1. The Diff erence between Heaven and Earth 1
Introducing Alta Gracia
2. From Factory Favorite to Fighter 12
Human Cost of the “Race to the Bottom”
3. Risky Proposition, Unlikely Alliance 34
Founding a New Factory
4. Ideals into Action 57
Building an Anti-Sweatshop Model
5. Escaping Scripted Roles 78
Unexpected Benefi ts of a New Approach
6. Stories of Transformation 107
Diverse Impacts of a Living Wage
7. Surviving on Our Own 132
Adjusting the Business Model
8. Replication or Revolution 163
Alta Gracia in Context
Afterword: Taking Action 191
About the Authors 221
Apparel products are ever-present in our lives—bought, worn, changed, and discarded—with thought seldom given to the individuals who make them. Headlines sometimes report on factory fires or other tragedies that claim workers’ lives, but the apparel industry’s global span, locating most production in regions and countries with low wages far from major consumer markets, makes it easy to avoid unpleasant stories about unsafe conditions and daily worker abuse in so-called sweatshops. But this is a different story—one of hope in an industry historically marked by exploitation and one about the purposeful creation of a new type of factory: a kind of “anti-sweatshop.”
Alta Gracia was born out of an unlikely alliance between a couple of apparel industry insiders, workers, and labor advocates. To make Alta Gracia successful, each group had to step out of their normal roles. As a result, they turned the apparel industry’s business model on its head, creating the first successful anti-sweatshop in the global South dedicated to “Changing Lives One Shirt at a Time.” The new model transformed the traditionally invisible workers who make clothes into celebrity spokespeople, inspiring audiences across the United States with their stories. Factory managers usually tasked with the industry’s dirty work became deeply involved community members—people willing to take a courageous stand against opportunistic loan sharks.
This book goes inside the small community of Villa Altagracia in the Dominican Republic, Alta Gracia’s namesake and home. Here, we visit workers, hearing how they maintained hope while working at exploitative apparel jobs—and how some of their dreams are now being realized through the impact of Alta Gracia’s living wage, or salario digno. While the story itself is true, a few names have been changed for reasons of personal privacy or to protect individuals who might still be at risk of facing retribution for taking a stand.
The coauthors—an unlikely tag team of Sarah Adler-Milstein, a labor rights advocate, and John Kline, an international relations and business ethics professor—serve as guides.
Sarah’s ties to Villa Altagracia began with doing research in the town before Alta Gracia existed. She then became involved in getting Alta Gracia off the ground, and eventually served as the labor rights monitor for the factory and helping Alta Gracia achieve ongoing compliance with its groundbreaking standards. She also worked with public health researchers to document the health impacts of Alta Gracia’s living-wage and employment model.
John’s ties to Alta Gracia stem from his teaching and research on business ethics at Georgetown University’s School of Foreign Service. He achieved early agreement on access to all key parties to independently document and assess the reasons for Alta Gracia’s success or failure. His research covers both the business model and the factory’s impact on workers and their families.
Throughout the book, workers’ stories provide a rare look at what happens inside the factories that make our clothes—and what happens when those factories close and move on to the next country with even cheaper labor costs. Interviews with Alta Gracia workers provide insights into what a salario digno really means: from a life-saving operation to families reunited; first-ever bank loans to indoor plumbing; children with school uniforms to adults enrolling in night classes.
Beyond interviews, an analysis of Alta Gracia’s business plan reveals the challenges a start-up factory like Alta Gracia faced just to compete in an industry known for subpoverty wages and cutting corners. Major readjustments following the factory’s separation from its founding parent company required a reconfiguration of supply and distribution channels as well as new approaches to product and marketing. The business analysis for Alta Gracia sheds light on what is possible for industry transformation more broadly.
