has that deterioration taken place sharply in the last four years?



Mr. Kwong. There are a lot of factors contributing to this deterioration. Part of it is that the attitude; that there's nothing that can be done. Everybody's pushing the buck to somebody else. Unions explain away their problems the way manufacturers do. Everybody is doing that. I think one of the problems that I alluded to at the very end is these kind of conditions, encouraging employers to offer low wages, more exploitative conditions, is also fueling illegal immigration into this country. And this is a very, very important factor, because now you are talking about a fresh pool of labor; cheap, very, very vulnerable labor coming in, and they are given the kind of a situation to be exploited. So that's why –



Mr. Owens. But it's illegal to hire people who are undocumented, and that is a Federal responsibility. INS has that role and the employers have – there are some tremendous sanctions and some tremendous fines that are levied if it happens more than once and if large numbers of people are involved.


So we have at every level, we have a Republican mayor, a Republican governor, and a Republican Congress that has certainly been very much interested in immigration, illegal immigration. But they have cut back on the apparatus used to enforce all this. The INS has suffered greatly in terms of reductions and increased responsibilities and less staff.


The Department of Labor has been cut drastically. At every level, you have the people responsible for this being crippled by Republican administrations.



Mr. Kwong. I'd like to reemphasize the point I made earlier. The question is not how many people you have to enforce the law. The question is whether the victims will come forward to cooperate with the law.


Now, there is no problem in the United States that can be solved purely by government.



Mr. Owens. If victims don't think that there's going to be any personnel around to handle their complaints, then they don't come forward.



Mr. Kwong. No, the victims found through their experience that they are being ignored or being taken care of very passively, and in doing so, causing them to risk their own jobs. So, why should they come forward?



Mr. Owens. In other words, the apparatus of government they see as corrupt. The government is not going to protect them. The apparatus is not there.



Mr. Kwong. Corrupt, passive not determined to solve their problems. Now you could have 10 times more law enforcement and if the attitude were the same, nothing would change.



Mr. Owens. The charge was made here by somebody that you are dealing with the world's richest union and the highest administrative expenses. Was that you, Mr. Fitch?



Mr. Fitch. Yes, sir.



Mr. Owens. Do you want to explain how you arrive at those observations, those conclusions? America's richest union and highest administrative expenses.



Mr. Fitch. Yes. There is a book that was recently published by a professor of labor studies, Mason Merrick. He did a disaggregated study of the 28 largest unions in America. His figures are from 1979 to 1993. One of his measures was assets per member. By that measure, Unite is the richest union per capita of any of those 28 major unions. It also has the most administrative expenses.



Mr. Owens. Assets being what, the salaries paid the to the –



Mr. Fitch. I'm sorry?



Mr. Owens. Assets means some property that they own.



Mr. Fitch. It would include non-marketable securities. Excuse me, it would include marketable securities.



Mr. Owens. Not salaries of the executives.



Mr. Fitch. No, no. No, sir. However, the administrative expenses for UNITE are also number one in this study of the 28 major unions.



Mr. Owens. My time is almost up. Did you investigate any connections between the owners of these sweatshops and government, city hall, State government? Any connection between the owners who get away with this and government? Did you investigate that?



Mr. Fitch. One investigative lead that I would like to pursue is the collaboration of the union and the Department of Labor in the backpay issue. Because workers told me and gave me documents purporting to show that the Department of Labor, at the behest of the union, forced them to sign what they thought was a receipt, but was actually a release for backpay which they signed.



Mr. Owens. And the owners are not involved in this at all. You are not interested in –



Mr. Fitch. Yes, they are. Yes, they are. The owners were involved in that their obligations to the workers, who they hadn't paid, were vastly discounted as a result of this joint union-Department of Labor meeting that took place in December.



Mr. Owens. Any pattern of ownership? Did you find certain people who own these places are connected to real estate interests or conglomerates? No patterns in the ownership of the sweatshops? You mentioned Kathy Lee and a few other brand-name people who contract.



Mr. Fitch. Yes, but Kathy Lee is just a creature of the Kellwood Corporation that markets various celebrity names to the big department stores like Wal-Mart.



Mr. Owens. Thank you.



Chairman .Hoekstra. I almost used my gavel and now it's almost Mr. Miller's turn. Welcome, Mr. Miller and Mr. Owens, for joining us today.



Mr. Miller. Thank you, Mr. Chairman, and thank you for having this hearing. Let me just ask a couple questions here.


Mr. Fitch, your testimony is interesting from a historical perspective, and I guess from the premise that you put forth. But it doesn't explain the nationwide problem of sweatshops. You can't lay this all on the local in New York or the union movement in New York or what-have-you, because it doesn't explain the situation. It doesn't explain the situation in Los Angeles or in suburban California or in the Bay Area or in Seattle or in Chicago or Houston or Miami. It doesn't explain the problem in Salvador or the Northern Marianas or in Indonesia or Malaysia.


But the interesting thing about all of those areas is it's all the same manufacturers. It's all the same designer houses, it's all the same designer labels, it's all the same people that everybody in this room is wearing their clothes.


It's the same manufacturer that – let me finish and then you can respond – it's the same manufacturer that wanders around the world in search of lower cost of production. And because we have a limited quota system, a certain amount of those goods are going to be made in the United States.


And the same process by which they wander around the Northern Pacific, or they wander around Indonesia or Malaysia or China, they wander around this country. And they know exactly what they are doing. They know exactly when they buy into a contractor what that contractor's history is, what his criminal record is, what his civil violations records is, what his OSHA record.


And they also know that even if they get themselves a good contractor, that contractor has access to subcontractors that has access to subcontractors. Some people only do sleeves, some people only do collars. And everybody in the trade knows it, including the union. They know it, too.


But to lay this off on the suggestion that somebody is giving money in New York or the national level or whatever, that that explains the situation. It doesn't. But there's one demand for this labor. And it comes from a group of manufacturers that are the big names in international fashion.


And it seems to me at some point – I find it interesting, you know, in California, we passed a law to try to hold these people responsible, and Governor Wilson vetoed it. You have an extensively nonunion operation in Southern California and you have the same problem. Why? Because these people are given work by people who know that they're working in violation of the law and they do it with plausible denial, because they set up a series of contractors, subcontractors and middle people so that you won't get to them.


