Part 6 (1/2)

The Philippines' experience of ”industrialization in brackets” is by no means unique. The current mania for the EPZ model is based on the successes of the so-called Asian Tiger economies, in particular the economies of South Korea and Taiwan. When only a few countries had the zones, including South Korea and Taiwan, wages rose steadily, technology transfers occurred and taxes were gradually introduced. But as critics of EPZs are quick to point out, the global economy has become much more compet.i.tive since those countries made the transition from low-wage industries to higher-skill ones. Today, with seventy countries competing for the export-processing-zone dollar, the incentives to lure investors are increasing and the wages and standards are being held hostage to the threat of departure. The upshot is that entire countries are being turned into industrial slums and low-wage labor ghettos, with no end in sight. As Cuban president Fidel Castro thundered to the a.s.sembled world leaders at the World Trade Organization's fiftieth-birthday celebration in May 1998, ”What are we going to live on?...What industrial production will be left for us? Only low-tech, labor-intensive and highly contaminating ones? Do they perhaps want to turn a large part of the Third World into a huge free trade zone full of a.s.sembly plants which don't even pay taxes?”29 As bad as the situation is in Cavite, it doesn't begin to compare with Sri Lanka, where extended tax holidays mean that towns can't even provide public transportation for EPZ workers. The roads they walk to and from the factories are dark and dangerous, since there is no money for streetlights. Dormitory rooms are so overcrowded that they have white lines painted on the floor to mark where each worker sleeps-they ”look like car parks,” as one journalist observed.30

Jose Ricafvente has the dubious honor of being mayor of Rosario. I met with him in his small office, while a lineup of needy people waited outside. A once-modest fis.h.i.+ng village, his town today has the highest per capita investment in all of the Philippines-thanks to the Cavite zone-but it lacks even the basic resources to clean up the mess that the factories create in the community. Rosario has all the problems of industrialization-pollution, an exploding population of migrant workers, increased crime, rivers of sewage-without any of the benefits. The federal government estimates that only 30 of the zone's 207 factories pay any taxes at all, but everybody else questions even that low figure. The mayor says that many companies are granted extensions of their tax holiday, or they close and reopen under another name, then take the free ride all over again. ”They fold up before the tax holiday expires, then they incorporate to another company, just to avoid payment of taxes. They don't pay anything to the government, so we're in a dilemma right now,” Ricafrente told me. A small man with a deep and powerful voice, Ricafrente is loved by his const.i.tuents for the outspoken positions he took on human rights and democracy during Ferdinand Marcos's brutal rule. But the day I met him, the mayor seemed exhausted, worn down by his powerlessness to affect the situation in his own backyard.31 ”We cannot even provide the basic services that our people expect from us,” he said, with a sort of matter-of-fact rage. ”We need water, we need roads, we need medical services, education. They expect us to deliver all of them at the same time, expecting that we've got money from taxes from the places inside the zone.” ”We cannot even provide the basic services that our people expect from us,” he said, with a sort of matter-of-fact rage. ”We need water, we need roads, we need medical services, education. They expect us to deliver all of them at the same time, expecting that we've got money from taxes from the places inside the zone.”

The mayor is convinced that there will always be a country-whether Vietnam, China, Sri Lanka or Mexico-that is willing to bid lower. And in the process, towns like Rosario will have sold out their people, compromised their education system and polluted their natural resources. ”It should be a symbiotic relations.h.i.+p,” Ricafrente says of foreign investment. ”They derive income from us, so the government should also derive income from them.... It should have been a different Rosario.”

Working in Brackets So, if it's clear by now that the factories don't bring in taxes or create local infrastructures, and that the goods produced are all exported, why do countries like the Philippines still bend over backward to lure them inside their borders? The official reason is a trickle-down theory: these zones are job-creation programs and the income the workers earn will eventually fuel sustainable growth in the local economy.

The problem with this theory is that the zone wages are so low that workers spend most of their pay on shared dorm rooms and transportation; the rest goes to noodles and fried rice from vendors lined up outside the gate. Zone workers certainly cannot dream of affording the consumer goods they produce. These low wages are partly a result of the fierce compet.i.tion for factories coming from other developing countries. But, above all, the government is extremely reluctant to enforce its own labor laws for fear of scaring away the swallows. So labor rights are under such severe a.s.sault inside the zones that there is little chance of workers earning enough to adequately feed themselves, let alone stimulate the local economy.

