Corporate Corruption and Greed and Income Redistribution in Guatemala

According to a report from the Institute for Global Labor and Human Rights, the sweatshop factory Alianza has closed its doors, ripping off its workers of some $6 million. These workers earned $1.05 per hour, and the factory owners made off with a ton of their money.

According to the report,

From 2001 through March 22, 2013, 1,050 to 1,500
workers, mostly indigenous Maya Indian, toiled at the
Alianza Fashion factory in Chimaltenango, Guatemala.

• 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).

• Over 60 labels and retailers — some of them powerhouses
like Macy’s, JCPenney, Kohl’s and Philips-Van
Heusen — were produced in the factory. In 2011 alone,
Alianza workers sewed 4.2 million garments, and over
the course of 12 years some 52 million garments
were exported to the U.S. and Canada.

• The workers earned a base wage of just $1.05 per
hour, which is the lowest wage in Guatemala and well
below subsistence levels.

These corporations had huge markups in their prices. The bigger the markup, the better for Wall Street and these companies. This is precisely why Wall Street Senator Ron Wyden likes free trade treaties. Many of these jobs used to be in the United States, but after companies shipped the jobs to overseas sweatshops, the markup increased. In other words, the free trade treaties that paved the way for US corporations to ship millions of jobs overseas has been nothing but an income redistribution scam, thanks to Wyden, and other like-minded Republicans and Democrats.

“• A Wal-Mart women’s blazer retailed for $21.88,
while its total production cost was just $4.25 — for
a mark-up of 415 percent.!
• Calvin Klein jackets and vests for the Burlington
Coat Factory cost $9.23 to make, but retail
for $59.99 — a mark-up of 550 percent.”

Major corporations got major financial breaks, according to the report.

“• Lavish 100% tax breaks saved the Alianza factory
and major U.S. labels millions of dollars.
• The Guatemalan Ministry of Labor is dysfunctional
and does nothing to implement Guatemala’s
labor laws or internationally recognized worker
rights standards.
• For 12 long years, the labels and retailers at Alianza
never once sought to guarantee that fundamental
worker rights standards would be respected. Workers
had no legal rights whatsoever and every attempt to
organize was crushed.
• Philips-Van Heusen, Nordstrom and others are launching
a proactive campaign to reimburse Alianza’s workers
what they are owed.
• “From the very beginning at the Alianza Fashion factory,
management’s policy was to plunder the workers
in every way possible — robbing the workers of over
$6 million in back wages and benefits over the years,
in collusion with corrupt Social Security Institute and
Ministry of Labor officials who totally failed to defend
the rights of the workers,” said Gabriel Zelada, director
of Center for Studies and Support for Local Development
(CEADEL).”

Below is a list of corporations that took advantage of the workers at the Alianza factory in Guatemala.

AAFES (Army and Air Force Exchange
Service)
Alfani
American Apparel Global Corp
Bealls Florida
Bedford
Belk
Blair Catalogue
Bon-Ton
Boscov’s
Briggs New York
Burlington Coat Factory
Calvin Klein
Carole Wren Inc
Catherines
Cato Corp
Charlotte Russe
Charming Shoppes
Dickie’s
Dillard’s
Dressbarn
Fashion Bug
Fishman & Tobin / Li & Fung
Fred Meyer
Harvé Benard
HeartSoul
Hudson Bay Company
Ike Behar
J.C. Penney
J.M. Collection
Jones Apparel Group
Judy’s Group (Emily, NYP Suits)
Kellwood
Kim Rogers
Kohl’s
Koret
La Maison
Macy’s
Marshall’s
Wakefield’s
Meijer
Minikin Togs
NBC (National Broadcasting Corporation)
Nordstrom
Norton McNaughton
Peebles
Philips Van Heusen
Ross Stores
Sag Harbor
Stage Stores
Stein Mart
Style & Co.
The Men’s Warehouse
Tommy Hilfiger
Tracy Evans
Tribal
VF Outlet
Von Maur
Wal-Mart
Winners Apparel

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