[Extensions of Remarks]
[Pages E125-E127]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

PHILADELPHIA INQUIRER EXPOSES LABOR ABUSES ON U.S. SOIL

______

HON. GEORGE MILLER

of california

in the house of representatives

Wednesday, February 11, 1998

Mr. MILLER of California. Mr. Speaker, the following article appeared
in the February 9, 1998 Philadelphia Inquirer and describes the living
and working conditions in the U.S. Commonwealth of the Northern Mariana
Islands (CNMI). This article, ``Your Pricey Clothing is Their Low-Pay''
offers additional examples of the alarming conditions under which many
workers in this U.S. territory toil.
Every independent reporter who has traveled to the CNMI to
investigate the working and living conditions of the tens of thousands
of imported foreign workers there--whose population outnumbers that of
the U.S. citizens--has reached the same alarming conclusion: U.S. laws
designed to protect workers on U.S. soil are not being adequately
applied or enforced. Instead, this part of America has become an
outpost for foreign investors, the construction, tourism and garment
industries being the major suppliers of foreign workers. In the CNMI,
Chinese labor bosses are able to ``run their factories just as they
would in China--as virtual sweatshops.'' Because this is a U.S.
territory, $810 million worth of garments manufactured under these
conditions in 1997 entered the U.S. duty-- and quota-free and allowed
to bear the ``Made in USA'' label.
One Chinese woman describes restrictive labor practices that include
being forbidden from attending church. Another tells of working seven
days a week and only occasionally getting a half-day off on Sundays.
Human rights advocates say ``many guest workers endure unpaid work,
forced overtime, withheld wages and unsafe workplaces.''
Many foreign workers live in ``squalid shacks without running water,
sufficient toilets or proper ventilation'' but ``are too deep in debt
back home to risk getting fired'' by speaking out about unfair
treatment, poor working conditions, or improper wages. Indeed, many of
these workers have sold their family's land, their homes, and have
borrowed the money from loan sharks to pay recruiters who have promised
them good, high-paying jobs in America. The workers must repay these
loans or risk harm to themselves and their families.
As the article attests, the CNMI is hardly a good example of a
situation we in Congress would want to emulate in our hoe States.
Rather, it is an example of what can go horribly wrong when a U.S.
territory government develops an economy based heavily on the
importation of cheap, alien, indentured workers, who are granted no
stake in society, and who are denied adequate labor protections by the
local government.
Congress can, and should, take action to correct this situation. I
have introduced legislation, HR 1450--the ``Insular Fair Wage and Human
Rights Act'' that would place the CNMI immigration system under federal
law, bringing the CNMI into conformity with every other U.S. territory.
Further, this legislation will incrementally increase the local minimum
wage until it reaches the federal level, and provide that garments only
be allowed to bear the ``Made in USA'' label if all federal laws were
adhered to in the manufacture of the garment.

[From the Philadelphia Inquirer, Feb. 8, 1998]

Your Pricey Clothing is Their Low-Pay Work

(By Jennifer Lin)

Saipan, Northern Mariana Island.-- The rest of America may
worry about losing jobs to Asia, but this lush island in the
far western Pacific has created an outpost of Asia right on
American soil.
Pacific Rim investors--primarily overseas Chinese and
Koreans--have flocked to this U.S. territory, building a
profitable world-class garment industry. They hire workers
from China. They import fabric, buttons and zippers from
China. And in many cases, they run their factories just as
they would in China--as virtual sweatshops--ignoring U.S.
laws designed to protect workers.
Even so, the factories can sew ``Made in the U.S.A.'' onto
clothing, skirt U.S. duties and quotas, and pay their workers
far less than the U.S. minimum wage. Attempts to rescind
those privileges have been opposed by several American
lawmakers, some of whom have taken trips to Saipan paid for
by the island government.

