Labor Outsourcing: Denims, Toys, and Chocolates

China’s entry into the World Trade Organization in late 2001 transformed the country into a magnet for foreign
investors seeking low wages and lower import barriers. In 2004, China’s economic growth rate was nearly 10
percent. Two years later, the total U.S. trade with China was $231.4 billion, nearly 85 percent of which consisted of
exported goods from China. As multinational corporations and the new Chinese bourgeoisie reap the profits of
China’s trade relations, millions of workers have paid the price.

China is not the only country that can be accused of egregious human rights violations. Such violations take place
both in the United States and in other nations around the world. However, in recent years, a rising demand for
social reform, dovetailing with China’s economic changes, has been countered by particularly stringent controls
by government authorities. For instance, as access to the Internet increases worldwide, resulting in more
widespread access to information and dialogue, China has aggressively limited its citizens from discussing
politically sensitive issues online, detaining and sometimes even sentencing them to indefinite prison terms.

As China prepares to host the 2008 Summer Olympics in Beijing, repressions on progressive reforms have increased
even as the government struggles to project a positive public image. The lack of transparency within China’s police
and security forces enable the country to wield control over journalists, activists, writers, academics, human rights
defenders, critics and protesters. Corruption within the legal system makes it even more difficult for those accused to
find justice and redress.

Labor Rights and the Global Economy

As foreign investments and freer trade enabled China’s new booming economy, hundreds of millions of migrant
workers have moved to rapidly growing cities from the country’s impoverished countryside in order to find work,
mainly in factories that provide goods for export. This vulnerable segment of the population is subject to many human
and labor rights abuses, despite claims of labor reforms. Multinational corporations such as Wal-Mart claim to
perform inspections of labor conditions, but such inspections are often superficial and rife with corruption.

As seen in CHINA BLUE, workers are often required to pay for residence permits and hand over their first paychecks
as a so-called deposit. They are forbidden to strike and can be fired if they get sick. Factory workers often work in
hazardous conditions in environments rife with corruption, with little to no protection or recourse. Many are children
under the age of 15. Workers lack unemployment compensation, health insurance and pensions. National Chinese
labor laws set a minimum wage equivalent to about 31 cents an hour, but factory owners usually ignore these laws,
withholding overtime and paying workers less than half of this amount. In the factory featured in CHINA BLUE,
minimum wage is 48 U.S. cents an hour.

Because political dissent can be grounds for imprisonment, Chinese workers cannot easily form a labor movement to
fight for better working conditions. Yet even with such limitations on labor rights in China, workers persist in
protesting illegal wage deductions, dangerous working conditions and other employer violations.