The Philippine government denies this, of course. It says that the zones are subject to the same labor standards as the rest of Philippine society: workers must be paid the minimum wage, receive social security benefits, have some measure of job security, be dismissed only with just cause and be paid extra for overtime, and they have the right to form independent trade unions. But in reality, the government views working conditions in the export factories as a matter of foreign trade policy, not a labor-rights issue. And since the government attracted the foreign investors with promises of a cheap and docile workforce, it intends to deliver. For this reason, labor department officials turn a blind eye to violations in the zone or even facilitate them.

Many of the zone factories are run according to iron-fist rules that systematically break Philippine labor law. Some employers, for instance, keep bathrooms padlocked except during two fifteen-minute breaks, during which time all the workers have to sign in and out so management can keep track of their nonproductive time. Seamstresses at a factory sewing garments for the Gap, Guess and Old Navy told me that they sometimes have to resort to urinating in plastic bags under their machines. There are rules against talking, and at the Ju Young electronics factory, a rule against smiling. One factory shames those who disobey by posting a list of ”The Most Talkative Workers.”

Factories regularly cheat on their workers' social security payments and gather illegal ”donations” from workers for everything from cleaning materials to factory Christmas parties. At a factory that makes IBM computer screens, the ”bonus” for working hours of overtime isn't a higher hourly wage but doughnuts and a pen. Some owners expect workers to pull weeds from the ground on their way into the factory; others must clean the floors and the washrooms after their s.h.i.+fts end. Ventilation is poor and protective gear scarce.

Then there is the matter of wages. In the Cavite zone, the minimum wage is regarded more as a loose guideline than as a rigid law. If $6 a day is too onerous, investors can apply to the government for a waiver on that too. So while some zone workers earn the minimum wage, most-thanks to the waivers-earn less.32 Not Low Enough: Squeezing Wages in China Part of the reason the threat of factory flight is so tangible in Cavite is that compared with China, Filipino wages are very high. In fact, everyone's wages are high compared with China. But what is truly remarkable about that is that the most egregious wage cheating goes on inside China itself.

Labor groups agree that a living wage for an a.s.sembly-line worker in China would be approximately US87 cents an hour. In the United States and Germany, where multinationals have closed down hundreds of domestic textile factories to move to zone production, garment workers are paid an average of US$10 and $18.50 an hour, respectively.33 Yet even with these ma.s.sive savings in labor costs, those who manufacture for the most prominent and richest brands in the world are still refusing to pay workers in China the 87 cents that would cover their cost of living, stave off illness and even allow them to send a little money home to their families. A 1998 study of brand-name manufacturing in the Chinese special economic zones found that Wal-Mart, Ralph Lauren, Ann Taylor, Esprit, Liz Claiborne, Kmart, Nike, Adidas, J.C. Penney and the Limited were only paying a fraction of that miserable 87 cents-some were paying as little as 13 cents an hour. (see Yet even with these ma.s.sive savings in labor costs, those who manufacture for the most prominent and richest brands in the world are still refusing to pay workers in China the 87 cents that would cover their cost of living, stave off illness and even allow them to send a little money home to their families. A 1998 study of brand-name manufacturing in the Chinese special economic zones found that Wal-Mart, Ralph Lauren, Ann Taylor, Esprit, Liz Claiborne, Kmart, Nike, Adidas, J.C. Penney and the Limited were only paying a fraction of that miserable 87 cents-some were paying as little as 13 cents an hour. (see Table 9.3 Table 9.3) The only way to understand how rich and supposedly law-abiding multinational corporations could regress to nineteenth-century levels of exploitation (and get caught repeatedly) is through the mechanics of subcontracting itself: at every layer of contracting, subcontracting and homework, the manufacturers bid against each other to drive down the price, and at every level the contractor and subcontractor exact their small profit. At the end of this bid-down, contract-out chain is the worker-often three or four times removed from the company that placed the original order-with a paycheck that has been trimmed at every turn. ”When the multinationals squeeze the subcontractors, the subcontractors squeeze the workers,” explains a 1997 report on Nike's and Reebok's Chinese shoe factories.34 ”No Union, No Strike”

A large sign is posted at a central intersection in the Cavite Export Processing Zone: ”DO NOT LISTEN TO AGITATORS AND TROUBLE MAKERS.” The words are in English, painted in bright red capital letters and everyone knows what they mean. Although trade unions are technically legal in the Philippines, there is a widely understood-if unwritten-”no union, no strike” policy inside the zones. As the sign suggests, workers who do attempt to organize unions in their factories are viewed as troublemakers, and often face threats and intimidation.

