Date of publication: March 17, 2005
Source: Shepherd Express Online
By Camille Dodero
Capitalism comes in many shapes and sizes; it’s positively Whitmanesque in its diversity.
There is the bygone capitalism pictured in PBS specials—the heavy industry captured on black-and-white newsreels, which saw our grandparents and great-grandparents trudge off to the Herbert Hoover Manufacturing Plant to work long, demanding hours making big, clunky things in cavernous, dangerous, smoky, smelly environments.
There is the more recent digital capitalism—which few of us experienced directly—where men and women not much different from ourselves got rich working 26 hours a day, eight days a week, designing software in clean, well-lighted, campus-like complexes while eating cafeteria sushi and getting company-financed back rubs.
And then there is the wacky strain of capitalism, that delightfully oxymoronic collection of disparate efforts that flies under the banner of socially responsible business. Ben & Jerry’s ice cream is a case in point—or was until 2000, when the little-company-that-could sold out to a huge conglomerate, Unilever. There is Fair Trade coffee for those who want to slake their thirst for caffeine without irritating their consciences. Profit-making enterprises such as these aim to do well while doing good. Ita neat trick, and one that two relatively green garment manufacturers—Waltham, Mass.-based No Sweat and the better-known American Apparel, of Los Angeles—are trying to master.
It’s a man-bites-dog story. As a general rule, garment manufacturers are not known for social consciousness. The industry stereotype tends toward sweatshops and Third World exploitation, which are less than edifying concepts—even in this era of Bushonomics.
Just ask Adam Neiman, the dogged co-founder and principal voice of No Sweat. The primary selling point of Neiman’s clothing isn’t that it’s especially sexy, cheap, or even fashionable. Rather, his garments, in the words of his chief financial officer, John Studer, “don’t hurt people.”
Which is more unusual than you might realize. Among all business sectors, the garment industry is especially infamous for exploiting the lowest-level workers by contracting with foreign factories that pay substandard wages, have poor ventilation and rodent infestations, and sometimes even hire children. The garments sold by No Sweat are “sweatshop-free” and “union-made”—manufactured by workers who earn a living wage, have health-care benefits, and belong to labor unions (in fact, Neiman believes, the only way to guarantee that management won’t mistreat its employees is if they’re represented by a union).
Neiman isn’t naive enough to believe he can implant a social conscience in the Gap-shopping American majority; he’s starting with progressive types who keep Fair Trade coffee on the burner. But the Newton, Mass., resident nurtures high hopes for his two-year-old business, those of a scrawny David trying to smite the sweatshop-reliant practices of the garment-industry Goliaths with one blow. His weapon of choice? The fiscal power of an as-yet-untapped consumer base. If No Sweat can prove there’s a substantial demand for ethical threads, Neiman reasons, the bigger brands will want to capitalize on the niche market, and therefore will change their exploitive ways. By this logic, Neiman’s profit is the worker’s gain. “We’re creating an opportunity for progressive consumers to participate in an experiment,” says Neiman. “Call it entrepreneurial activism—[an experiment] to see whether a niche market can be used to reform the larger industry. To me, that’s what makes the gamble worthwhile.”
Then there’s Dov Charney, the 35-year-old co-founder of the better-known multimillion-dollar sweatshop-free company, American Apparel. In the late 1990s, Charney designed a line of women’s formfitting baby Ts, tagged them with the label Classic Girl, and sold them to wholesalers. They were an instant success.
Since then, Charney’s youthful threads have been publicized everywhere from The New Yorker to CNN to GQ. He runs the largest garment factory in the United States, pays sewing-room employees substantially more than the federal minimum wage of $5.15 (his average sewing-room employee earns $12.50 per hour), and offers health benefits, subsidized lunches, and on-the-job massages.
But while both Neiman and Charney have built businesses around socially conscious practices, their similarities, it seems, end there. Charney may promote American Apparel as a “sweatshop-free” company (and claims to have invented the term), but he doesnthink guilt sells in the garment industry. “Clothing is all about sex and function. It’s not about protest,” he says. “[The other companies] sell sweatshop-free [products] based on charity, and it’s not sustainable: ‘Buy from us because we’re so poor and stupid and we don’t know how to do it better, so buy something from us for charitable reasons.’ It’s like conscience-based selling. American Apparel is more about efficiency. It’s about the fact that the way we manufacture T-shirts is better.”
