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September 1995, Volume 2, Number 9

Regulating the Immigrant Labor Market

A federal-state task force raided a garment factory in Los Angeles and found 70 Thai immigrants living and working in a fenced seven-unit apartment complex that they could not leave. According to the workers, most worked 84 hours weekly sewing garments for wages that averaged $1.60 per hour, far less than California's $4.25 minimum hourly wage. The workers had the cost of smuggling them to the US deducted from their pay.

The apartment complex's owner as well as neighbors said they did not suspect that the fenced apartment complex was an illegal sweatshop that held workers inside against their will. The nine Thai operators and guards at the complex have been charged with a variety of immigration and labor law violations that carry penalties of up to $3 million and 30 years in jail; $750,000 in cash and gold was found in the factory, some of which may be used to pay workers who were not paid the minimum wage to which they were entitled.

The Thai workers were granted six-month temporary work permits so they can support themselves until they appear as witnesses in the trial of sweatshop operators. After the trial, they are supposed to be deported back to Thailand.

California labor authorities subpoenaed records from two department store chains, Mervyn's and Wards, to determine if they knowingly dealt with the unregistered factory, which did business as SK Fashions. It is illegal to operate a sewing factory in a residence. The stores may be liable for back wages, since SK was an unregistered contractor.

California Governor Wilson attacked the Clinton Administration for not cracking down on sweatshops that employ illegal immigrants.

In 1994, Governor Wilson vetoed a bill which would have automatically made the beneficiaries of work done in sweatshops liable for labor law violations committed there. According to Wilson, "it is plainly inequitable to hold manufacturers liable for the acts of separate and independent businesses when they have no control over their actions."

A California Senate committee reapproved the bill that would make garment manufacturers liable for the labor law violations by a 4 to 3 committee vote on August 30. Farm worker advocates and others concerned about vulnerable immigrant workers have been seeking to have the beneficiaries of the immigrant workers labor be liable for the labor and immigration violations of their subcontractors.

The INS investigated the factory in 1992, but the local federal attorney refused to ask a court to issue a search warrant, so the INS did not pursue its investigation. The federal judge to whom the case was first assigned has indicated that she will probably step aside because she was a federal prosecutor when the federal attorney's office in 1992 decided not to search the complex. California labor law officials eventually investigated and discovered the Thai workers being held against their will.

There were 19,000 ethnic Thais in Los Angles County, according to the 1990 COP, but there may be more immigrants from Thailand among those who identified themselves as ethnic Chinese even though they immigrated from Thailand.

The publicity generated by the sweatshop raid in Thailand is allegedly encouraging more illegal Thai immigration to the US. The raid and prosecution has bee widely publicized in Thailand, where officials report that "It sounds pretty good to Thai people to stay in a room with a spring bed, instead of a mat, and with air conditioning."

The wages paid in the sweatshop, reported in Thailand to be about $15 for a 10 hour day, are "pretty good by Thai standards." Thais interviewed in Thailand hoping to migrate to the US reportedly "don't believe things are that bad." The Thai Office for the Protection of Thai Nationals Abroad was not greatly concerned about the Los Angeles sweatshop, and Thai authorities are reportedly not actively helping the INS to investigate the Thai end of the case.

The minimum wage for the 1.2 million garment workers in Thailand is $6 per day, but many women reportedly work 16-hour days for $3 to $4. The fact that it was falsely reported in Thailand the Thai workers were to have "green cards" until the trial is over has allegedly increased interest in migrating illegally to the US.

On August 23, INS agents discovered three more sweatshops, unregistered factories that employed 56 illegal Asian workers smuggled into the US by Asian smuggling rings to sew garments for contractors who supply major retailers such as JC Penny. In California, garment manufacturing is a $46 billion industry that involves 4000 legal, and perhaps another 1,000 illegal, workplaces and 125,000 workers.

Some immigrant worker advocates are concerned that highly publicized raids will drive garment shops further underground. The raids have highlighted the difficulties involved in simultaneously enforcing immigration and labor laws.

US Labor Secretary Robert Reich called on major garment retailers to participate in an industry summit on September 12 in New York to develop protections for garment workers. A 1994 study found that over 70 percent of the nation's garment factories paid at least some of their workers less than minimum wages, that 80 percent did not pay all of the overtime wages that they were required to pay, and that 90 percent had health and safety violations.

The IRS has begun to crackdown on workers who are paid as independent contractors so that their employers can avoid payroll taxes that add 10 to 20 percent to wage costs. Texas A&M admitted on August 15 that it wrongly paid 400 farm workers employed at 10 of the university's 18 agricultural experiment stations as independent contractors.

The IRS estimated in 1987 that almost 4 million of the then 110 million employed workers in the US were unlawfully being paid as independent contractors.

The single most labor-intensive activity in US agriculture is the harvesting of about 300,000 acres of raisin grapes near Fresno, California--some 50,000 workers are employed from mid-August to the end of September to cut bunches of grapes and lay them on paper trays to dry. The workers doing this "bottom of the farm job ladder" work are increasingly non-Spanish speaking Indians from southern Mexico and Guatemala.

Many of the "new-new" migrants are Mixtec Indians from the southern Mexican state of Oaxaca. There may be as many as 50,000 Mixtec Indians in California and, in a sign of the times, one school district that teaches children in Spanish hired a non-English speaking teacher's aid to translate between Mixtec and Spanish.

John-Thor Dahlburg, "Sweatshop case dismays few in Thailand," Los Angeles Times, August 27, 1995; James Steingold, "Crime Rings Tied to Sweatshops," New York Times, August 25, 1995; Seth Mydans, "A New Wave of Immigrants on the Lowest Rung in Farming," New York Times, August 24, 1995. Kenneth Noble, "US Asserts Big Retailers Buy Products in Sweatshops," New York Times, August 15, 1995. "The profits of sin: immigration," The Economist, August 12, 1995. Kenneth Noble, "Thai workers held captive, officials say," New York Times, August 4, 1995. George White, "Factory may face slavery charges," Los Angeles Times, August 3, 1995.