In 2006, Wal-Mart allowed unionization within its Chinese stores after workers sparked a grassroots labor
organization. True reform, however, will not be possible until the Chinese government-controlled All-China Federation
of Trade Unions (ACFTU)—the only trade union allowed in the country—is truly willing to advocate for the rights of
workers, even at the expense of foreign trade monies. Independent auditors and unannounced inspections of
factories would also create a more truthful monitoring of labor environments. Because factories offering higher
wages and fewer hours can simply not compete in today’s economy, foreign investors must also be willing to pay
higher prices for goods in order to boost conditions for Chinese workers.
China Labor Watch (CLW) is an activist group based in New York. The group studies labor conditions in China’s toy
industry.
In a recent report, the group wrote: “The world of toys is a heaven for children, but (it) may be a world of misery for
toy factory workers.”
China Labor Watch released the report this month. It tells about working conditions in four toy factories in southern
China’s Guangdong Province.
Investigators say the workers are paid wages of $300 or less per month for 174 hours of work. They say the workers
make toys such as Barbie, Thomas the Tank Engine and Hot Wheels. These products are sold by Mattel, Hasbro,
Disney, McDonald’s, Wal-Mart and other large American companies.
China Labor Watch says the employees often work in dangerous conditions and are not well-trained.
The group says, “the average working hours in these four factories are 11 hours a day, with more than 50 overtime
hours a month.” Overtime is time worked in addition to regular working hours. The group said overtime totals were as
high as 130 hours in some factories.
The group said its information came from people who worked at the factories. These workers were secretly gathering
information for the group at what researchers call “relatively well-managed” factories.
Chinese laws say employees may not work more than 8 hours a day. The laws permit work hours to be extended in
some cases, but employers must be sure the workers do not become tired.
The report says employees sometimes worked 11 hours in a day with only a 40-to 60-minute lunch break. It said this
is a clear “violation of the right of workers to have adequate rest.”
The report says factory managers regularly asked workers to sign “voluntary overtime agreements.” These
agreements permit the factory to violate labor laws and regulations without fear they will be punished.
Wages too low to live on
Because the pay is so poor, almost all of the employees volunteer to work additional hours.
Worker Li Jintao told VOA: “the wages are too low. My monthly salary is $360, but after deductions for social security,
I make only a little more than $292 per month.” Workers pay a part of their wages into a social security fund, which is
used to support older people when they cannot work anymore.
Chinese laws require companies that have foreign investors to pay social security taxes for their workers. But the
CLW report says none of the factories closely followed the laws. It said one factory did not pay into the social
insurance or the housing fund for the workers. Another factory paid only a part of the money to some workers. The
report said some factories even forced the workers to agree to give up their right to receive social insurance and
housing funds.
Li left his home village at the age of 14 to work in the city. He says his monthly salary includes payment for two to
three hours of overtime every day.
The 2016 minimum wage in the cities of Dongguan and Foshan is $223 per month, while the minimum wage in
Shenzhen is $300 per month. The four factories examined by China Labor Watch are in those cities.
Workers at the factories earn about five percent more than the minimum wage. But Li says that is still not enough. He
plans to leave his job and return to his family home.
No safety training
The report said the four factories did not give safety training to workers before they began their job. And it said they
failed to give the workers safety equipment.
The report said almost all of the workers live and eat in the factories where they work. Some of the workers
complained about poor-quality food. They said their sleeping areas are old and dirty and often have uncovered
electrical wires.
Like many toy exporters in China, the factories China Labor Watch investigated have been examined by the
International Toy Association. They are part of a program called ICTI Care, a 10-year-old program that says its goal
is to protect toy factory workers.
Employers: “Conditions better than ever”
Mark Robinson is a spokesman for ICTI Care. He said the project does most of its work in China. He said it has
examined more than 1,200 toy factories in the country. The project also operates in Vietnam, India and other
countries. Robinson said it represents 66 million workers.
He says conditions in the factories are better than they have ever been. He adds that Chinese factories that are part
of the program are increasing wages.
But the China Labor Watch report said the ICTI standards violate China’s own labor rules. Li Qiang, executive
director of China Labor Watch, told VOA that ICTI is “an association backed by Mattel, Disney and Hasbro, which
(permits) factory workers to work 72 hours a week, and even 78 hours while the factory has to fill an order.”
CLW sees no improvement
Li began investigating southern China’s toy factories as an undercover laborer in 1999. He said there have been
small improvements but the “overall environment for the toy industry has not improved.”
Li said when he was working undercover, “we worked more than 10 hours a day, and it was like a prison. Now,
workers still work more than 10 hours a day.”
China Labor Watch researchers say companies that operate the factories can raise wages and improve conditions
and still be profitable. But they say most companies choose not to do so.
Disney, Mattel, and Wal-Mart did not answer VOA’s requests to give a reaction to the report.
Disney released a statement. It said, “these issues have been investigated and resolved. Disney will continue to
encourage and rely on factory owners, business associates and governments to promote safe, inclusive and
respectful workplaces where Disney-brand products are made.”
Chocolate Child Labor
20 years ago, chocolate giants pledged to eradicate child labor, but it is still happening on a wide scale.
Chocolate. That delicious treat that has become a mainstay in our lives. We use it as a romantic treat. A nourishing
superfood. A reward when we’ve accomplished something big. It is a gift. It is a tradition on holidays. And it is