Despite the two companies’ drastically different philosophies about sweatshop-free clothing, one thing is clear: with American Apparel’s seismic success and No Sweat’s 750% annual growth, there appears to be a market for it. No Sweat’s nerve center is nestled in the suburban basement of a brick building off Waltham’s main drag. Rosie the Riveter, the company’s mascot, flexes on the chest of a mannequin in the front window. Inside, Neiman—a medium-size man with fleshy red cheeks and a crowd of teeth—has his feet up on a desk. One of No Sweat’s four full-time employees, 26-year-old CFO John Studer, stares quizzically at a computer screen a few feet away. Neiman has always had a political-activism streak. At 12, the Georgia-born entrepreneur and his older sister protested President Nixon’s inauguration and ended up in police custody; at 15, he interned for George McGovern. During a stint at Harvard University, Neiman took time off to campaign for Jimmy Carter; his first post-college professional job was as a publicist for the International Ladies Garment Workers Union.
In contrast to American Apparel, which makes all its garments in its 8000-square-foot Los Angeles factory, No Sweat follows Neiman’s firm belief that a clothing company must outsource its production to international plants to be successful. “Each factory has to focus on what they do best,” Neiman insists. “One company does boxer shorts best. Another company does T-shirts, like American Apparel. Another factory does button-down [shirts]. In order for there to be any efficiency, you’ve got to have specialization.”
But No Sweat doesn’t view exporting jobs as undercutting U.S. labor unions. “The women in the developing world desperately need these jobs,” reads the company’s Web site. No Sweat also promises to keep at least 30% of its business in the United States. “We believe the only way to protect workers anywhere is to defend workers’ rights everywhere.”
In the back of No Sweat’s modest headquarters are two storage rooms of merchandise: women’s athletic gear from Universal Sportswear, in Bangor, Penn.; silk-screened T-shirts from Mirror Image, a union screen-printing shop in Pawtucket, R.I.; white camisoles from Montreal. In a third stockroom are thousands of shoeboxes from Jakarta, Indonesia. Each contains the company’s hallmark product, the No Sweat sneaker. Last May, Neiman appropriated the chunky-sole design of Chuck Taylor All-Star sneakers, the classic Converse canvas shoe that was snatched up by Nike in 2003, and began selling low-rise, sweatshop-free knockoffs for $35 a pair (they’re now $46). Each box of No Sweat’s faux Chucks contains a card detailing the wages and benefits of the Indonesian workers who manufactured the shoes: the lowest-paid employee in the Jakarta factory earns $90 a month—an estimated 20% more than the regional minimum wage—along with a rice allowance, fully funded health insurance, and paid maternity leave. (Neiman says those monthly salaries have risen $10 since the card was printed.)
“Part of our mission is to get consumers thinking about their own working conditions,” explains Neiman. “I want [consumers] to look at that sheet in the shoebox and say, ‘A hundred percent hospitalization? I don’t have that! Paid maternity? I don’t have that. How come these guys do? Oh—they have a union.’”
For the No Sweat sneaker’s release, Neiman staged a Michael Moore–style confrontation by visiting Nike’s Oregon headquarters, armed with a free pair of No Sweat shoes for CEO Phil Knight. At a press conference, he challenged the sneaker behemoth to supply a similar wage-rate card with its products. (In 1992, Neiman’s No Sweat business partner, Jeff Ballinger, published a copy of an Indonesian Nike worker’s pay stub in Harper’s magazine; the stub revealed that the woman earned 14 cents an hour and $37.46 a month—roughly half the cost of a pair of Nikes.) Not surprisingly, Knight “wasn’t available,” so Neiman met with Caitlin Morris, Nike’s spokeswoman for global issues, who said the activist’s ideas weren’t feasible for a much larger company such as Nike.
Although No Sweat’s efforts were a figurative pebble tossed at Nike’s corporate armored tank, the publicity stunt provided Neiman with enough news coverage to sell 30,000 pairs of sneakers. The sneaker’s relative success boosted gross sales of No Sweat’s manufacturing company, Bienestar Inc., from $84,806 to $744,555 in one calendar year. Today, nearly 100 “fair trade” outlets worldwide carry No Sweat sneakers.
