“A year ago, in January, I had to leave my house. The distance made me and my husband separate. To be able to work I had to stay in another town from Monday through Friday evening. My kids were dispersed. Only one was living with me,” Maritza Vargas* said, speaking in her native language of Spanish. “The money I earned was so little that it only sufficed for us to eat.”
As the only breadwinner in her family and a mother of five, Vargas had struggled to make ends meet. But her life changed for the better, she said, thanks to Alta Gracia.
“Before, we had three people to a bed. Not anymore,” Vargas said. “My kids are all with me with their own spaces. I rejoined my husband and now we live in a big house and are very comfortable. My kids are able to have an education now. This is an achievement. What happiness.”
Vargas is one of 140 workers at the Dominican Republic’s Alta Gracia clothing manufacturer — the first and only factory in the world that supplies living-wage, union-made university logo apparel.
Alta Gracia apparel has been sold at UC Santa Cruz’s Bay Tree Bookstore since November of last year.
Alta Gracia is one of 30 subsidiary factories of Knights Apparel. The leading apparel supplier distributes to 350 universities in the United States. Knights Apparel Co. started in 2000 and is located in South Carolina.
The company’s union contract with Alta Gracia workers started in February last year, at the same time the factory re-opened.
Previously the factory that is now Alta Gracia was under Korean-owned BJ&B, which made apparel for Nike and Reebok. After being pressured by United Students Against Sweatshops (USAS) to let the workers have a union, the sweatshop factory closed in 2007, moving its labor to countries where workers are paid lower wages.
When it reopened, Alta Gracia established a new business model of paying workers living wages. It is yet to be seen whether or not this model will continue to expand and attract other companies, but Knights Apparel has already made a positive impact in the lives and community of citizens in the Dominican Republic.
Joana Leonido, second-year environmental studies major at UCSC and member of USAS was one of seven students from across the nation to visit Alta Gracia and live with union president Maritza Vargas for a week. Leonido described Vargas’ new house. Although her residence would be considered meager in the United States, to Vargas, her modest home is an improvement from her previous residence.
“The first floor is a furniture store,” Leonido said. “To go to Maritza’s house, you have to go up some narrow stairs, and the second floor is where the kitchen is at and all the rooms. Above that, there is another kitchen and on the outside is an office area, but it’s mainly a balcony with a small room and a straw shack. Because of the living wage they were able to afford that.”
Setting a Living Wage
The factory, located in the poverty-stricken town of Villa Altagracia, is not only the main source of employment for its residents, but pays a living wage 3.4 times the minimum wage in the Dominican Republic (DR). The Dominican Republic’s minimum wage is 85 cents, while Alta Gracia pays a living wage of $2.83 an hour.
Employees work Monday through Thursday, nine and a half hours a day. On Fridays they work six hours.
The idea to start a model factory was both for business and personal reasons, Knights Apparel CEO Joe Bozich said in an e-mail.
From a business perspective, Bozich said that current studies suggest that consumer demand for cause-related product is increasing and therefore investing in an experimental model was a good idea.
“The challenge we had to address was how to create a viable business model … that would enable us to pay our workers a living wage and respect their rights and dignity,” Bozich said. “We can do this because we are willing to take a smaller profit on each garment.”
Bozich was also influenced by personal difficulties in his life, as his diagnosis of multiple sclerosis a decade ago also served as inspiration for him.
“A series of events in my personal life led me to reflect on how fortunate I have been,” Bozich said. “It made me think about people going through the same tribulations I went through, but who did not have the resources to get the help I was able to.”
With both causes in mind, Knights Apparel adopted the living wage analysis set by the Worker Rights Consortium (WRC).
The WRC is an independent organization created by the USAS. The USAS has more than 250 chapters across the United States and Canada. The WRC monitors labor rights of workers who sew apparel sold in the United States.
The analysis studies families’ basic needs ranging from food to health care and transportation.
Outside the United States, many developing countries spend 50 percent of income on food. While average income spent on food in the United States is 4.5 percent, in the Dominican Republic it is 38 percent.
Progress in developing countries is something that has pushed Knights Apparel to take the lead in starting Alta Gracia.