I mean, they make cocaine dealers look like just good ordinary businessmen, because it's the same process. They are looking for insulation; they are looking for insulation. Kathy Lee got blindsided, not of her doing.


But you know Wal-Mart knew exactly what they were doing. They are people that contract out her label know exactly what they were doing in those things. She may not have known; they knew exactly. And that's where they go looking for price. And in five years when the quotas come off, it probably won't be a problem in the United States because most of this work will probably be done in China.


So I think your answer here, your suggestion that this is due to corrupt union, that's worth exploring. But I think you are making a bad mistake to suggest that this avarice and greed can be laid off on that explanation. And you know we do have some fairly effective tools, but we are clearly outmatched.



Mr. Kwong, I'm not sure I fully agree that if you just have more enforcement, because we know where you go and you invoke seizure, and you start seizing the product made in this fashion, you start to get some serious ramifications backward from those kinds of seizures.


One of you in your articles mentioned that these are indentured servants, servitude, and there are prohibitions on commerce with indentured servants. So these tools are there, but I have to tell you that these cuts that this agency has suffered are not benign. They do have an impact in terms of trying to spot these places, because as you know from your history, these can grow up overnight. People reinvent themselves, take out new papers, call themselves a new name and they move across the street or down the block.



Mr. Fitch. Congressman, I appreciate your analysis. In economics, there are two types of analysis that the profession engages in. One is a static analysis, which is an analysis at a particular point in time when the factors of production can be adjusted, and the other is a dynamic analysis, which looks at longer historical periods in order to understand the movement of factor prices.


I would like to suggest that while your analysis is very accurate in static terms, in dynamic terms, we have to ask how is it possible for workers to ever raise wages above the terrible level of the early part of this century? How is it possible for them to eliminate the sweat shop? How is it possible for them to abolish the subcontracting system? I would suggest –



Mr. Miller. You've got to stop letting people live as parasites, live off that labor. But that's a decision that has not been made in this nation, because everybody who buys these goods knows exactly what's going on.


They've obviously decided to save $15 dollars or $20. Well, it's never about the retail price, because the cost of production has nothing to do with the retail price. But people have decided to continue. This isn't a static analysis. It’s a very dynamic analysis.


I just came from the Northern Marianas, where you have the same situation and you have none of the situation you are talking about, except you have people deciding out of corruption that they are going to enable this industry to continue.



Mr. Fitch. Congressman –



Chairman Hoekstra. The gentleman's time has expired. And I think we want to thank the two of you for your testimony. Mr. Fitch, your entire testimony will be submitted for the record.


We need to move on. I think, as both of you know, we have a group of workers on the other side of those screens that we would really like to move to. So thank you both very much for participating in helping us today. Thank you.


We have six workers who are going to testify and they are going to have to be translated. So we will begin with worker number one.




[Worker No. 1 speaks via a translator.]


Worker No. 1. I came to the United States in 1982. I have worked continuously in garment factories for 18 years. When I first arrived to New York, I worked in Chinatown's union shops.



Mrs. Mink. The interpreter, Mr. Chairman.



Chairman Hoekstra. Excuse me?



Mrs. Mink. The interpreter should be visible. The witnesses can be behind the screen, but we need to see the interpreter.



Chairman Hoekstra. I believe the interpreter has indicated it is easier for him if he can be in contact, in visual contact, if he has some fusion with the witnesses. We will let you see the interpreter when he is done, is that all right?



Mrs. Mink. All right.



Chairman Hoekstra. Okay, you can proceed.



Worker No. 1. When I first arrived to New York, I worked in Chinatown's union shops. I worked from 9 o'clock in the morning until 7 o'clock in the evening. I worked six days a week. Basically, I earned from $180 to $200 per week, and basically, I made only $3.70 per hour. Because the union shops pay me too low and I can't afford to support my family, that's why I switched to nonunion common shop at 33rd Street in Queensboro Plaza as hem sewer.


I worked seven days a week, and every day I started to work from 9 a.m., and most of the time I had to work until 11 p.m. at night. And frequently, I had to work until 1 or 2 a.m. This way, my weekly earning was about $450. Every day, basically, I have to work 14 hours. So in average, I can make, like, $4.50 per hour.


And at that time, the factory was located in the basement. There's no windows and the air was filthy. And because the fabrics gave off a heavy chemical odor – originally my health condition was very good – but after working at that shop for one year, I developed severe allergies and asthma.


Since I had to support my family and pay for my children's education, I could only seek medical treatment while I continued to work. And my illness was not cured and was getting worse and worse.


In 1991, I went back to China to seek medical treatment. After I recovered, I returned to the shop to work. However, each one of these shops is the same situation, that is, filthy air conditions. And that's why my health problems are getting worse again. And because I don't know English, even though I am living in the United States, I can only work in a garment shop.


That's why until now I have to work while seeking medical treatment at the same time. And the doctor agreed that my illness is already in a serious stage. And the doctor already prescribed the maximum amount of dosage in order to control my health problem. I was told that I can never be able to recover to live as a normal person. And indeed, my heart is broken, because I have to make a living and I damaged my health.


My situation is not an individual case. There are lots of people like me in other garment shops, even though they may not be as serious as mine. I hope that Congress would care about the environment in the garment shops. My health condition is absolutely derived from the working conditions in the garment shops.


During 1990, I changed jobs to another nonunion shop in Brooklyn. In that shop, I had to work 365 days in the year. I worked at least 12 hours a day. Many times I had to work 12 hours or even 16 hours a day, even 20 hours a day. I received no holiday pay, no medical insurance, no sick days, and at that time, I had my wrist injured because of work and I can't recover even until now. I still consistently have pain. And also, I have back wages up to six to seven weeks.


When I stopped working there, I had to wait up to a half year in order to recover the back wages. I still have some wages dating back to November of 1995, and part of the back wages from that time I still cannot get it back yet.


Because the owner of the shop owed me back wages, so I changed to work in a shop in 64th Street. In that shop, at least two to three days every week I had to work until 2 or 3 a.m. in the morning. And regularly, the boss asked me to work from 7 a.m. in the morning until like, 11 p.m. at night.


