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Shouldn’t the American Government Lead by Example?

Shouldn’t the American Government Lead by Example?

The story of Propper International, one of the largest clothing companies in the world, offers some important lessons on the ways the American government, sometimes inadvertently, undermines workers’ ability to make their jobs better globally.

The federal government’s complicity in labor abuses was recently highlighted by The New York Times in a sweeping investigation of working conditions at federal suppliers around the world. The piece was an unusually detailed indictment of the American government’s role in accelerating the race to the bottom for workers.

The Times piece revealed how and why Uncle Sam buys at least $1.5 billion worth of clothes from sweatshops in Mexico, Haiti, the Dominican Republic, Cambodia, Bangladesh and elsewhere for resale or for uniforms by federal workers.

The Missouri-based Propper International figured prominently in the Times story because the company has a contract with the General Services Administration, worth more than $30 million with the federal government for uniforms, and several of the company’s overseas suppliers (in the Dominican Republic and Haiti) pay unlivable wages and workers reported abusive conditions on the job.

But there’s more to this story. For more than a decade, the company has been a major source of camouflage pants and battle dress clothing for the Defense Department, drawing millions of dollars in contracts. Until around 2010, much of this production was happening at a plant in Puerto Rico called Adjuntas.

For years, media outlets, labor advocates and human rights groups complained about conditions there in Puerto Rico. For example, Propper skirted a law for more than a decade that granted employees 12 paid sick days and 15 days of vacation per year, by firing and rehiring workers.

Despite Propper's violation of the law, the Labor Department at no point sanctioned Propper for its actions. The Defense Department did not sever ties with the company or threaten to stop contracting with it. The State Department was equally silent. Instead, the government strengthened its relationship with the company—thereby incentivizing the competitive advantage afforded by its illegal behavior.

When Propper’s workers at various factories in Puerto Rico fought back and tried to form a union to address violations, Propper closed most of its facilities and reopened some under a different owner, now called MM Manufacturing. 

As more light was shed on Propper’s behavior in Puerto Rico (a U.S. territory), the company decided to do what many of its competitors already had: Follow the path to cheaper wages. Workers in Puerto Rico made the minimum wage of $5.85 an hour. Propper shifted production to a factory called Suprema in the Dominican Republic, where wages were $5 an hour cheaper. The company continued to ignore labor laws.

“Propper has committed severe violations of...Dominican law, including mass…terminations of union leaders and members,” concluded the Worker Rights Consortium’s (WRC's) 2010 audit. It cited more than a half dozen other legal violations related to wages and health and safety.

Today, workers say wages at Suprema are still lower than legal wage requirements. Maximum wages at the plant have fallen in the past four years by more than 20%, which are now, at most, $1.20 per hour.

With help from ever-increasing federal contracts, Propper has continued its race to the bottom.

Suprema now has 180 workers compared to the 1,000 it had 2009. Jobs are moving to Propper’s new factory, BKI, in CODEVI Industrial Park in Ouanaminthe, Haiti.

How are wages and conditions at Propper’s factory in Haiti? Awful. BKI workers earn at most $.72 per hour: Propper fails to pay its Haitian workers even the minimum wage, which is $.86 per hour. There is forced and unpaid overtime. BKI lacks basic chemical and fire hazard precautions or safe or clean drinking water. The plant is illegally and dangerously hot. There are not enough toilets and wash stations, according to an April 2013 audit by the International Labor Organization's Better Work Haiti.

Conditions like these are the norm in Haitian garment factories, according to Scott Nova, WRC’s executive director. Companies like Propper willfully and systematically violate minimum wage laws across the industry, Nova said. Workers are robbed of nearly one-third of their wages. 

Meanwhile, the federal government, through USAID, is financing CODEVI’s expansion, even though it is undermining wages in Haiti, the Dominican Republic and in the global garment industry across the board.

America's economy is desperate for jobs. Southern states like North Carolina have been decimated in the past two decades as cut-and-sew jobs were shipped overseas to countries like Bangladesh, the Dominican Republic and Haiti. Consecutive administrations have tried any number of tactics to stimulate our economy and create jobs. But one hand does what the other undoes.

Federal agencies may save money by buying cheaper uniforms. But if that means shipping jobs abroad to factories that break labor laws and viciously fight workers’ rights to a voice on the job, the policy is unsustainable.

The U.S. government must implement new rules to improve the lives of millions of garment workers and lead by example.

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