[[Page E126]]

The coveted ``Made in the U.S.A.'' label is like a seal of
approval for clothing-makers, implying that products are
untainted by labor abuses the American buying public
associates with garments made in Asian sweatshops. But it has
lost much of its meaning in Saipan.
Such companies as J.C. Penney, Ralph Lauren, Tommy Hilfiger
and Jones New York have paid factories here to make their
clothing under contract. The suppliers pay less than U.S.
minimum wage and ship duty-free to the U.S.--giving them a
decided advantage over competitors who make garments in the
U.S.
Often it is impossible for American shoppers to know
whether a ``Made In U.S.A.'' shirt was sewn by workers in
Philadelphia or by low-wage Chinese in Saipan. (Sensing
problems, some U.S. companies have asked their Saipan
suppliers to switch to labels that say ``Made in the Northern
Marianas'' or ``Made in Saipan.'')
Last year, garmet factories on the islands shipped a
projected $810 million in clothing to the U.S. mainland. Had
the merchandise been treated like imports from Asia, the U.S.
Treasury could have collected $150 million in duties.
Most workers in Saipan's garment industry are Chinese, and
21 of the 26 factories are owned by Asian investors. China's
giant, government-controlled textile industry has set up shop
here as a way of avoiding strict U.S. quotas. Marianas
Garment Manufacturing Inc., indirectly owned by the Chinese
textile industry, hires all 500 of its workers in China and
flies them here to sew ``Made in Saipan, U.S.A.'' onto its
clothing.
There is no other place in the United States or its
territories like the Commonwealth of the Northern Mariana
Islands, a chain of 14 scenic islands, including the largest,
Saipan, where more than 5,000 American troops died in a World
War II battle.
It is the only place on U.S. soil where the local
government can set its own rules on minimum wage, and one of
two with its own immigration policy (along with American
Samoa).
It is the only place where factories import entire
workforces and can pay them $3.05 an hour, well below the
minimum wage of $5.15 an hour in the United States and the $8
an hour earned by the typical American garment worker.
And it is the only place where foreign workers outnumber
citizens--about 35,000 ``guest workers'' to 27,000 U.S.
citizens.
The Northern Mariana Islands offer just one example of how
intense global competition combines with an ample supply of
desperately poor laborers to perpetuate sweatshop conditions.
Garment manufacturers hopscotch the globe in search of cheap
labor, cutting deals with local contractors who promise ever
cheaper and more pliant workers. When wages rise or workers
become restive, manufacturers spread some of their work to
the next cheap site, from Taiwan and South Korea in the 1980s
to Mexico and Honduras today.
Often, the result is substandard working conditions and
subsistence wages, despite campaigns by labor and human-
rights groups that have improved the lives of many garment
workers. The persistence of sweatshops preserves the low
prices and wide selection Americans enjoy for imported
garments. But sweatshops also make American-made garments
less competitive while swelling American's massive trade
deficit with the rest of the world--led by China.
What makes the Northern Mariana Islands unique is that
manufacturers here rely not on local workers (who are U.S.
citizens) but on imported workforces of impoverished laborers
eager to toil for low wages, often under sweatshop
conditions.
The islands' garment wages are far higher than the 20 to 50
cents per hour paid in the world's lowest-paying countries.
But the exemptions from U.S. standards--and the direct
pipeline to the U.S. retail market--more than compensate. The
transplanted Asian garment industry here is growing at a rate
of 45 percent a year, according to the U.S. Commerce
Department.
In an effort to promote economic growth, the exemptions
were negotiated by island leaders and approved by Congress in
1976, a year after islanders voted for U.S. commonwealth
status. (The United States seized control of the islands from
Japan after World War II.)
Island leaders argued that the territory in 1976 was too
underdeveloped to afford the federal minimum wage. Islanders
also were intent on controlling immigration. With a
population in 1976 of only 14,000, the islands feared being
overrun by Asians trying to migrate to the United States but
getting no farther than Saipan.
(American Samoa has a small number of Chinese workers, but
most of its ``guest workers'' come from neighboring Western
Samoa and Tonga.)
Island leaders say they need the exemptions to protect
their economy. Employers contend that locals do not want the
backbreaking, low-wage sewing or construction jobs that go to
outsiders.
Foreign laborers are so hungry for work that they pay
thousands of borrowed dollars to middlemen to get them jobs.
Once here, many live like indentured servants.
Coming from China, the Philippines, Bangladesh and Sri
Lanka, they sew clothing, build factories, clean houses, cook
meals, wait on tourists, work as hostesses in karaoke bars,
pave roads and guard hotels. Critics--including President
Clinton--charge that the Northern Mariana Islands are
flouting basic American values. Clinton has chastised the