Working long hours and in conditions like this year after year, that has caused my whole body to develop injuries and pain. My left wrist, because of overwork, has been injured. I cannot do any heavy labor and whenever the weather changed, my wrist would hurt. And also, I have inflammation and pain in my left shoulder blade, and because of this, my lower back and the nerves in the left side also cause me a lot of pain.


I still have pains in the hip area and in both sides of my hips. In my daily life, I cannot sit properly as normal, otherwise my leg would have pain. Every day I have to take Tylenol in order to cure the pain. That's why I hope the Congress would help and assist workers like me who have suffered injuries acquired through long hours of work.



Chairman .Hoekstra. Thank you very much. We are going to need to take a break now. We have got two votes on the floor, and when we are done with the second vote we will start again when the votes are done.


See Appendix G for Written Statement of Worker No. 1





Chairman .Hoekstra. The subcommittee will come to order, and we will hear from Worker #2.




[Worker No.2 speaks via a translator]


Worker No. 2. I worked at a factory at 446 Broadway in Manhattan, Chinatown for over two years. Although the factory is unionized shop, my work hours were extremely long because each day the boss rushed us to finish and ship out the garment orders. She said that if the clothing didn't get finished, that manufacturer won't pay, then we would not get paid.


On the average, I worked 90 hours a week, 7 days a week. I recorded my work hours in my notebook. At the beginning, my wage was $4.50 per hour. In 1996, my boss paid me $350 a week. But I have no overtime pay, no matter if I worked 80 hours or 100 hours, my wage remained the same.


One time I worked from 9 a.m. in the morning to 12 midnight. Because my wife was sick at home, I was very worried. Without finishing my work, I went home to take care of my wife. But I have to rush back to work the very next day early in the morning. When the boss saw that I had not finished my work, she pointed me and scolded me, "Why didn't you work the full 24 hours for me?" I was really hurt. Working for 24 hours a day, that is slavery, even worse than slavery.


According to my calculation in my records, in six months, I worked nonstop 24 hours for 34 times. I am not just an individual case in Chinatown. Many workers in many other garment shops have the same case. I hope that the government pays attention to this problem, and pass laws to stop garment factories from operating this way.


Last year my boss didn't pay us. She closed down the factory and ran off. She owed me 16 weeks of unpaid wages. This amounts to more than $5,000. If I add overtime pay to my back wages, my boss owes me almost $10,000 for six months of work.


As of right now, the Labor Department only recovered $1,525 for me from the manufacturer. I demand to get back my minimum wage and overtime pay for the last two years. I already gave all my daily records of my work hours to the Labor Department. And the Labor Department's official said that my records are not that useful, because the law only allows them to ask the manufacturer for three months of back wages.


But the Labor Department, along with the union, both told me that if the boss close the factory, then they cannot help us to pursue the boss for our back wages. If they existing law is really like this, it is no wonder why there are a lot of bosses in Chinatown who do not pay workers and want to close down and run away.


I hope that the Congress will change the law. The Congress should not let retailers and manufacturers sell garments made by us before our wages have been paid in full, and should not make people buy hot goods unknowingly.


We do not know when we will get paid. If every boss can run off without paying our wages, then us workers will all starve to death.



See Appendix H for the Written Statement of Worker No. 2


See Appendix I for Wage and Hour Record of Worker No. 2



Chairman Hoekstra. Thank you.





[Worker No. 3 speaks via a translator.]



Worker No. 3. I came to the United States in 1983. I have been working at union factory. At that time the work hours were better, the wages were higher. We rarely had to work on Saturdays and Sundays. At that time, each garment I sewed was about $1.67, and each hour, I could sew three pieces of garments.


But later on, the piece rate dropped every year. In 1989, the piece rate was down to $.58. And under these conditions, the low piece rate and bosses running us to finish and ship orders, I was forced to work long hours. Usually, I started working at 7:40 a.m. and got off work after 8 p.m. And if I show up at work late or leave early, then the boss will be very unhappy and will scream at me.


Under these conditions I continued to work until the end of 1991. Then I got exhausted and I hurt my health. I can't continue to work in this way. So I was told to leave by the boss. I had to rest for six months.


But in order to keep my Blue Cross Blue Shield insurance, I was forced to go back to work in the shop. I worked at a garment shop at 161 Branch Street. Every day I worked from 9 a.m. to 7 p.m. My weekly wage was even less than about $120, which did not allow me to meet the requirements set by the union to qualify for the Blue Cross Blue Shield medical insurance, and I have to put up some cash to buy checks from the boss to maintain my medical insurance.


Later on because the boss noticed that even the workers work so hard and couldn't make lots of money, the boss changed another trick. For example, the basic requirement of getting the medical insurance from the union is a weekly income of $175 or more. If the actual income is only $120, then the boss will still give you a weekly paycheck of $175, but you must give the boss $55 in cash. That is the way I can get my paycheck.


Later on because this kind of work made me exhausted, so I changed to work in another shop on Howard Street. The boss told me that the wages are calculated by piece rate, but the paychecks will state an hourly rate, hourly wage of $5.00 per hour. In fact, all the workers, including me in the same factory, cannot make the same income as the minimum wage.


And I was told, along with the other workers, I was told to bring cash into the office of the boss in order to pick up the paycheck. And I asked him why and he said, it's all because of the manufacturers.


Later on because my health is getting worse and every time I have to bring cash in order to take my paycheck and I have no more money to pay for that. And then the boss changed these tactics again. If you actually work 40 hours per week, then the recorder in the paycheck only recorded 11 hours of work on the check. And also in order to avoid the obligation of meeting the minimum wage, I was told to get my paycheck once in two weeks.


In February of this year, the boss became worse. The boss says in the near future there will be people coming in to inspect and to check in the shop. We were asked to go to work at 8 o'clock in the morning, and since I can't do it this way, he told me to leave. And I can say nowadays, most of the workers in the garment shops had to pay cash in exchange for their paycheck.


It is only because of the low wages that disqualified most of us for the medical insurance, because of the requirement laid down by the union. And my case is a typical case. And according to what I know and the people that I know, most other factories are just as evil and unjust.


I really appreciate that the Congress would give me this chance to express the pain and suffering that the garment workers have. I appreciate it very much. Thank you.



Chairman .Hoekstra. Thank you.



See Appendix J for Written Statement of Worker No. 3



Chairman Hoekstra. Worker number four.





[Worker No. 4 speaks via a translator.]



