That trouble grew from seeds sown in the days of Arnold Rothstein. Organized crime found new opportunities after the 1926 strike. Gangsters began to muscle their way into unions through bribery, threats, and violence. Officials who refused to go along got visits from hard-faced men demanding cooperation—or else. That “or else” spelled a beating, a smashed kneecap, or a bullet. Cooperation, in turn, opened a union’s purse wide. Organized crime collected a monthly “fee” for each member. Burrowing deeper, it looted welfare and pension funds, even put its own men into union posts. Some officials were outright crooks, stealing from their own members.
Meanwhile, gangsters gained control of garment companies themselves. Manufacturers had lost a fortune during the 1926 strike. Hungry for cash to restart their businesses, they turned to the loan sharks. Those loans allowed the likes of Arthur “Dutch” Schultz, a brutal gunman, to gain a foothold in the industry. Gangsters offered “insurance” against strikes by gang-controlled unions. For a price, they promised “protection” against “accidents,” like factory fires after midnight and acid spills on bolts of expensive cloth. The racket paid well. At the height of his power in the 1930s, Dutch Schultz made ten million dollars a year—until a bullet ended his career in a restaurant toilet. The shooter was from Murder Inc., a group of hired killers from Brooklyn.
Organized crime was rampant in New York in the 1920s and 1930s. This police department photo shows three New York City gangsters. (picture credit 7.3)
“Dutch” Schultz, posing for the camera after a brief stay in jail, in 1935. (picture credit 7.4)
In 1957, Carlo Gambino became the most powerful man in the Garment District. Gambino was a mafioso—that is, a member of the Mafia, a secret criminal society that began in Sicily centuries ago. The Gambino crime “family,” the country’s largest, used its hold on unions to take over the trucking companies that served the Garment District. In doing so, they prevented manufacturers from getting deliveries of raw materials or shipping finished goods to dealers and stores. Any trucking company that refused to share its business with them had an unexpected strike, a rash of slashed tires, or bombings. Once they gained the upper hand, gangsters demanded kickbacks, part of the value of the goods shipped, from manufacturers and truckers alike. This placed a huge, illegal “tax” on the garment industry. For example, a dress that should have cost fifteen cents to ship cost forty cents. To put it another way, the consumer paid an extra $3.50 on every $100 clothing purchase.5
In the early 1990s, the New York Police Department, Manhattan district attorney, and Federal Bureau of Investigation went all out to defeat organized crime in the Garment District. To get evidence, detectives posed as union officials and garment company executives. Police technicians got court orders allowing them to break into suspects’ homes and offices. Once inside, they planted wiretaps, electronic devices attached to telephones, and “bugs,” tiny hidden microphones, to overhear and record conversations. Eventually, they gathered enough evidence to convict corrupt union leaders and organized crime bosses. With gangsters driven from the Garment District, workers could get what they deserved from their unions, while shipping costs fell. By then, however, the damage had been done. The industry, already weakened, was suffering from deeper problems that continue to this very day.
Return of the New York Sweatshop
The numbers tell a sad tale. In 1950, over 95 percent of America’s clothing was made in the States, chiefly in New York City. By 1980, foreign imports made up half the clothing sold in this country. In 2009, only 5 percent of our clothing was American-made. What happened?6
If organized crime drove many companies from New York, foreign competition threatened their very existence. Over the years, the United States had lowered or ended most tariffs—that is, the taxes a government charges on imported goods. As a result, foreign-made clothing began to flood into the country. While strong American unions tried to keep wages high, foreign producers had to deal with only weak unions or none at all. Thus, their labor costs stayed low. This was a key advantage, for it allowed them to charge lower prices than those for American-made goods of equal quality. For example, in the year 2000, New York gave the contract to make police uniforms to a Chinese company. Uniforms made on the other side of the globe were cheaper than those made right there, in the city.7
The Garment District in the 1950s, when most of America’s clothing was produced at home. (picture credit 7.5)
Unable to compete, American firms closed their doors or moved their manufacturing operations overseas to take advantage of lower labor costs. Inevitably, their employees felt the pinch. In 1990, New York had 139,000 workers making men’s, women’s, and children’s clothes. Ten years later, its garment factories employed fewer than fifty thousand workers—a number that keeps falling. New York is now a fashion center, where more people design and market clothes than make them.8
Meanwhile, small firms unable or unwilling to move their operations overseas had to cut costs to survive. The best way to do that was to have a large labor force willing to accept low wages. Luckily for small firms, history is repeating itself.
