Fashion Faux Pas? Free Trade and Sweatshop Labor in Guatemala

By Cyril Mychalejko

*Article originally published in Truthout.

Free trade agreements have not delivered promised protections to workers, as the case of Guatemalan sweatshop labor illustrates.

Juana, a 37-year-old single mother of two teenage sons, worked at a sweatshop in Guatemala that supplied clothes to more than 60 US retailers for four years.

“It was just enough to survive,” said Juana of the $1.05 hourly base wage she received at the factory. “When they paid for extra hours, one could get more resources. But it is not enough for education, housing, health, food and clothing. One does not live well with that wage. You need someone else in the family to be working, too.”

She is one of more than 1,000 mostly indigenous Mayan workers who were exploited and robbed at the Alianza Fashion Factory in the Department of Chimaltenango making garments for brands such as Macy’s, Walmart, JCPenney and Kohl’s. A worker such as Juana would have to work for more than 9,776 years to earn the $33.7 million JCPenney CEO Myron E. Ullman III made in 2012. JCPenney was Alianza’s top client in 2011.

report published in January by the Institute for Global Labour and Human Rights and the Center for Studies and Support for Local Development (CEADEL) offers a detailed case study of the corruption, abuse and shameless profiteering that often exemplify the global supply chain, demonstrating that globalization and “free trade” do not “lift all boats” but instead build more yachts for the 1%.

“Over the last 12 years, the Alianza workers were robbed of over $6 million in wages and benefits due them, most significantly health and pension benefits through the Guatemalan Social Security Institute (IGSS),” the report states.

During those 12 years, the report estimates that more than 52 million garments were produced for export. Retailers have marked up the price from the cost of production of items as much as 550 percent.

Bong Choon Park Seo, the South Korean owner of the factory, closed Alianza in March 2013 and is being sought by the Guatemalan government, although critics question how resolutely. In the 12 years that Park owned the factory he changed its legal name four times to avoid taxes and pocket the millions of dollars of stolen wages. Continue reading