Worker No. 4. Ladies and gentlemen, I am from New York. I have worked as a garment worker for 10 years. I used to work at a union shop located at 446 Broadway for over a year and each week I earned about $200 to $300. I worked 10 to 11 hours every day and seven days a week.


Often, I had to work two to three months before I can take a day off. Every day the boss in the shop rushed us to finish the garments and ship out the orders. And last year from the end of August to the end of October, we sewed garments for television star Kathy Lee. During that time, the boss didn't pay us.


This is what happened. One worker was not satisfied with the boss for not paying him wages, so he filed a complaint with the union. But the union called the Labor Department and that caused the Labor Department to come to check the factory. But they didn't dig deep into the matter and did not collect information from all the workers about their unpaid wages.


They only demanded that the boss pay us a small portion of our wages. Then we were told to sign a document in front of the boss and a union representative, but we were not explained for the contents of the document. And later on, we found that the document stated that we were to waive our rights to pursue our back wages.


We do not really know what happened between--what kind of arrangement was made between the manufacturer and the factory boss. The boss demanded us to finish the garment for the manufacturer, then the boss closed down the factory. Right now I only got back one-third of the back wages and I am still owed $1,919. This amount does not include the minimum wage violations.


Two weeks ago I went to a company, what is it called Wal-Mart. And I saw that the garments that we sewed was on sale. And how can the manufacturer, the television star Kathy Lee, and the Wal-Mart sell and make money from garments that we sold, but do not have to pay us. And my family and I have to eat and to pay rent. I have to support three children. Life has been very difficult.


I hope the Government passes laws to enforce the labor laws strictly. And the Government should also pass laws to make manufacturers take responsibility for the labor law violation of the garment bosses because the garment bosses always steal all our wages and then close the factory and run off.


In fact, we're the ones who produce the garments for the manufacturers and the retailers. They are the real big boss for the garment workers. We feel that the manufacturers should not take their work to other factories and countries. Congress has to pass a law and to require the manufacturers and retailers to give their orders to non-sweatshops, factories that are not in violation of the law.



Chairman Hoekstra. Thank you. Witness Number 5.



See Appendix K for the Written Statement of Worker No.4




[Worker No. 5 speaks via a translator.]


Worker No. 5. I live in New York. During May 1993 I was a presser at a garment factory at 39 E. Broadway, 5th floor, in Manhattan's Chinatown. That is a unionized shop.


I worked there from 9 a.m. in the morning to after 8 p.m., seven days a week. The more terrible thing is, the boss of the factory owes us wages. The factory owes me more than $8,000 in back wages. One of our workers, the back wages was over $10,000 until there are workers who filed complaints with the Labor Department.


But then the boss issued bounced check and sent to the Federal Labor Department and I don't understand why the Department of Labor would send this bounced check to the workers who are the victims.


But the Labor Department says they have no choice. So we have to retain our own attorneys, that's why the workers have to get help from the Asian-American Legal Defense and Education Fund. So now the boss has changed his factory name and he continues to owe workers wages.


Recently, in 1997, around October, I went to work in a nonunion shop and worked only five months. Just for this period of time, the boss owed me $1,800 in back wages because I got a lesson from my first experience, and I pursued the boss, and after several attempts, the boss secretly pay me the back wages but until now not the other workers.



Chairman Hoekstra. Thank you. Witness No. 6.



The Interpreter. He hasn't finished yet, he indicated.



Chairman Hoekstra. All right.



The Interpreter. Do you want him to continue?



Chairman Hoekstra. Yes. Let him go ahead.



Worker No. 5. I want to explain why I got the $1,800 back. It's because I brought a complaint to the Chinese Staff Workers Association. Because of this situation, then the boss pay me back the money.


At the present time, all the garment industry in the Chinese community have the similar problem. I hope that the Government can crack down and to enforce the labor law and crack down on these sweat shops in order to assure the legal rights of all the workers.



Chairman Hoekstra. Thank you. Witness No. 6.



See Appendix L for the Written Statement of Worker No. 5





[Worker No. 6 speaks via a translator.]



Worker No. 6. I came to the States in 1989. I worked for eight hours, for eight years, all the time I worked in a Brooklyn place as a garment worker. I earn about $400 per week, but I have to work 13-14 hours, against long hours of work my health is getting worse.


In July of 1997, my hands started to have problems. Along with more work, then my hands problem getting worse. Because I have to support a few kids at home, that's why, it's difficult for me, I either have to work, but still have difficulty coming in to work.


I would ask help from the Government to help protect the pay of the workers to resolve the problem of making enough money to support the family, to help the workers to resolve the problems with the benefits because we don't have holiday wages, we don't have medical insurance.


I would like the Government to pass law to limit the work hours. And, last, I would like the Government to consider about problems that the handicapped people have to face.



Chairman Hoekstra. Good. Thank you.



The Interpreter. I'm sorry, Chairman, they have something else to say.



Chairman Hoekstra. Okay.



Worker No. 6 Something said by Witness No. 5, because we have our testimony down in writing, I would like to present the written documents to the Congress.



Chairman Hoekstra. The written statements will be submitted for the record in its entirety.



See Appendix M for the Written Statement of Worker No. 6



Having met with a number of these workers, the things that you miss behind the screen is the emotion in their face and also an understanding of the real physical problems that they do have a result of the environmental conditions, the fibers that are in the air that they have breathed for a long period of time and also the injuries that they have because of the repetitive motion.


If you go into these shops and you watch them work, I mean, they work fast, but it is repetitive motion and they are doing this 10 or 12 hours a day. A number of these workers have very serious health problems, as a result of their working conditions. They described a process that I found quite unbelievable when we met with them, which is the process of actually going and buy your checks, which is a cash transfer. If you want your check, you give cash to the owner of the shop and then you will get your full paycheck. It's a way for the workers to maintain their health insurance, it's also a way for management, perhaps, to pay less than what the worker is entitled to and for the records to demonstrate that they are paying minimum wage or paying above minimum wage but in reality they are paying something significantly less.


I have just one question for some of the workers, if one or two of the workers want to respond. My question is why do these workers feel the need to testify anonymously? From where do they fear retribution?