A Chinese proverb says, “First comes the bitterness, then there is sweetness and wealth and honor.” In other words, bearing hardships today can pay off tomorrow. So it had been with the new immigrants of the early 1900s. Eventually, better wages and working conditions created opportunities for them and, more important, their children. By the 1960s, most Italian and Jewish families had left Little Italy and the Lower East Side for other neighborhoods. Once the backbone of the garment industry, these families also moved upward in society, into the middle class. They achieved the American dream, educating their children, producing scientists, doctors, lawyers, members of Congress, even justices of the U.S. Supreme Court.
From the 1960s onward, America experienced a “new” new immigration. Unlike the earlier southern and eastern Europeans, these newcomers were Asians—Chinese, South Koreans, Pakistanis, Vietnamese—Puerto Ricans, Hispanics from Central America, and blacks from the Caribbean islands. Between 1966 and 1979, over one million legal immigrants entered New York alone, and possibly an equal number illegally. It was a perfect fit: their need for jobs matched small garment manufacturers’ need for low-wage workers. The result was a rebirth of the underground sweatshop in New York.
According to the U.S. Department of Labor, 4,500 of the city’s 7,000 garment factories are sweatshops. It is easy to open a sweatshop. “The equipment is really just a few sewing machines,” says Ginny Coughlin, a labor rights activist. “Just rent space, pay the electric bill, and you’re in business.” Sweatshop workers always earn less than the minimum wage set by law. Often they work in the same Lower East Side buildings that housed sweatshops a century ago. Chinese sewing machine operators in the Chinatown section, just south of Little Italy, work from sixty to one hundred hours a week. Sweatshops are hard to eliminate. No sooner do inspectors close one than it reopens at another address. Luckily, we have not seen anything like the Triangle Fire. So far.9
Sweatshops in the Developing World
Sweatshop conditions in the developing world differ little from those at the Triangle Waist Company a century ago. That tragedy awakened America’s conscience, leading to improvements in factory safety. Today, private groups—the National Labor Committee, United Students Against Sweatshops, International Labor Rights Fund—try to raise American awareness about sweatshops overseas. Labor rights activists denounce these as harsh and cruel, a sin upon the heads of the greedy, who gain by exploiting the weak.
Asian women in a New York City sweatshop, 1981. (picture credit 7.6)
Congress has passed laws against importing goods made by low-paid workers in unsafe and unsanitary conditions. Boycotts and bad publicity have hurt American firms that make garments in foreign factories, some of which are really large sweatshops. In 1996, for example, activists embarrassed television talk show host Kathie Lee Gifford. They revealed that factories in Honduras were making her “Ka
thie Lee” clothing line, featured at Wal-Mart stores across the country. These factories, supposedly, paid thirty-one cents an hour for fifteen-hour days in poorly ventilated buildings surrounded by barbed wire and armed guards. Shocked at the news, Gifford became a foe of such factories, especially their use of young children.10
Others have a kinder view of the role of sweatshops in the developing world. Economists Jeffrey D. Sachs of Harvard University and Paul Krugman, winner of a Nobel Prize in economics, argue that they serve a useful purpose. “My concern,” says Sachs, “is not that there are too many sweatshops but that there are too few.” For, he insists, they are the price a nation must pay for economic development and a higher standard of living. He also argues that labor rights activists may harm the very people they want to help. Banning child labor or closing sweatshops throws poor people out of work. When, for example, garment factory owners in Bangladesh, a South Asian nation, were forced to fire child workers, the children had no place to go. To survive, many lived on the streets as beggars. Many others became prostitutes or starved.11
Life is such that we cannot always choose between the good and the bad. Sometimes, we must choose between the awful, the bad, and the less bad. In India, Paul Krugman notes, poor farm families may face slow starvation, an awful death. Out of desperation, parents may decide to sell a child to a gang of beggars, who blind him or injure him in other ways to gain sympathy from passersby in the streets. “If this is the alternative,” Krugman says, “it is not so easy to say that children should not be working in factories.”12
Hourly wages in garment factories in developing countries vary: Bangladesh ($0.13), Vietnam ($0.26), Indonesia ($0.34), China ($0.44), Haiti ($0.49), Dominican Republic ($1.62). Yet that is not as bad as it may seem, because workers in other fields, the majority, often earn far less. In Haiti, Vietnam, and the Dominican Republic, for example, garment workers earn three to seven times the national average. While the wages are low by standards in the United States (where the minimum hourly wage is $7.25), the cost of living is lower in developing countries, so earnings often go further than they would here.13
Conditions in sweatshops are usually better than workers had ever known, economists note. They are less strenuous than planting rice, where farmers work knee-deep in water from sunup to sundown, bending down to place each seedling in the mud. Thus, for many in developing countries, factory work is highly desirable.