Such figures suggest there’s a viable market for sweatshop-free goods—as does a University of Michigan study from October 2004. In the report, published in the Labor Studies Journal, researchers document how they stocked two department-store racks in the Detroit area with identical socks. They labeled one stand “Good Working Conditions”—defined as “no child labor,” “no sweatshops,” and “safe workplaces”—and left the other rack unadorned. Increasing the price of the GWC socks incrementally over a span of five months, the researchers found that one-third of customers were willing to shell out 10% more for sweatshop-free garments. The report concluded that “a sizeable and profitable niche market could be developed for some consumer products manufactured under good working conditions.”
“Consumers are routinely willing to pay enormous premiums for benefits and design,” says Scott Nova, executive director for the anti-sweatshop Workers Rights Consortium. “Is it really so unlikely that they’ll pay three percent more to know [their clothes weren’t] made by a nine-year-old?”
And once this demand is proven, Neiman believes, the bigger clothing companies will realize they’re missing out on potential sales. “When the government tells corporations to do something, it’s like their parents telling them. When the laborers and the activists tell them, it’s like their kid brothers. But if the consumer and the investors tell them, those are the girls they want to date,” he says. “If some new guy pops up on the block doing something that gets the girls’ attention, they will turn back flips to imitate them. Basically, everyone would rather be seduced than coerced.”
Dov Charney wants to get the girls, too. And he clearly agrees with Neiman’s philosophy of persuasion; in fact, it’s the engine that drives his $150 million business. But instead of aiming to entice stodgy corporate types, he’s after sexy, hip young adults. Neiman can have the Mother Jones readers; Charney wants the Vice set.
In fact, Charney never set out to be a spokesman for the sweatshop-free industry. A Tufts University dropout from Montreal who endured a miserable stint working in the garment business in South Carolina, he opened his own factory so he could have total control over product quality—not because he planned to wage any labor campaigns. And yet, eight years later, he employees 3,000 workers at his Los Angeles factory, and there are waiting lists to work for him.
Charney openly eschews political affiliation, deriding both the left and right as “boring.” In labor-reform circles, he’s a lightning rod for criticism: anti-sweatshop activists accuse him of resisting his employees’ attempt to unionize last year. Feminists and conservatives don’t particularly like him either, since American Apparel advertisements feature young women in clingy underwear, or nude in the bathtub.
But Charney doesn’t think drawing on sex is contradictory to the rest of his business practices. “They say that because we’re sweatshop-free, our advertising can’t have beautiful people. No, we have to just boil it down to common people,” explains Charney, who posed bare-ass for a Vice ad himself. “We’re saying, ‘Hey, our shit’s better. You’re going to look better in our socks.’ That’s the message, you know, that our shit’s better.” Unlike No Sweat, American Apparel has no desire to convince big-name brands such as Levi’s and Fruit of the Loom to change their labor practices. “Show me where Fruit of the Loom’s sexy panties are,” says Charney. “It’s not like young kids are dying to be in Fruit of the Loom. They don’t say, ‘I don’t even want to go out tonight without my Fruit of the Looms.’ [Fruit of the Loom] has lost touch with young adults. I’m not worried about changing them.”
And besides, he doesn’t think it matters to his customers where and how their clothes are made. “It’s no more than icing on the cake,” Charney insists. “Who cares if it’s sweatshop-free? Even our own employees buy clothing made in China.” It’s this attitude that really pisses off the left. “I think his out-and-out defiance and disrespect for the whole social-justice tradition will eventually bite him in the ass,” says Chris Mackin, one of multiple CEOs who tried to save the now-defunct sweatshop-free TeamX, a Los Angeles factory not only staffed by unionized workers, but co-owned by them. “He resisted a union drive. It’s this cult of personality in corporate America that somehow, if your personality is large enough and daring enough, you will exceed any of the needs or demands for fairness or justice that came before you because you’re so enlightened. That’s the kind of narcissism that I think is just ridiculous.”
For better or worse, though, Charney must be on to something: American Apparel has seen tremendous growth in the past five years. Projected figures for 2004 had the company grossing $150 million, and its retail stores have multiplied exponentially. And as American Apparel expands overseas, Charney promises not to pay any of his employees less than the U.S. federal minimum wage.