Worker No.1. I've been testified in front of the State Assembly. After I testified, when I returned to work the next day, I got fired immediately. That's why a lot of shops afraid to hire me as a worker. I still need to survive in the United States. I still need a job. That's why this time I don't want to show my face.



Chairman Hoekstra. Mrs. Mink. Do you have any questions?



Mrs. Mink. No, I have no questions, except, Mr. Chairman, I regret that the minority did not have an opportunity to meet these witnesses as you did to talk to them personally, to hear their various experiences as they have been testifying to this afternoon.


I can understand their reluctance, perhaps, to testify in public, but it would seem to me that the minority should have that opportunity that you experienced in talking to them personally as well. Unless, is it the assumption of the majority that the minority cannot be trusted with the identity of these individuals? I feel very, very affronted by this process which did not include us, at least in the interview stage so we could have the benefit of an exchange with these individuals.


I can understand their concerns about retribution and being fired, but I am really quite affronted that we could not be included in the personal interviews that you had with these individuals. The minority is certainly aware of the pressures and the concerns and the threats of intimidation at the contractor level, but I'm sure that all of the minority members would have respected their concerns and been very, very attentive to their identity and their concerns. So I'm sorry.


I have no questions. I have not had the opportunity to meet these individuals and I really can't contribute to this dialogue.



Chairman Hoekstra. Ms. Mink and I have decided that the business of the subcommittee is more pressing than a quorum call, so we will move to the last panel.


Well, I understand there a couple of workers that want to talk about the retribution. Is that correct? Yes? No?



The Interpreter. Yes, someone is ready to talk. They are trying to get a microphone.



Chairman Hoekstra. Okay.



The Interpreter. This is Witness No. 5.


Worker No. 5. I want to explain further the reason why I don't want to testify in public because I am afraid that my personal safety is a problem. That's all I want to say.



The Interpreter. And now, another witness wants to say something about this. And this is witness No. 6.



Worker No. 6. My last name is Chen. I have been receiving threats from the boss. I was warned that be careful with my kids.



Chairman Hoekstra. Thank you. Mrs. Mink, it's difficult on exactly how to handle it. I know that these workers, as we and the people that introduced us to these workers and I think some of these are actually the first time that I have heard their testimony, but they are very much afraid for their personal safety, their employment, and we'll have to take a look at how we handle that in the future.


I would like to thank all of the six witnesses for testifying and for being here today with us.



The Interpreter. Excuse me. Excuse me. Witness No.3 has something to say.



Worker No. 3. I am Witness No. 3. There was an occasion, but I get my paycheck and I was threatened by the boss and allowed that this type of threat and tried to make me not to report or complain the problem about the back wages.


But this is the fact and I believe the boss should understand. Even though I cannot testify in the public, this is only temporary.



Chairman Hoekstra. Good. Thank you.


The last panel that we have today is Mr. John Fraser who is the Acting Administrator of the Wage and House Division of the U.S. Department of Labor's Employment and Standards Administration.


Thank you for being with us all afternoon.





Mr. Fraser. Thank you, Mr. Chairman. Mr. Chairman let me start today by asking that you include our statement in the record.



Chairman Hoekstra. We will include the entire statement for the record.



Mr. Fraser. Thank you. And I will be brief, then sir.


I want to start by thanking you and Mrs. Mink for hearing from these workers today. I think it is very important that the Congress have the opportunity to hear directly from the people who experience what are often appalling conditions in this Nation's garment industry. It's important for you to hear their stories and hear the impact on their lives.


I would, if I may, say to you and to your witnesses that the Fair Labor Standards Act does contain provisions to prevent retaliation by employers for cooperation in these kinds of inquiries and investigations.


However, about the most we can do with that is go to court to get an injunction against an employer not to do it. So where people fear for their personal safety in cooperating in this kind of inquiry, it is very important that they be given every assurance that their personal safety is of paramount importance.


Mr. Chairman, I've heard, I have sat through most of the proceedings this afternoon, I've heard a lot of talk about the Department of Labor doing its job, or, I guess more often, not doing its job when it comes to obtaining compliance in the garment industry. I've heard a lot of talk this afternoon about the buck being passed between various agencies and various parties of interest.


I would like to start out by telling you that the Department of Labor, Secretary of Labor Herman is not interested in passing this buck. I am not interested in passing this buck. This our job. We are dedicated to doing it and doing it well and changing what has become an extremely problematic situation in this nation's garment industry.


We are delighted that your hearing today is calling attention to this situation, calling attention to the plight of these workers that you are hearing from. In the New York garment industry, only about 37 percent of garment contractors are in compliance with minimum wage and overtime requirements of the Fair Labor Standards Act. In Los Angeles it is about 39 percent.


This morning I was privileged to participate in a hearing before the Senate which focused on shameful conditions in the garment industry in our territory of the Commonwealth of the Northern Marianas. In the Northern Marianas, we have 20,000 indentured workers from rural China producing about $1 billion worth of garments that are imported duty free and outside of the quota system into the United States.


The garment-manufacturing problem is an international problem, but it is an acute and a chronic and long-term problem in the United States.


I think I can help inform the committee's deliberations today by telling you about what we know about this industry and, more importantly, what we're trying to do about it.


We started seeing serious problems developing in this industry in the late 1980's. We were chasing all kind of stories like you've been hearing today of violations involving workers in small shops and when we tried to intervene, all we'd do is chase that shop underground.


We would find an owner moving the equipment out, establishing a new location. We were having absolutely no influence on compliance.


Starting in about 1991, under former Secretary Martin, we established a, we started a process of developing a whole new approach to trying to get compliance in the garment industry. To focus less on chasing production contractors and more on other points of leverage in the industry, with manufacturers in particular.


That strategy has evolved into what has become a much more well thought out, much more well developed initiative that we have been pursuing for the last five years. We call it our no-sweat strategy and it is designed to deal with the composition of this industry and its workforce.


The garment industry in the United States employs about 800,000 workers. It has been declining for several years in the size of its work force. It is organized in a very hierarchical structure, with very few retailers at the top of the pyramid, about 1,000 garment manufacturers who design and actually are responsible for organizing the production of garments in the country.


And at the bottom of this pyramid are about 20,000 to 22,000 contract shops that sew, assemble, iron, bag, and ship these goods. But they rely on the labor of about 800,000 workers, most of whom are women, many of whom are new immigrants, and many of whom are only marginally connected to the economy, the larger economy as a whole.