island government for importing destitute Asians despite an
unemployment rate of 14 percent among natives on the islands,
where 30 percent of all citizens live below the poverty line.
In a letter last May, the President called labor practices on
the islands `inconsistent with our country's values.''
On Jan. 14, a bipartisan U.S. congressional commission
noted that ``only a few countries, and no democratic society,
have immigration policies'' as open to abuse as Saipan's. The
commission recommended extending U.S. labor and immigration
laws to the islands--reforms also proposed by the Reagan and
Bush administrations.
Pending in Congress are bills that would gradually raise
the islands' minimum wage to the federal level, impose
federal guidelines for immigration, and restrict the use of
the ``Made in the U.S.A.'' label.
The Marianas government has hosted a steady stream of
congressional visitors, at an estimated cost of more than
$500,000. The Roll Call newspaper reported that in the last
year, seven lawmakers, 75 aides, five spouses and one child--
House Majority Whip Tom DeLay (R., Texas) took his
daughter)--have traveled to Saipan, at a cost of about $5,000
a person. Typically, the visitors stay in beachfront hotels,
tour new factories, and visit golf courses and coral reefs.
``Everybody cries `junket,' '' said Tony Rudy, DeLay's
press secretary. ``. . . The fact is that our schedule was
filled with meetings from top to bottom.''
Rudy said DeLay toured factories and spoke with workers,
who told him they earned more in Saipan than they could in
their native countries.
``If you bump that up to $5 or whatever an hour,'' Rudy
said, companies will ``just take the next plane over to the
Philippines, where they can pay $1 an hour.''
In a letter to officials in Saipan in June, DeLay and House
Majority Leader Dick Armey (R., Texas) said any legislation
that would harm the islands' economy runs counter to the
``principles of the Republican Party.'' Adam Turner, a
spokesman for Juan N. Babauta, the Marianas' representative
in Washington, said only ``a handful'' of Saipan's factories
could be considered substandard.
``Hopefully,'' he said, ``the local government will do a
better job cleaning it up.''
In fact, most of the islands' impoverished garment workers
are grateful to earn $3 an hour. But they work on U.S. soil,
and it is indisputable that conditions in many plants here
would not pass muster in America.
Eric Gregoire, who until November was a human-rights
monitor for the Catholic Church, said some workers are
forbidden by their Asian bosses to come and go as they please
or to live as freely as people in the United States.
``We're all for economic prosperity, but you have to look
at the other side of the ledger,'' said Allen Staymen, head
of the office dealing with U.S. territories for the U.S.
Department of Interior. ``Slavery also was a very prosperous
economic system. Prosperity in itself doesn't justify
behavior that is not acceptable in the United States.''
In just 15 years, Saipan has built a flourishing garment
industry from almost nothing. Its factories employ about as
many people as does Philadelphia's beleaguered apparel-and-
textile trade, which has lost thousands of jobs to overseas
competitors.
``It's an absolute insult to American workers and American
taxpayers that you would be able to make these products using
harshly exploited individuals and foreign workers and then
get all the benefits of using the `Made in the U.S.A.'
label,'' said Rep. George Miller (D., Calif.), who is pushing
to take away most of the islands' privileges.
Spokesmen for several U.S. companies said their monitors
have found no evidence of substandard conditions in island
plants that sew their garments. ``We do monitor those
factories where we do sourcing in the Marianas, and to date
have had very satisfactory results,'' said Wes Card, chief
financial officer of Jones Apparel Group Inc. of Bristol,
which retails the Jones New York label.
One of biggest island factories is Marianas Garment
Manufacturing Inc.--indirectly owned by the China National
Textiles Import & Export Corp. (Chinatex), a behemoth that
handles $1.2 billion in Chinese textile exports to the world,
much of it to the United States.
Robert O'Connor, a Saipan-based attorney for the company,
denied that the factory, known locally as MGM, is tied to the
Chinese state-run textile industry.
``The name Chinatex has never had anything to do with this
corporation,'' O'Connor said.
In fact, all of the individuals listed as directors and
officers of the Saipan factory are executives with the Osaka,
Japan, branch office of Chinatex.
Wu Yong, president of the MGM factory, said in a telephone
interview from Osaka that Chinatex opened the factory because
shipments from Saipan are not controlled by U.S. quotas on
textile imports. The United States sets comprehensive limits
on shipments of clothing coming from other countries in order
to protect U.S. textile jobs. The factory uses labels that
say ``Made in Saipan, U.S.A.'' and ``Made in the U.S.A.''
MGM is one of several garment factories charged in recent
years with violations of federal labor laws. In 1992, the
island government accused the Chinese factory of keeping two
sets of books and paying sweatshop wages--half of the
territory's minimum