everywhere.
But what if you knew that the chocolate you so enjoy came to you from the hands of a child not much older than 11?
Would you still buy it? Could you enjoy it as much? Or would you just turn around and bury your head in proverbial
chocolate-filled sand and not hear or see what was going on around you?
In a very in-depth report from The Washington Post, reporters Peter Whoriskey and Rachel Siegel found that child
labor is still widely used in the chocolate industry. Despite the deadlines and agreements from major companies
(Hershey’s, Nestlé, Mars) to remove children from the cacao farms by 2010, it has been estimated that over 2 million
children are still present there. From The Washington Post: “About two-thirds of the world’s cocoa supply comes from
West Africa where, according to a 2015 U.S. Labor Department report, more than 2 million children were engaged in
dangerous labor in cocoa-growing regions.”
These previously mentioned chocolate giants pledged 20 years ago to eradicate child labor from their farms. Given
the fact that the chocolate industry brings in at least $60 billion (The Washington Post  says $106 billion), you would
think that this would be an attainable goal. It’s been 20 years, right? The response from Hershey, Nestlé, and Mars,
when asked if child labor was used for their chocolate, was unanimous: they could not guarantee that child labor was
not used.
So what does this labor look like? Sometimes it looks like trying to support one’s family in the face of poverty.
Sometimes it looks like being stolen from one’s family. Sometimes being sold by one’s own family because of
promises of money that will never be paid. Sometimes beaten. Overworked. Underpaid. Underfed. Under sheltered.
Underloved. Underappreciated. Under the thumb of a corporate giant who makes false claims about the purity of the
source for the growth of the company. Under the wrapper of the chocolate in your cupboard, the probability that the
blood, sweat, and tears of one or more of these 2 million children exist, unrecognizable, is very high. Their trip may
begin as a bus ride from their home to the Ivory Coast, where 33% of the world’s chocolate supply is exported from.
These children may be bought, bribed, sold or are leaving voluntarily with the promise of money that, in the end,
turns out to be about 85 cents a day. The Washington Post reported that many of these kids see their families rarely,
if ever again. It is on these cocoa farms that these children arrive to perform “arduous manual labor and stay year-
round. There is land to be cleared, typically with machetes; sprayings of pesticide; and more machete work to gather
and split open the cocoa pods. Finally, the work involves carrying sacks of cocoa that may weigh 100 pounds or
more.”
Let’s break this candy chain down so we can be clear what brands are owned by these companies. Mars makes
M&M’s, Snickers, Milky Way, Twix, and Dove brand chocolates, plus 24 lesser-known brands. Hershey’s produces
Reese’s, Whoppers, York Peppermint Patties, Almond Joy, and Mounds, plus all products labeled with the obvious
Hershey’s name. Nestlé makes Butterfingers, Nesquick and all Nestlé Toll House brands of chocolate. Please, bear
in mind that these are ONLY the chocolate products these companies produce and at least one of these companies
lay claim to products in almost every category imaginable: baby foods, bottled water, cereals, confectionery, coffee,
culinary and cooking, chilled and frozen food, dairy, drinks, professional food service, health care, nutrition, ice
cream, and pet care.
Godiva could also not guarantee that children were not involved in the production of their chocolate.
In 2011, Danish journalist Miki Mistrati produced the film, The Dark Side of Chocolate. He was investigating the use
of child labor and trafficked children in chocolate production. It is filmed by U. Roberto Romano. The filming started in
Germany, where Mistrati asked if they knew the source of their chocolate. Then he and filmer U. Roberto Romano
flew to Mali, where many of the children are from. They explored the Ivory Coast where the cocoa plantations are
located. The film ends in Switzerland where both the International Labor Organization (ILO) and the Nestle
headquarters are located. Much of the footage in this documentary is recorded using a secret camera located in a
bag Mistrati carries with him. He filmed illegal child labor on these farms, including those certified by Utz and
Rainforest Alliance.
An incredible 90 million pounds of chocolate candy is sold during Halloween week, taking a strong lead compared to
other holidays. Almost 65 million pounds are sold during the week leading up to Easter and only 48 million pounds
during Valentine’s week.
On one “holiday” alone, 90 million pounds of chocolate are bought and distributed in America. In a country
where 1.25 million children suffer from diabetes, 90 million pounds of chocolate are encouraged to be ‘trick-or-
treated’ by children who may or may not be sick from sugar consumption; chocolate that has a high likelihood of
being tainted with the blood of one of the 2 million children who are involved in the growing, harvesting and
processing of cocoa.
It is possible to buy chocolate that is guaranteed to be produced without child labor and with the workers paid a living
wage. Kelly Johnson, chocolatier at ChocolaTree in Sedona, Arizona, has visited the cacao farms where he sources
his chocolate and has a relationship with the farmers that export the beans he uses to make his artisan chocolates.
Johnson’s cacao source goes beyond ‘Fair Trade’, as fair trade can be a 10% increase in money exchanged for
goods, which may not, in the case of cocoa production in the Ivory Coast, be enough to raise the farmers out
of poverty. Food Empowerment Project has compiled a list of brands that they have investigated to provide
consumers with ways to buy ethically produced chocolate. Yes, this chocolate may cost more, but this is where this
child-labor problem is stemmed from: poverty. And poverty, in this case meaning that those with the resources are
not willing to demand companies to change and pay more for a product which leads to the exploitation of children.
The Washington Post  article ends on a positive note. A small Dutch company is doing things differently. Tony’s
Chocolonely is willing to pay 40% more for the cocoa he uses, which, in the end, is an extra $520. Paul
Schoenmakers, a Tony’s company executive, says that this increases Tony’s Chocolonely prices only 10%.
“But to Schoenmakers, it’s a simple matter. ‘Nobody needs chocolate,” he said. “It’s a gift to yourself or someone
else. We think it’s absolute madness that for a gift that no one really needs, so many people suffer.’”