“So our cause is freedom from poverty through job creation, living wages, and education,” Bozich said, “and we decided to start this cause related product in the DR because we wanted to test the theory that people will support a cause related apparel brand.”
Alta Gracia is only one of the many factories Knights Apparel owns, and is the only one to adhere to these standards.
Bozich did not comment directly as to the reasoning behind Knights decision not to start the model factory in the United States, considering the 9 percent unemployment rate.
“We decided to locate our factory abroad because most of the clothing worn in the U.S. is made overseas,” Bozich said.
Bozich said that the goal of Alta Gracia has both the worker and consumer in mind.
“We felt that it was important that we price the product so that we were not asking the consumer to pay a higher price than other brands,” Bozich said, “even though we are paying over 340 percent higher wages then we are required to pay.”
Even though many Knights Apparel factories, like many garment industries, remain in sweatshop conditions, Bozich did not address whether this model can start spreading among the rest of Knights Apparel’s factories but pointed to the fact that this factory is still an experiment.
“We hope that Alta Gracia is successful enough that we can open up additional factories in many other countries,” Bozich said. “But the project is less than one year old and ultimately its success and growth will be determined by consumer demand and support of a brand like this.”
Educating the Consumer
Industrial countries such as the United States are able to outsource due to trade agreements with a majority of developing countries.
The Dominican Republic entered in a free trade agreement with the United States in 2007, under the Central America-Dominican Republic Free Trade Agreement (CAFTA-DR). This agreement between the United States and seven countries in Latin America has eliminated trade barriers and tariffs.
Andrew Schrank, professor of political science and sociology at the University of New Mexico, specializes in Latin American political economy. He has published articles about the Dominican Republic labor policies and ministry as well as its foreign relations and agreements such as CAFTA.
Schrank said that part of the reason Alta Gracia was possible was because in the past two decades enforcement agencies in the Dominican Republic have tripled and are now run by degree-earning professionals. Many of these agencies help those who cannot afford to pay for a lawyer when trying to file a complaint.
“For all of its problems, the Dominican Republic is kind of exceptional,” Schrank said. “Over the past 20 years, domestic and international pressures really have improved their industrial and labor relations system.”
However, Schrank said that this is “not revolutionary change” for this model, given that Alta Gracia is only one small factory.
“It’s too easy for Nike, or [any other factories] to shift production to places where cost is even lower,” Schrank said.
In this sense, the Alta Gracia living-wage model becomes the exception by going beyond complying only with labor laws.
UCSC community studies professor Mary Beth Pudup points out that most factory owners compete on the basis of price and Alta Gracia is part of a competitive advantage goal.
“They’re making clothing to be sold in elite universities where the wages they’re paying are part of the marketing appeal,” Pudup said. “For this to be a global movement, it requires educating consumers, and that’s a pretty big hill to climb.”
Defying Sweatshop Conditions
Sweatshop conditions foster problems such as illegal child labor, human trafficking and immigration issues, as well as physical and societal problems that extend to disintegration of families.
Alta Gracia worker Maritza Vargas, who worked previously under BJ&B, said she worked in sweatshop conditions for 18 years.
“We suffered physical and verbal maltreatment,” Vargas said. “Sometimes the supervisors would close the doors and no one was able to go out until we finished certain orders. On one occasion, a worker in desperation to leave threw herself over a fence.”
In desperation to find jobs after BJ&B closed the factory, some workers from Villa Altagracia fell victim to human traffickers who promised them jobs. Maritza Vargas said she knows two women who were tricked into believing they would be working in an in-home care facility taking care of the elderly or children in countries like Spain. In reality, the two women were raped multiple times, after being sold in Istanbul.
“[The women] were left locked in a room,” Vargas said. “It had a computer and luckily they were able to reach people who had my contact. Then we contacted the Dominican Republic embassy in Istanbul until the police were able to find them.”
Vargas said that both workers had to have psychological help when they were found and brought back to the Dominican Republic.
“They would not come out of their house,” Vargas said. “But little by little, with help, they started adapting again.”
In having enough income to provide for their families’ basic needs, workers no longer have to leave Villa Altagracia for alternative jobs. This decreases the possibility of being trafficked, Pudup said.