We developed our no-sweat garment strategy to accomplish compliance, to make compliance improvements in this industry in an atmosphere where we have to do a lot more with less.


As someone alluded to earlier in the discussion during the first seven years of the decade, our Wage and Hour Division declined in size by about 20 percent. Just last year we received 200 new positions, as a part of our, in recognition of the initiative that we have put together to try to deal with the garment industry.


Let me talk a little bit about the components of that strategy and there are really four that all have to work together.


First is the enforcement component. As I said, for years we chased contractors, trying to get contractors into compliance, only to find them illusive and ephemeral. We've decided that it is, we are chasing our tail when we're chasing production contractors to try to get them into compliance because they so easily go out of business, reincorporate, move the machines, open up someplace else.


The only way to really get them to change their behavior and care about compliance with the law and the treatment of their workers is if we can push other buttons that mean something to them. Push buttons with their buyers. Push buttons with consumers. Push buttons with other agencies that influence their ability to go into and stay into business.


So we have changed our enforcement strategy which may account for some of the frustration you've heard in terms of individuals abilities to get complaints resolved. We've changed our enforcement strategy to try to deal systemically with the structural problems with this industry, to try to chase, trace goods that are produced in violation through the chain of commerce to manufacturers and bring manufacturers to the table to influence behavior of the suppliers, to structure their relationships with their suppliers, so their suppliers bid in a way that allows compliance with the law, so that their suppliers, or their buyers take steps to see that their suppliers are complying with the law through monitoring, through training, through other means.


We are using a provision of the FLSA called the hot good provision that make it illegal to ship in commerce goods produced in violation of the law to bring manufacturers and, recently, retailers to the table to try to get them to influence the compliance behavior of their production shops.


So, our enforcement strategy has shifted from a shop-by-shop, worker-by-worker approach to a more systemic approach, one that we think has an opportunity to deal with at the, in a systemic way the 22,000 shops that are more often violating the law than not.


The second aspect of our compliance program is an education aspect. Reaching out to employers, to manufacturers, to retailers, to their buyers, to their quality control inspectors, to make sure that they know what the obligations of compliance are, to get them information about compliance and get them information about tools they can use to influence the behavior of shop owners that you've been hearing about all through this hearing.


Third component of our enforcement strategy is a partnership component. This is a part of the strategy that is particularly important to Secretary Herman. Where we forge partnerships with manufacturers, with retailers, with consumer groups, with other interested parties. Other buying entities, other Federal Government entities buy garments, schools buy garments where they have uniforms, trying to work on partnerships with other entities who can influence behavior in this industry to encourage them to take steps that achieve this common goal of increasing compliance.


And the fourth component of our strategy is a recognition component, to try to recognize retailers, manufacturers, and other parties who are doing the right thing, who care about compliance, who care about the stories that you've heard from these workers, who care about the quality of their lives and are trying to do something constructive about it.


We have, some years ago, or months ago I should say, a trend setters list that tried to recognize companies that were taking responsible steps to encourage compliance and make the stories you have been hearing today less common.


We think we've had some success with this strategy. We're encouraged by it. We've seen a 20 percent increase in compliance in the Los Angeles garment industry between 1994 and 1996. Twenty percent increase in compliance in the San Francisco garment industry between 1995 and 1997.


We've just, as you heard several times today, last year completed a compliance survey in New York to where we found only 37 percent of shops in compliance. So we've got an awful long way to go. We have some pride in the fact that the strategy, that this program has shown success, that it's been recognized. Last year we won, this program, the garment program, won the Innovations in American Government Award from the Kennedy Center and the Ford Foundation.


We're proud that we've made a commitment through our GPRA Strategic Plan to bring this industry into compliance by the year 2002, and we're committed and Secretary Herman is committed to seeing that happen.


We do need help. Our strategy recognizes that we can't do this by ourselves. We have 900 investigators responsible for 6.5 million businesses, and 120,000 [sic] people in the work force in this country, so our strategy is designed to succeed by getting everybody who can exercise leverage in this industry to be doing the right thing, to get the same goal.


It's encouraging that the Congress would join that effort and give consideration to the plight of these 800,000 people whose stories are very much like the stories you've heard today.



Mr. Chairman, I am going to end there. I'm going to add two things, if I may, in reaction to things I'd heard earlier this afternoon.


First of all, I heard the suggestion that our enforcement program and our decision making about our enforcement activities might be influenced by campaign contributions. I regard our organization as a professional law enforcement organization and I can say categorically that that is not true. It is irresponsible to suggest that it's true, and I can tell you, Mr. Chairman, that if in any way I felt that I was being directed in connection with any campaign contributions, the first thing I would do is call our Inspector General and the second thing I'd do is call the FBI.


The second thing that I heard in earlier statements, Mr. Chairman, was a suggestion that we were hiding the ball, that we were suppressing information. And I thought it would be worthwhile to set the record straight today to ask you to consider for inclusion in the record this set of documents.


This is our press release announcing the results of our New York garment survey last October. This is a New York Times story that ran and covered that announcement. This is the New York Daily News story that ran and covered that announcement. Newsday story. The Associated Press story, El Diario La Prensa story, and several more. If we were hiding the ball with the results of our New York garment survey, and the fact, the appalling fact that less than 40 percent of garment manufacturers in that city were in compliance of the law, I don't think this paper would exist. So I would just ask, Mr. Chairman, to set the record straight, that these documents also be included in the record.


And with that, I'd be happy to answer any questions.



See Appendix N for the Written Statement of John Fraser



Chairman Hoekstra. Without objection, so ordered.



Appendix O – October 16, 1997 US Department of Labor Press Release

Appendix P – New York Times Article

Appendix Q – New York Daily News Article

Appendix R – Newsday Article

Appendix S – Newsday Article

Appendix T – Associated Press Article

Appendix U – El Diario La Prensa Article

Appendix V – 8 Articles from Various Media



Chairman Hoekstra. We'll review the documents and try to work through this process and identify exactly where the truth lies – where there is gray and where there is distinct black and white. From this understanding, we then might arrive at some solutions.



Mr. Fraser. Almost always, sir.



