How Colleges Can Improve the Lives of Sweatshop Workers

Michael Morgenstern for The Chronicle

October 29, 2012

In the late 1990s, hundreds of campuses were filled with students protesting the production of college-licensed clothing in overseas sweatshops. Many institutions responded by adopting labor codes of conduct to ensure that apparel carrying college logos was produced under at least minimally acceptable conditions.

But monitoring thousands of global factories was and remains a big challenge, as does ensuring that violations get corrected. And there is growing recognition that the initial college codes were inadequate, especially with regard to compensation of workers. Most current college codes for licensed apparel fail to require even poverty-level wages for workers and often fall short of minimal labor standards on freedom of association and other issues.

The worker-compensation standard most colleges adopted called for paying workers in each country the legal minimum or the prevailing industry wage, whichever was higher. But that standard requires only obeying local law or adhering to market conditions—and the result is subpoverty wages in nearly every country. The problem is further compounded because many companies assert that higher wage scales will inevitably make them uncompetitive, encouraging other companies to maintain the status quo.

The good news is that an opportunity now exists for new action to assure that workers' wages meet at least a "basic needs" standard of compensation. Research I have conducted with Edward Soule into the Alta Gracia apparel factory, in the Dominican Republic, tells us that a company can pay its workers decent wages and still be competitive.

When Alta Gracia opened, in 2010, it committed to paying workers a "living wage" at roughly 350 percent above the legal minimum. The living wage in the Dominican Republic at the time was, in American dollars, about $500 a month versus the legal minimum wage of under $150 a month.

The factory has become commercially competitive without charging a premium price for its products, which are now for sale at more than 400 college bookstores across the nation.

More important, the factory has provided a documented pathway out of poverty for 150 workers and their families. Those individuals are now able to provide better shelter, food, and education for themselves and their families. And the money they can then spend locally helps improve their community.

We need more Alta Gracias. But the creation of such companies depends on further action by colleges across the United States. Specifically, leaders of those institutions have a choice.

Last year the Fair Labor Association, a nonprofit group that works to ensure that companies adhere to labor laws, revised its Workplace Code of Conduct to include a worker's right to a regular wage that meets the "basic needs" of the employee, two of his or her dependents, and some discretionary income. This is a significant step and is nearly identical to the living-wage standard adopted by Alta Gracia.

But the Fair Labor Association requires companies only to "take appropriate actions that seek to progressively realize" that standard. That just isn't good enough.

The Designated Supplier Program—developed and proposed by an alternative to the Fair Labor Association, the Worker Rights Consortium—would require pre-contract verification of a factory's "living wage" and other important workplace standards even before collegiate apparel orders could be placed. In return, the factories would receive price and volume commitments sufficient to meet the higher labor standards as well as multiyear contracts to provide stable employment. And because the program would consolidate the production of apparel that meets those standards, there would be far fewer factories to monitor.

The Designated Supplier Program is the better option.

Potential antitrust issues placed the DSP proposal in legal limbo for several years, but last December the U.S. Department of Justice issued a business-review letter stating that the proposal did not raise significant concerns over competition and could, in fact, have pro-competitive effects. This opens the door to supporting more companies like Alta Gracia. If the proposal is carried out, colleges would license their brands to apparel companies that promised to use approved factories, like Alta Gracia, to make products bearing the college names.

More than three dozen colleges have supported the Designated Supplier Program in principle, including Duke, Indiana, and Syracuse Universities. Now those institutions and others must decide whether to adopt the Designated Supplier Program in practice. If enough colleges opt for the DSP system, it will show that the model is viable, which in turn will result in more factories' giving workers the chance to climb out of poverty.

The basic choice is between setting up an agreed-upon decent-compensation standard now through the Designated Supplier Program or waiting for improvements to occur under the Fair Labor Association's process. It is time for each college community to debate those issues vigorously and decide how best to help improve conditions for workers at factories that produce licensed collegiate apparel.

At my own institution, I am a member of the licensing-oversight committee, and I intend to advocate for a code revision that ensures sweatshirts carrying the university logo come only from factories where wages meet at least the "basic needs" of workers and their families. Across the country, faculty members and students should take whatever actions they can—participating in committees, drafting petitions, organizing demonstrations—to persuade their colleges to commit to the Designated Supplier Program. I hope all colleges will take note of this reform opportunity and join in this important effort.

John M. Kline is a professor of international business diplomacy at Georgetown University.