“Anything that improves the working conditions and the chances for better lives at the grassroots level throughout the world, and even this country, will help undermine the economic basis for human trafficking,” Pudup said.
Theresa Haas, director of communications for the WRC said that Alta Gracia apparel is the only apparel officially endorsed by the WRC. The endorsement is part of the tag attached to the apparel.
The WRC representative in the Dominican Republic is a Brown University graduate who lives in Santo Domingo, the Dominican Republic’s capital, and visits the factory once every two weeks.
“Part of the visits includes review of payroll records to ensure that the living wage is being paid at the rate that it should be,” Haas said.
Prior to the opening of the factory or any type of hiring, each worker goes through basic health training and training about how to file a complaint.
Additionally, before and after the start of the factory, Alta Gracia was reviewed by Maquiladora Health and Safety Support Network (MHSSN) — a volunteer organization of health and safety professionals that ensure safe working conditions. One of the published articles posted under the MHSSN webpage states that Knights Apparel has been active in addressing hazardous issues brought up by MHSSN.
The WRC also works on a complaint basis in terms of addressing any type of worker allegation.
“We conduct an investigation to verify the complaint and we communicate with the brand, with the factory, with workers, and worker representatives, and we develop corrective action plan,” Haas said. “We also publish reports of all of our investigations.”
Exceptional working conditions in Alta Gracia include not having a hired supervisor. Knights Apparel chief operating officer (COO) Donnie Hodge said that the only manager there oversees through an operational standpoint.
UCSC student Joana Leonido described the manager’s work.
“The manager maintains that they meet the quota for the day,” Leonido said. “He takes care of orders, money, he works with payroll and makes sure everything goes smoothly. He mostly addresses anything by the union leaders who are the ones working with all the workers.”
With the working conditions the factory workers are given, trust can be built without implementing hierarchy, Hodge said.
“When I first went to the Dominican Republic to establish this factory … I said, ‘Every party involved in this has to be willing to be good to the project ahead of their individual needs,’” Hodge said. “There is no reason I should have to be paying supervisors to tell people to do their jobs. Working together you must ensure that the product coming out of the factory is a great product. We have a shared responsibility — all of us. It is not manager over worker.”
Universities Buying into the Model
Loud Bachata music plays over air fans rumbling in the background as the 140 workers sew apparel, cut textile, apply logo design and pack product.
“The workers know one another,” Leonido said. “They have a sense of community.”
Leonido described the working area as she showed pictures of the different work stations. At the cutting of textile area, workers use metal gloves as a safety precaution to the sharp blades of the cutting machine.
In one of the pictures, a group of workers work specifically with one apparel style. The factory has a very high ceiling where bright white lights hang. Plastic-wrapped product boxes are stacked up on the sides of the factory.
The Alta Gracia factory is the only inhabited building of 12 buildings located in the free trade zone of Villa Altagracia. Zona Franca is written on one of the street signs, signaling the border of the free zone on one of Leonido’s pictures.
While some workers take motorbikes to work, many walk 20 to 30 minutes, a distance Leonido compared to walking from Oakes College to Stevenson at UCSC.
Leonido was able to visit many of the workers’ houses as she traveled through the dirt roads. She noticed some of the village’s infrastructure.
“The sewer system is outside on the side of the road … [and] kids play in that,” Leonido said.
Many of the houses Leonido visited were on top of hills. She described some of the new materials affordable to many of Alta Gracia workers.
“Because of the living wage, they have cement floors,” Leonido said. “Before, they had dirt floors. Some people bought outhouses. They were so happy with that. They were proud.”
Joana Leonido’s first-hand experience inspired her to spread awareness in support of fair labor through this brand and hopes to establish a USAS chapter at UCSC.
Leading an unofficial meeting in January, Leonido said that many people do not realize the extent of the problems.
“This is an issue that a lot of people overlook because we don’t see the people,” Leonido said. “We forget about the struggles in developing countries. As students who are lucky to get an education at this university, it is important for us to [spread awareness] because in knowing that people out there struggle, we as students have leverage to change that.”