While visiting a garbage dump on the outskirts of Phnom Penh, Cambodia, New York Times reporter Nicholas D. Kristof saw vast fields of rotting, burning filth. Barefoot children ran about, gathering old plastic cups to sell to recyclers for five cents a pound. “I’d love to get a job in a factory,” said Pim Srey Rath, a nineteen-year-old woman. “At least there, work is in the shade. Here is where it’s hot.” In other words, a sweatshop, bad as it might be by American standards, is less bad than a garbage dump.14
Another example. In a village in Thailand, newspaper reporters asked Mongkol Latlakorn, a farm laborer, if he had any children. He did—daughter Darin, fifteen, a bright, pretty girl who quit school to work in a garment factory in Bangkok, the nation’s capital. She earned two dollars a day for a nine-hour shift, six days a week. “It’s dangerous work,” Mongkol said. “Twice the needles went right through her hands. But the managers bandaged her hands, and both times she got better again and went back to work.”
“How terrible,” the reporters said, shocked.
Mongkol disagreed. “It’s good pay,” he said. “I hope she can keep that job,” as it was better than any she could get in the village. For Darin, a factory job was a great improvement in her life and that of her family, whom she helped support.
“Asian workers,” the reporters note, “would be aghast at the idea of American consumers boycotting certain toys or clothing in protest” against sweatshop conditions. “The simplest way to help the poorest Asians would be to buy more from sweatshops, not less.”15
A garbage dump in Cambodia, with a youngster scavenging, 2005. (picture credit 7.7)
Still, too many factory workers in developing countries endure conditions not unlike those Frances Perkins’s investigators found after the Triangle Fire. Even so, hard, low-paying jobs may offer a “step up,” a way of improving one’s life or the life of future generations. In America, unions, the right to vote, reformers, and sympathetic politicians like Al Smith gave force to the immigrants’ cry for change. But change did not come quickly, or easily, or without a tragedy to awaken public outrage. Sadly, this history may be repeating itself in the developing world.
To illustrate this, we will focus on Bangladesh, though realizing that other developing nations face similar problems. Bangladesh is a South Asian nation of 162 million people bordered almost entirely by India. With an average yearly income of about $520 a year in 2008, Bangladesh is one of the poorest countries in the world. Having few natural resources, it depends heavily on farming. However, industry is growing rapidly, due to its large low-wage labor force. This is especially true of the manufacture of clothing and textiles, the country’s most valuable export.
Bangladesh’s garment industry employs over three million people, 90 percent of them young women, in more than four thousand factories. Overcrowded factories have poor ventilation and inadequate toilet facilities. Petty fines cheat workers of earnings, there is no extra pay for overtime, and workers seldom get their pay on time. Hired thugs beat up union organizers and terrorize workers who speak out against abuses. Garment workers have been clubbed, even killed, for stealing a T-shirt.16
The Triangle Fire has replayed itself in another way, too. Bangladesh’s garment factories have an awful fire safety record. Between 1990 and 2005, some three hundred workers died and two thousand were injured in garment factory fires there. This is because many plants lack sprinklers and never hold fire drills. In some, employers lock exit doors or block them with boxes, barrels, and crates.17
Bangladesh’s deadliest factory fire was almost a mirror image of the Triangle disaster. It happened at the KTS Textile Mill in the city of Chittagong, a seaport on the Bay of Bengal. On February 23, 2006, some five hundred workers were on the night shift when an electrical generator exploded on the first floor of the three-story building. Seconds later, fire spread to barrels of chemical dyes and stacks of yarn. Flames lapped out of windows, igniting fires on the floors above.
Security guards had locked exit gates to prevent workers from coming late and leaving early. “When the fire erupted,” a survivor said, “I was working on the second floor. Of the two gates on the floor, one was padlocked. Finding it impossible to come out through the milling crowd at the other gate, I jumped out through a window on the roof of a nearby two-story building. Some local people standing on the rooftop of that building broke open the window and helped us out.”
Panic spread. Trapped by a rolling wall of fire, many leaped from windows, their hair and clothes burning. In all, ninety-one died, suffocated, burned, or smashed against the pavement. Most were teenage girls, some as young as twelve, thirteen, and fourteen. Outraged workers held protest rallies to demand improvements in factory safety. Rallies and pressure from Bangladesh’s overseas trading partners, particularly the United States, persuaded the government to order safety improvements.18
However, these still have a long way to go. People still lose their lives in fires in Bangladeshi garment factories. On February 26, 2010, flames engulfed the Garib and Garib Sweater Factory near Dhaka, the capital, killing twenty-one and injuring forty workers. It was the same old story. “Everyone working on the factory’s top floor died because exit gates were locked; they were all women, they were all trapped and they all suffocated,” said a report.19
If the Bangladeshi experience teaches anything, it is that short memories and greed are a deadly mixture. When things are going well, we are likely to forget the past. Short memories are dangerous, because they allow greed to take control. The result is disaster. Thus, eternal vigilance truly is the price
of liberty and safety.
That is the lasting lesson of the Triangle Fire.
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