Article — From the January 2010 issue

Shopping for Sweat

The human cost of a two-dollar T-shirt

Running alongside the Mekong and Tonle Sap rivers, the Sisowath Quay is the main drag for tourists, expatriates, and international aid workers in the Cambodian capital of Phnom Penh. By day they flock to the grounds of the Royal Palace, with its famous Silver Pagoda and dollhouse-like Napoleon III Pavilion, and to Wat Botum, a golden spire–topped Buddhist monastery that in the 1930s fostered a young novice monk named Saloth Sar, better known later in life as Pol Pot. At night, Westerners push their way to the quay’s open-air bars and restaurants through a circus of street vendors: book and video sellers, opium dealers, tuk-tuk drivers, and the unavoidable young prostitutes. “I’m too tired these days to even think about sex,” I overheard a Briton complain to his friend one night last July at a faux pub called Huxley’s Brave New World, which featured a soundtrack heavy on the Rolling Stones and the Doors. A waitress holding a small baby under her arm served them mugs of beer and the signature “Huxley’s Tower” of Cajun-breaded shrimp, pork ribs, and chicken wings.

Other than the nightclubs and “hostess bars” whose neon lights illuminate a few dim side streets, the rest of Phnom Penh shuts down early. By ten o’clock the streets are free of traffic, and a motorcycle can quickly cover the city center. Along Mao Zedong Boulevard sit foreign embassies and the garish blue-and-white tower of the anti-poverty group CARE, a perfect symbol of the excesses of the international charity complex. Norodom Boulevard, named for the country’s former king, is home to the most powerful political institutions: Prime Minister Hun Sen’s ruling People’s Party, whose logo is a goddess sprinkling gold dust, fitting for a regime whose bosses have grown rich through corruption; the ministry of the interior, which oversees the police and otherwise maintains order; and the local offices of the World Bank, a major donor to the country.

One end of Norodom Boulevard connects to Road No. 2, which winds east through a procession of shantytowns to the border with Vietnam, roughly eighty miles away. If Norodom houses the political power, Road No. 2, which is lined with dozens of factories, embodies the engine of Cambodia’s economy. These plants, and hundreds more around the capital’s periphery, have sprung up since the mid-Nineties to make apparel for Western corporations.

In 1999, Cambodia signed a bilateral trade agreement that allowed it to export a quota of textile products to the United States under highly favorable terms. In exchange, Cambodia agreed to improve labor conditions and submit to factory inspections by the International Labor Organization (ILO); if better conditions were documented, the country’s quota would be raised. American unions lobbied heavily for the deal. For the first time, the United States would predicate trade on labor rights, not merely as a talking point but as part of an enforceable agreement. It set the stage for Cambodia to become a major garment exporter and allowed it to build a reputation as a “sweat-free” country.

Even after 2005, when global textile quotas were phased out and the U.S.–Cambodian trade agreement lapsed as a result, the garment industry continued to grow. It is currently the country’s largest sector, employing 350,000 workers, most of them young women. Apparel accounts for three quarters of export earnings, with about 60 percent of that output going to the United States. Many of the biggest apparel brands and buyers source from Cambodia, among them Walmart, Nike, Adidas, Target, Gap, Sears, Eddie Bauer, and Puma. Although there is no longer an enforcement mechanism in place, the ILO continues to monitor factories, and Cambodia has maintained its status as a model apparel producer. Two years ago, USA Today published an article about how the country had “position[ed] itself as the sweatshop-free producer in a fiercely competitive global clothing market”; Cambodia, a Levi’s executive told the newspaper, “is a special country.” In his book Giving: How Each of Us Can Change the World, former President Bill Clinton wrote that Cambodia offered a model to be emulated by other developing countries in turning fair labor practices into a “marketing asset to discerning U.S. and European consumers.”

And yet despite Cambodia’s friendly reputation, its workers have not seriously benefited from the trade deal, in terms of either wages or labor standards. There is a simple reason for this: apparel buyers, while quite happy to win accolades for doing business in Cambodia, have remained unwilling to pay much for the privilege. Scott Nova, head of the Washington-based Worker Rights Consortium, describes sourcing departments as the “beating heart” of apparel firms. “They are compensated on the basis of how cheap they can get prices,” he told me. “The factories can take some modest steps on labor conditions, but one thing they cannot do is raise wages, because that causes the whole model to collapse. Any government that imposed a living wage as a legal minimum and tolerated genuine collective bargaining would see its local industry vanish in a matter of months.”

Because of this, pay for apparel workers in Cambodia has stagnated, according to a 2008 survey, at 33 cents an hour, lower than anywhere but Bangladesh.Directly above Cambodia were Pakistan (37 cents an hour), Vietnam (38 cents), and Sri Lanka (43 cents). China, with wages between 55 and 80 cents per hour in inland areas, was the ninth cheapest.Labor unions are abundant, but most are funded and controlled by employers or by the government, and independent activists have been fired, suspended, sued, and otherwise targeted for repression. In 2004, even before the trade deal with the United States expired, a well-known apparel union leader and founder of the main opposition party was shot and killed in central Phnom Penh. Two other independent unionists were murdered after that, in 2004 and 2007. Of the three cases, one was closed because police said there was insufficient evidence; in the two others, convictions were obtained in trials that were harshly criticized by international human-rights groups observing the proceedings. And so even as factories poured into Cambodia and exports boomed, apparel workers got poorer. The monthly minimum wage at apparel plants (which, like many Cambodian businesses, typically pay workers in U.S. dollars) was $45 in 2000, and nine years later it was $56; during that same period, inflation has cut the buying power of a dollar by 37 percent.

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