Sitting at his desk in Waltham, Adam Neiman points to a world map dotted with thumbtacks representing the retail stores that carry his brand. Pinned up are color printouts of seven new designs incorporating the No Sweat logo and the Rosie the Riveter emblem. They’re hipper than anything No Sweat has previously sold. “We’ve had a lot of bands that have been asking for stuff they could wear on stage,” Neiman says of the motivation behind the redesigns. “There was this band that did Total, ah, is it Total Live?”
“Total Request Live,” mumbles No Sweat’s chief operating officer, Anne O’Loughlin, a 2002 Tufts grad.
“Total Request Live, thank you,” says Neiman. “This is about the gazillionth time I’ve had to ask. It was this band Gratitude. They’re, um,” he pauses, as if trying to remember the word, “an emo band. This is this guy’s five-second break on MTV, and during these five seconds, he’s going”—Neiman frantically points at his shirt, mouthing “no sweat.”
Neiman calls Dov Charney’s managerial method the “righteous dude with the ponytail” model. It’s the same anti-union attitude, he says, that’s proffered by Ben & Jerry’s and Whole Foods. “‘We don’t need unions—we’ve got ponytails. We’re righteous dudes. Who needs a contract?’”
Neiman contends this approach is ultimately bad for the worker. “What we’re saying is that the righteous dude in the ponytail is no substitute for a union contract,” he says. “People die. People get older. People sell out. They get bought out. Things happen. Companies pass through the entrepreneurial phase, and then the management comes in and the bean counters come in, and the first thing they do is start squeezing the human beings. That’s just inevitable if there’s not a contract. If you’re righteous, you’re righteous enough to put it in writing.” There’s another major caveat with the virtuous-employer shtick, Neiman says. “The other problem with that righteous-dude model is that [it suggests] the best solution to all workers’ problems is to find a cool boss. That’s just not really an option for most of us.”
For his part, Charney insists American Apparel workers didn’t actually want to unionize, but that they’d been pressured into it by union reps. “You can see me supporting unions in many circumstances. But it’s not for management to promote a union. You tell me [of] one CEO in the world that says, ‘Union, yes! I want a union! I don’t want to deal with my employees directly. I’d rather go through a third party with little-to-mediocre quality of negotiators; I want to negotiate through them. That’s the path of efficiency for me.’ No way. That’s why we don’t outsource—we want to have a direct connection to the workers.”
The bottom line, says Charney, is that he just doesn’t think unions are necessary for his employees. “What about the fact that you can knock on the boss’s car window and he’ll roll it down and hear your story? Or that only one person removed from any worker, or two people removed, have my cell number? Or that you can say ‘Fuck you’ to me and you’re probably not going to get fired?
“For anybody that claims we frustrated the union, come visit the workers or shut your mouth,” he adds. “Is it a utopia? No. You’re working on a sewing machine—it’s hard work. Is it ideal? No, we’re not claiming it’s ideal. We’re making the best of it.”
And Charney has some choice words for Adam Neiman. “No Sweat—boring! That guy from Massachusetts—c’mon, dude, how many panties has he sold? How many children were born from his shit?” By Charney’s standards, the Indonesian factory workers producing No Sweat sneakers don’t exactly have it made. “Those workers earn less than a buck an hour. It’s on his own Web site. He says they’re making more than the minimum wage in that country. But it’s like 70 cents an hour; that’s not sweatshop-free to me. It’s a sweatshop operation, No Sweat,” Charney laughs. “At least we can say at American Apparel that the workers earn $26-, $28-, sometimes $35,000 a year. What does one worker get in Indonesia for 70 cents a day? A shack?”
Neiman is the first to admit his motives aren’t purely altruistic. Like Charney, he’s making a buck in a system that oppresses others. And if he did ever manage to convince a monolithic brand such as Nike to change its foul ways, that wouldn’t necessarily spell success for his own company. “If we can be perceived as having been instrumental in bringing this change about, I’m reasonably confident that we could hold on to the half-a-point of market share of progressive consumers,” Neiman says. “[But] is it possible that we could make ourselves obsolete and cease to have a reason to exist? Yeah.”
Published with the permission of the Boston Phoenix.