[[Page E127]]

wage, which was $2.15 an hour at the time. In September, the
company settled the charges by paying $1 million in back
wages.
``That happened five years ago,'' Wu said through an
interpreter. ``It's not happening anymore.''
Far from Saipan's luxury hotels are what the U.S. Interior
Department calls ``labor camps,'' home to 20,000 Asian
workers. The fortunate ones get dormitories with bunk beds
and communal bathrooms. Others find themselves consigned to
squalid shacks without running water, sufficient toilets or
proper ventilation.
Young Chinese women spend their days hunched over sewing
machines under fluorescent lights. The hours are long and the
conditions sometimes harsh, but few complain. They are too
deep in debt back home to risk getting fired.
Some Chinese men said they paid $7,000 apiece for
construction jobs, while Chinese seamstresses are charged
from $3,000 to $4,000 each for passage here--often as much as
they will earn in a year after paying taxes and fees for room
and board. The money goes to Chinese government middlemen,
who secure passports and arrange jobs.
Once here, guest workers are vulnerable to exploitation.
Human-rights advocates say many guest workers endure unpaid
work, forced overtime, withheld wages and unsafe workplaces.
A seamstress from southern China said she is forced to work
seven days a week at Micronesian Garment Manufacturing Inc.,
one of the largest factories, with nearly 300 workers.
Occasionally, she said, she can take a half-day off on Sunday
to wash her clothes or write letters. Several workers said
the garment factory, controlled by Hong Kong and mainland
Chinese investors, would not grant overtime unless the women
met their daily quotas. Typically, if a worker falls behind,
she must reach her quota on her own time just to qualify for
time-and-a-half overtime pay.
Steve Yim, a Hong Kong-based management consultant for
Micronesian Garment Manufacturing Inc., confirmed that
workers must meet their quotas before they can earn overtime
but denied that women work for no pay in order to fill their
daily quotas.
``I'm not aware of it,'' Yim said, adding that no one was
forced to work overtime, ``but if they are willing to work
seven days, we don't prohibit them. We can't stop them.''
Guests workers are reluctant to speak out, because they
know their employers can send them packing with one day's
notice.
``It's not a job market where if they don't like it, they
can leave,'' said Gregoire, the human rights worker. ``You're
going to sit there and endure whatever you have to endure.''
Most workers from China are required to sign contracts with
the Chinese government, vowing to obey the laws of the United
States, Northern Mariana Islands--and China.
A two-year contract for one Chinese carpenter forbids him
from engaging in ``any political or religious activity.'' He
cannot take drugs, watch ``sex movies,'' fight, get drunk or
``fall in love or get married.'' Some garment-industry
executives say conditions are improving as manufacturers
become more attuned to American labor practices.
Eloy Inos, an executive with Tan Holdings Corp., the
largest garment-maker on Saipan, said the garment factories
help create ancillary work in shipping, insurance and other
support services. He said some problems had been caused by
Asian manufacturers' unfamiliarity with U.S. labor standards.
``They've since learned and have changed a lot, although at
times the changes were painful,'' Inos said.
But restrictive labor practices persist in many garment
factories here, despite limited reforms and continued
pressure by human-rights groups. Recently, Chinese women were
forbidden by their employer from attending a Christian
church. The church's Korean pastor had to remind the South
Korean factory manager that people in the United States are
free to practice religion.
At another South Korean garment company--formerly S.R.
Corp., now Coral Fashion Inc.--workers were told that they
could leave their barracks only twice a week for one hour.
Violators ``will be barred from going out the barracks
indefinitely,'' the company wrote in a notice posted on Feb.
6, 1997. The factory has since been warned by local officials
that it is against the law in the United States to lock up
one's workers.

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