Chapter 1 sets the stage by looking at the broader context for Alta Gracia in the apparel industry as a whole. It covers the kinds of dangers that accompany the race to the bottom, as well as the thinking that underlines many arguments for the continued existence of sweatshops. It also introduces Alta Gracia and looks at the example it sets, particularly for existing apparel brands outsourcing labor to the global South.
Chapter 2 takes readers to Villa Altagracia before Alta Gracia was established. Readers go inside BJ&B, a hat factory producing for brands including Nike, Reebok, and Adidas, and for universities in the United States, and its workers’ attempts to organize. It also looks at how, when workers were fi red for speaking out on abusive treatment, they were able to work with U.S. labor advocates and United Students Against Sweatshops (USAS) to win reinstatement and ensure their legal rights. Later, as attention faded and brands shifted orders elsewhere, BJ&B was forced to close its doors. With high rates of unemployment, residents of Villa Altagracia faced growing indebtedness, familial strains, and health problems that drained away hope for improvement.
Chapter 3 tells how a corporate CEO and a labor organization executive reached a historic agreement to create a living-wage apparel factory—and some of their initial challenges. The chapter also looks at how an applied defi nition for a living wage as the basis for worker pay was ultimately calculated, and how Alta Gracia incorporated an even broader concept of salario digno, a wage with dignity, that recognizes labor rights and respect for workers as partners in the production process.
Chapter 4 takes readers inside the early days of Alta Gracia, to see how the model standards work—renovating the old BJ&B facilities, hiring many of its displaced workers, and forging a model approach to fair hiring in an industry where hiring is rife with abuse. It also looks at how, once the factory opens, workers are incredulous about the promises of a living wage and freedom of association, but slowly see that the commitments are real. Meanwhile unlikely allies overcome initial tension and mistrust, forging a shared commitment to Alta Gracia’s model. After celebrating its fi rst partial-year of operation, Alta Gracia confronts the challenge of turning the start-up venture into a sustainable business enterprise. Chapter 5 looks at how everyone involved has to step out of their comfort zone and take on totally new functions. At the factory, the fi rst collective bargaining agreement is negotiated; supervisors and managers go from doing the industry’s dirty work to bringing inspiration to the factory fl oor; and the union steps out of its entrenched role to promote productivity and effi ciency.
Chapter 6 documents the many ways the salario digno dramatically transforms the lives of workers, their families, and the local community as Alta Gracia turns fading hopes into realized dreams. One worker’s family starts a small business; another worker obtains her teaching degree; a third pays commuting costs so her daughter can represent the country on the national volleyball team. The chapter also looks at how the impact of Alta Gracia’s wages spreads through the community as economic multiplier eff ects are felt in construction, appliance sales, restaurants, and new bank accounts, as well as improvements in workers’ health.
Chapter 7 examines the Hanes Corporation acquisition of Alta Gracia’s parent company, Knights Apparel, just as the factory nears the operational productivity needed to break even fi nancially. The Alta Gracia factory is not included in the acquisition, but the separation requires many changes during the latter half of 2015 as Alta Gracia establishes its own U.S. offi ces, reviews its supply chain, and develops a new distribution system. The company’s president becomes CEO and eventually the sole shareholder and begins to reshape operations and renew the product line. A revised business plan sets 2016 as a major transition year, with projected market expansion yielding breakeven results or even narrow profi tability in 2017.
Chapter 8 looks at how, as it struggles to prove its competitive viability, Alta Gracia faces questions about its broader importance and whether its approach might be replicated elsewhere. The chapter examines key elements from the company’s business experience, assessing which factors are idiosyncratic and which may be replicable in other locations. More broadly, the chapter looks at what the example of Alta Gracia means for the industry—how the little living-wage factory in Villa Altagracia could lead the way to long-needed change in the global apparel industry.
The book itself closes with a few words on what stakeholders, including anyone who buys apparel as a consumer, can do to make the Alta Gracia model—a living wage, safe working conditions, freedom to organize, and legitimate independent oversight—the apparel industry’s standard.