In effect, one of the group’s immediate goals is to increase demand for Alta Gracia apparel at UCSC’s bookstore. The unofficial group’s actions have been classroom presentations and tabling at Quarry Plaza.
“After presenting to the Student Union Assembly, a resolution passed through University of California Student Association to officially support living wage apparel,” Leonido said.
Two years before the factory opened in February last year, Knights Apparel CEO Joe Bozich, and COO Donnie Hodge spoke periodically with many bookstore managers in order to see if they would support this brand. Bay Tree Bookstore executive director and member of the UC Code of Conduct Committee Bob McCampbell said many were excited with this idea.
Hodge said that in providing university apparel, they try to be in compliance with students’ concerns.
“We are very active in social compliance,” Hodge said. “It is specifically addressing the need identified by students in the university campuses — that they would like to have a brand that defines this living wage.”
Bay Tree Bookstore, like the rest of the UC bookstores — except for Berkeley, which is under Follet Company — is an independent bookstore, meaning it buys directly from Alta Gracia. Barnes & Noble and Follet act as the middlemen, buying from Alta Gracia.
McCampbell said that of the Alta Gracia apparel bought in November last year, only 33 percent has been sold.
McCampbell said that some of the reasons for why Alta Gracia’s apparel does not sell as well as other brands even though it is similarly priced lies behind its lack of variety in products and better logo design.
“They’re not flying out the door,” McCampbell said. “It is not a full-blown operation [and the factory] is still requesting a higher minimal order than we’re accustomed to.”
Regardless, McCampbell said that the bookstore will continue pushing this apparel and will continue to support the brand. He is currently waiting to see the new designs even though the factory has not yet hired a sales representative, who would be in charge of presenting the physical material to its suppliers.
UCSC’s second order will be of $25,000.
The Viability of the Alta Gracia Model
In order for the model to have a “demonstration effect,” activists need to show how market and labor strategies can work efficiently and simultaneously, UCSC community studies professor Mary Beth Pudup said.
“Genius is to combine the shock in labor politics, improve working conditions, benefits and pay with a market that is willing to absorb this cause,” Pudup said. “What would be terrific is if paying living wages becomes a competitive advantage.”
Schrank, professor at the University of New Mexico, credits the country’s “tremendous stretch” in labor enforcement.
“The Alta Gracia factory is part of that … in a symbolic way,” Schrank said.
For Schrank, a real and expansive change needs to start with the enforcement and fortification of the government’s labor policies in any country.
“The real game changer is getting the labor ministry to change labor laws, rather than fighting plant to plant battle,” Schrank said. “A better bet is putting your energy into trying to force these countries to comply with international obligations.”
Because Alta Gracia is the only unionized and living-wage factory and endorsed through the WRC, it also draws light to the hundreds of factories worldwide still under minimum wage or sweatshop conditions.
Joana Leonido says that this may create confusion for consumers in choosing to support Alta Gracia.
“That’s one argument against Knights Apparel because it isn’t all sweatshop-free like many other companies, but at the same time it is the only one that started this model,” Leonido said. “If we support Alta Gracia, it is going to be a model for other companies to create living wage factories.”
Universities across the nation are working in similar efforts to keep this living-wage factory running. “Will College Loyalty Embrace ‘Living Wage’ Sweatshirts?” is the title of Georgetown University’s professor John M. Kline’s research report published in August of last year. The report, which examines Alta Gracia, exposes the possibility for other apparel factories’ momentum to turn to Alta Gracia’s example and change the way they address human rights and labor.
“The approach goes above and beyond the labor standards required by most university licensing codes, marking a path toward a more humane and sustainable way out of poverty for apparel workers,” Kline said in the article’s abstract. “If enough consumers care, corporations could be challenged to engage in a ‘race to the top’ to brand products based on good workplace conditions rather than an association with famous celebrities.”
Leonido acknowledges the high unemployment rate in the United States, but said the Knights Apparel model has the potential to spread.
“I feel that [Knights Apparel] is stepping up to other companies in saying that living wage in a developing country can work,” Leonido said. “But I do feel that if that succeeds, Knights needs to bring this model back to the U.S., because we need it here.”
*Maritza Vargas’ quotes have been translated by the writer.