Chairman Hoekstra. Yes. The question I have for you, when Mr. Goodling and I went to New York, when Mrs. Mink went to New York, to me it doesn't look all that tough to go through and do the enforcement part, at least initially. You just walk down the street, you pick out the places with the steam venting out of the building and you can just kind and go and say, yep, I think we'd like to go there and we ought to check that out.


And somehow you must have done that if you believe that 63 percent of the work places in New York are in noncompliance.


Why not an aggressive enforcement like that?



Mr. Fraser. We do that and we have that. In 1997, we did nationally about 930, remember there are about 22,000 shops nationally, about 4,000 of those shops in New York City.


In 1997, we conducted about 930 investigations. Those were mostly in strike-force type activities. We recovered about $3.1 million in back wages for 7,900 workers, that's a lot of money considering that these are low-wage, often minimum-wage workers.


New York City accounted for almost 40 percent of that total, so a lot of that effort was concentrated in New York City. Three hundred forty-five investigations, $1.3 million in back wages to 3,600 workers. We have 40 investigators in the New York metro area with the increase we got last year, so we have 40 people serving a population of several tens of millions of people, a small part of whom are in the garment industry, but the garment industry is our No. 1 priority there.



Chairman Hoekstra. There are lots of other questions, but I think we are going to invite you back to have a fuller discussion of your strategy. The other thing we have done is we have met with the Department over the last number of months, it's kind of like are we focusing on what really needs to be done. I get calls from my district complaining about nit-picky little violations. You're in there and you're fining them $5,000. You've got time to find them but you don't have time to find what appears to be serious, very obvious violations. The folks in my district question your focus on what is really important. Do you need some latitude within the law to give you that structure and that flexibility?


We have looked at the Department. The Department spends I think in terms of discretionary funds somewhere in the neighborhood of $12 to $13 billion. The Department, for next year, is asking for, I believe, an additional $27 million to investigate under ILAB overseas conditions. So, we question why you are requesting money to go overseas for those kinds of investigations when we, obviously, have work that needs to be here in the United States. I think we would really hope that we can work with the Department over the coming months. One of the things we're looking at is to identify some extra dollars that can go to the Department, specifically to address this issue. I think this enforcement is a key and a pressing issue and we want to help you get the resources necessary. But, we want those resources targeted as a clear priority for enforcement and not finding its way into a bunch of areas we question. I think that's one of the concerns we have.


My colleagues talk about Labor Department cuts. But, let's focus on where the real issue is. I think we want to have a dialogue and debate to make that happen, then match the resources on those priority projects.



Mr. Fraser. And, that, we have common interest there. That's exactly what we want to do, that exactly how we're trying to pick important priorities.


If I may just suggest to you that one of those involves the item you mentioned, the money, the international money that is in the budget request. That is part of the President's child labor initiative and that is part of a larger initiative that involves an effort to deal with serious child labor problems, here at home and abroad. That request is for money to finance efforts through international organizations to attack a worldwide problem of 250 million children; 120 million of them working full-time and some of them in the most exploitative circumstances.


So, making priorities is always a difficult problem and that's an important problem as well.



Chairman Hoekstra. W have seen where some of that money is going and we have got questions about it. I have not been to the Northern Marianas to take a look at the shops and the work conditions out there. I did, though, see a feature a couple of weeks ago on 20/20 and I don't know –

have you been out to the Northern Marianas and taken a look at those shops?



Mr. Fraser. Yes, sir. I was there last summer.



Chairman Hoekstra. And have you also gone through the shops in New York?



Mr. Fraser. Yes, sir. Several times.



Chairman Hoekstra. I have to believe that, at least what I have seen with the barred windows, the lighting, the ventilation, and the women sitting with the material over their faces, the working conditions and the equipment in New York is worse than the situation currently in place in the Northern Marianas.


Now, again, the sample I saw on 20/20 was very limited, but these are pretty deplorable conditions in New York.



Mr. Fraser. I absolutely agree. I've seen them in New York and Los Angeles and Philadelphia and I've seen them in the Marianas, and none of the conditions are anything to be proud of in this country. The situation in the Marianas has a whole other set of dimensions to it that make it very, very troubling.



Chairman Hoekstra. Correct. The human rights issues and those others. Thank you. Mrs. Mink.



Mrs. Mink. Thank you, Mr. Chairman. I thank you, Mr. Fraser, for coming here today. I have very mixed feelings about this whole issue. The deplorable conditions that exist in the garment industry and these small shops are totally inexcusable for this country to tolerate. And as I said earlier in the opening remarks, I commend the chairman for opening these hearings.


And as we heard today, many people suggested that the Labor Department was not as aggressive as it should be in helping these individuals seek assistance and support and find a partner in the Government somewhere to help them collect their back wages and the overtime compensation which is due. And I find that very troublesome that not a whole lot has been done. If it had been done we wouldn't be seeing these conditions in New York and elsewhere in the country.


I can also understand the lack of resources that the Department has stated to me on a number of occasions. Nine people, for instance, can't possibly do the enforcement in New York City when you have to be spread in so many different ways, and so part of that responsibility for not providing the resources is certainly Congress's fault in not giving you sufficient funds in which to operate.


In that connection, I want to also commend the chairman of this subcommittee in suggesting that he might start an effort to try to get more funds to the Department so that more aggressive enforcement action can be taken.


I think the chairman of the full committee hit it right on the head when he said these conditions wouldn't be tolerated in his district. He would close them down. And so the nagging question that always comes back to us that feel the same way about conditions like that if they should occur in our district, we would find ways to close them down. We would take action to see that the back wages were paid to the workers, and so when you hear of the plight of tens of thousands of these workers across the country, not having this support from the Federal Government and from the State Government, in particular, because I think it's a State responsibility.


In my State, that's how I would regard it, and so collectively we have, we share a great deal of this burden and I don't know what the answer is. Several witnesses today suggested the manufacturers accountability act and you have started on that in a voluntary way.


A couple of people said voluntary won't work, you have to have a compulsory program, which I tend to believe is probably the way to go at. But in the meantime, if the Congress doesn't give you the tools, the money, or an accountability act, what is there to do? What can we do as, you know, ordinary citizens? Yourself, as a member of the Labor Department, what can we do? Is there any advice you can give to the workers, the workers organizations in Chinatown? It's not a lack of resolve, because if you've read Peter Kwong's book, you would see the number of instances in which he describes individual workers who took it upon themselves to picket the restaurants, to picket the sites, and to call attention to their plight.


