In 2010, the corporate management of Knights Apparel Inc. and the activists behind the Worker Rights Consortium (WRC) embarked on an experiment together. They wanted to see whether it was possible to run a viable apparel company while maintaining relatively high labor conditions for workers in the developing world. The result was the Alta Gracia factory in the Dominican Republic, where all the workers are enrolled in a union and are paid more than three times the country’s legal minimum wage.
Four years later, the experiment isn’t over yet, but the initial results are promising. Surveying the Alta Gracia project’s development thus far, a new Georgetown University report concludes the factory “is assuming the attribute of a stable business.” Barring unforeseen circumstances, the report’s authors project that the factory could begin turning a profit by as soon as next year. In other words: Knights Apparel and WRC may be proving that it is possible, under certain circumstances, to run a successful clothing factory in the developing world without depriving the factory’s employees.
“It’s demonstrated the viability of producing apparel in a much more humane manner, with a living wage paid to workers and with respect to giving workers a role in the way their workplace functions,” said WRC executive director Scott Nova. “And it’s demonstrated that you can do that and still produce apparel efficiently and at a reasonable price.”
Although Knights Apparel owns and runs the factory, WRC closely monitors working conditions there by prior agreement with the company. The same prior agreement also set Alta Gracia’s initial base wage at 340% the legal minimum wage in the Dominican Republic’s free trade zones. Just a couple months after Alta Gracia opened, the workers there formed a union.
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Knights Apparel markets clothing produced by Alta Gracia mainly to universities, where they highlight factory working conditions as a key selling point. On its website, the factory describes itself as a “living wage company” and employs the slogan “Feel good. Make a difference.” Campus anti-sweatshop groups also sometimes participate, encouraging university administrations and other retailers to stock their shelves with what they say is a more ethical product. As a result, the Georgetown University report says Alta Gracia posted $11 million in sales last year, and is on track to earn as much as $16 million in sales by the end of this year.
But financial data is only one part of the story. Edward Soule, one of the Georgetown researchers behind the report, said he was struck by the deep psychological impact that the Alta Gracia project seemed to have on the factory’s employees.
“When you get to know the people working in that factory, you get a sense that they have been bullied their entire lives,” he said. “They’re generally women coming up through the cut and sew factories, and that’s their life. Then all of a sudden that’s all swept away, all the humiliation. It’s not just the low pay, it’s the humiliation, the grinding challenge of living in poverty.”
By agreeing to pay high wages from the start, Alta Gracia changed the basic terrain of labor-management relations. With compensation off the table, contract negotiations between management and the union were “not a contentious process,” according to Soule. And without a management philosophy based on squeezing maximum productivity out of workers in exchange for minimum compensation, the atmosphere in the factory is by all accounts relatively peaceful. The factory somehow manages to stay productive without being a pressure cooker.
“It’s night and day,” said Nova. “It’s not just the fact that they’re getting paid three times the amount they’d normally get paid, with all the implications that has for how they and their family live. It’s also just the nature of the workplace. You hear it when you talk to workers about the workplace being a vastly different place to be than in a normal apparel factory.”
The question is whether the model is replicable elsewhere. By Nova’s own admission, part of the reason for WRC’s collaboration with Knights Apparel was the challenge of pressuring preexisting factories into changing their business practices. Starting a new factory from scratch wasn’t easy, but it was easier than trying to transform the entire industry.
Still, the difference in the lives of individual Dominican workers cannot be denied, to hear Nova tell it. And higher pay is just the beginning.
“In English, we use the phrase ‘living wage,’” he said. “In Spanish, in the Dominican Republic, they say salario digno: salary with dignity.”
Ned Resnikoff is an urban policy analyst, researcher, writer, and editor. His byline has appeared in a variety of publications, including the New York Times, San Francisco Chronicle, Dissent, and The Nation. He writes the newsletter Public Comment, which can be found at publiccomment.blog.