So, I mean, we should resolve ourselves of this notion that the compliant Chinese is unwilling to come forward. That's not true. They are there, they want to have help, and they are looking to the Federal Government, and the State government, and the Congress to try to do something about it. I want to join in that respect, but I also feel at a loss, what are we going to do if we can't get this bill, H.R. 93, 23 passed?


If we can't get more money into your department, where do we go to help these unfortunate people who have there and have very little resources to call for their assistance?



Mr. Fraser. Well, Mrs. Mink, that's a very good question. It's one we've been struggling with for a number of years and trying to get a better answer to all the time.


Professor Kwong started out with a good suggestion which is if we can build measures of trust with the workers, get their cooperation, get their willingness to come forward and identify problems, that is a very good place to start.


This is a joint Federal/State responsibility. As I said, we're not going to pass the buck. This is a job we want to get done.



Mrs. Mink. Let me ask you a question. How many Chinese-speaking investigators and inspectors do you have in the New York City area that can work to build this trust and this relationship with the workers?



Mr. Fraser. I will find that out for you. I know we made second-language requirements a priority in the hiring of the hiring of the new staff we brought on last year. I know we brought on Chinese-speaking investigators both in New York and in California.


I can get that information for you. I don't have it with me this afternoon.



See Appendix W for Answer to Mrs. Mink’s Question Regarding Chinese Speaking Investigators in New York City



Mrs. Mink. It's not just Chinese. I raised that because we were talking about it, but there are all, various different ethnic groups –



Mr. Fraser. Yes.



Mrs. Mink. – Different minorities, that make up the whole industry, so you need to be sensitive to all of the ethnic groups.



Mr. Fraser. Different dialects of Chinese, Vietnamese, Thai, Cambodian, Spanish, all of those languages are represented and more. We have worked with other agencies to get language translation capabilities. We continue to do that. As I said, we may put a priority on hiring people who had those second-language capabilities to deal just with just this problem.



Mrs. Mink. I might say it's not difficult. I, in the spur of the moment decided to go up to New York to try to find out where my astute chairman went and to see what he saw so that I could be at least knowledgeable about this issue.


And we had no trouble finding someone who could be our guide, who could speak the language, so I don't think that should be an insurmountable problem.


It's just that somehow you haven't put that as a priority as essential in establishing rapport with the workers.



Mr. Fraser. Right. But getting back to your larger question. Our conclusion is, as I said in my statement, that this is not something the Federal Government can do by itself. It's not something State government can do by itself. It's not something the local health department can do by itself.


Real leverage in this industry, real leverage in this industry comes from the economic decision-making that manufacturers and retailers exercise.


When they make their buying decisions, when they contract out their work, that's the ultimate leverage. Our strategic approach to this is to say that if we are going to influence the behavior of contractors who can start in business tomorrow, go out of business the day after and be reoperating the day after that. The only way to influence their behavior is their buyers care and express their concern about how they treat their workers.


In our sphere of influence, that's the only strategic path to success we see.



Mrs. Mink. That is really the telling comment on this whole issue and I couldn't agree with you more, that that's the heart of our solution, that's where we have to go and that's where I hope that this committee will direct its attention to.


And Mr. Chairman, in your reference to the Northern Marianas, the conditions there, I think, are, if not equal, probably worse than they are in this country and I would hope that you would allow this subcommittee or if not, yourself, authorize the ranking member of this subcommittee to make an official trip to the Northern Marianas, and I'd be pleased to do that any time you'd like to send me. And I'd be willing to write a report and testify as my good chairman of the full committee was permitted to do today.


Thank you.



Chairman Hoekstra. Only one recommendation – I don't think I can authorize you but I will urge Mr. Goodling to do that?

Mrs. Mink. You have to sign those authorizations.



Chairman Hoekstra. I don't. I think Mr. Goodling does. But just one recommendation, don't take your golf clubs.





Mrs. Mink. No, I don't play golf. I don't even swim.



Chairman Hoekstra. Thank you very much. Mr. Fraser, thank you very much.


Just to give you a little bit of background as to where we go from here. We have heard a lot of compelling testimony about working conditions. Maybe a conspiracy, or situation of silence. This issue is not being resolved, in any event, at the kind of pace or the rate that we would like it to be. Workers, in many cases, live in a state of fear about raising these conditions – bringing them out into the open – whether the fear is rational or not. We have real issues and we have problems to deal with.


What we plan on doing over the next couple of months is to continue working on this. There are a lot of individuals, groups, and organizations that we will talk to.


As I indicated to you, Mr. Fraser, I think we would like more dialogue with the Department as to how we can address these issues. Mrs. Mink had requested that UNITE have the opportunity to testify today.


As you can see, we have now gone for almost four hours today. UNITE will be given that opportunity and it is on our schedule to have UNITE come and give testimony in front of this committee as to the situation that we discussed today.


We have other groups that also want to come and testify. We have the retailers, the NRF?


Mr. Fraser. Yes, the National Retail Federation.



Chairman Hoekstra. National Retail Federation. When the NRF heard what today’s topic was, they did want to come in and testify. So we plan on going through a process that allows a wide range of individuals and organizations to build on what we learned today and to complement that as we move forward.


With the testimony and the statements of the ranking member today, this is a process and a project that we can work on in a bipartisan way. I believe this is something that the Congress can work on with the Labor Department.

So, thank you all for your testimony. Thank you to the workers for coming today.


The record will be left open for any submissions for three days so we can make sure we get all of the testimony and everything in.



Appendix X for Village Voice Article, The Union From Hell

Appendix Y for Statement of May Y. Chen, Local 23-25 UNITE

Appendix Z for Wall Street Journal Article

Appendix AA for GUESS? INC. Response to Secretary Robert Reich

Appendix BB for Statement of Susan Cowell, Vice President of UNITE

Appendix CC for Backgrounder – UNITE and the Fight Against Sweatshops

Appendix DD for Department of Labor Response Regarding Back Wages

Appendix EE for Pamphlet Copy of a Publication NMASS, National

Mobilization Against Sweatshops


Without objection the subcommittee is adjourned.


[Whereupon, at 5:48 p.m., the subcommittee adjourned subject to the call of the Chair.]