One of the reasons I went to Cavite is that I had heard this zone was a hotbed of ”troublemaking,” thanks to a newly formed organization called the Workers' a.s.sistance Center. Attached to Rosario's Catholic church only a few blocks from the zone's entrance, the center is trying to break through the wall of fear that surrounds free-trade zones in the Philippines. Slowly, they have been collecting information about working conditions inside the zone. Nida Barcenas, one of the organizers at the center, told me, ”At first, I used to have to follow workers home and beg them to talk to me. They were so scared-their families said I was a troublemaker.” But after the center had been up and running for a year, the zone workers flocked there after their s.h.i.+fts-to hang out, eat dinner and attend seminars. I had heard about the center back in Toronto, told by several international labor experts that the research and organizing on free-trade zones coming out of this little bare-bones operation is among the most advanced being done anywhere in Asia.

The Workers' a.s.sistance Center, known as WAC, was founded to support the factory workers' const.i.tutional right to fight for better conditions-zone or no zone. Zernan Toledo is the center's most intense and radical organizer, and though he is only twenty-five and looks like a college student, he runs the center's affairs with all the discipline of a revolutionary cell. ”Outside the zone, workers are free to organize a union, but inside they cannot stage pickets or have demonstrations,” Toledo told me in my two-hour ”orientation session” at the center. ”Group discussions in the factories are prohibited and we cannot enter the zone,” he said, pointing to a diagram of the zone layout hanging on the wall.35 This catch-22 exists throughout the quasi-private zones. As the International Confederation of Free Trade Unions report puts it: ”The workers are effectively living in 'lawless' territory where to defend their rights and interests they are constantly forced to take 'illegal' action themselves.” This catch-22 exists throughout the quasi-private zones. As the International Confederation of Free Trade Unions report puts it: ”The workers are effectively living in 'lawless' territory where to defend their rights and interests they are constantly forced to take 'illegal' action themselves.”36 In the Philippines, the zone's culture of incentives and exceptions, which was intended to be phased out as the foreign companies joined the national economy, has had the opposite effect. Not only have new swallows landed, but unionized factories already in the country have shut themselves down and reopened inside the Cavite Export Processing Zone in order to take advantage of all the incentives. For instance, Marks & Spencer goods used to be manufactured in a unionized factory north of Manila. ”It only took ten trucks to bring Marks & Spencer to Cavite,” a labor organizer in the area told me. ”The union was eliminated.”

Cavite is by no means exceptional in this regard. Union organizing is a source of great fear throughout the zones, where a successful drive can have dire consequences for both organizers and workers. That was the lesson learned in December 1998, when the American s.h.i.+rtmaker Phillips-Van Heusen closed down the only unionized export apparel factory in all of Guatemala, laying off five hundred workers. The Camisas Modernas plant was unionized in 1997, after a long and bitter organizing drive and significant pressure placed on the company by U.S. human-rights groups. With the union, wages went up from US$56 a week to $71 and the previously squalid factory was cleaned up. Jay Mazur, president of the Union of Needletrades, Industrial and Textile Employees (UNITE)-America's largest apparel union-called the contract ”a beacon of hope for more than 80,000 maquiladora workers in Guatemala.”37 When the factory closed, however, the beacon of hope turned into a flas.h.i.+ng red danger signal, reinforcing the familiar warning: no union, no strike. When the factory closed, however, the beacon of hope turned into a flas.h.i.+ng red danger signal, reinforcing the familiar warning: no union, no strike.

Patriotism and national duty are bound up in the exploitation of the export zones, with young people-mostly women-sent off to sweatshop factories the way a previous generation of young men were sent off to war. No questioning of authority is expected or permitted. In some Central American and Asian EPZs, strikes are officially illegal; in Sri Lanka, it is illegal to do anything at all that might jeopardize the country's export earnings, including publis.h.i.+ng and distributing critical material.38 In 1993, a Sri Lankan zone worker by the name of Ranjith Mudiyanselage was killed for appearing to challenge this policy. After complaining about a faulty machine that had sliced off a co-worker's finger, Mudiyanselage was abducted on his way out of an inquiry into the incident. His body was found beaten and burning on a pile of old tires outside a local church. The man's legal adviser, who had accompanied him to the inquiry, was murdered in the same way. In 1993, a Sri Lankan zone worker by the name of Ranjith Mudiyanselage was killed for appearing to challenge this policy. After complaining about a faulty machine that had sliced off a co-worker's finger, Mudiyanselage was abducted on his way out of an inquiry into the incident. His body was found beaten and burning on a pile of old tires outside a local church. The man's legal adviser, who had accompanied him to the inquiry, was murdered in the same way.39 Despite the constant threat of retaliation, the Workers' a.s.sistance Center has made some modest attempts to organize unions inside the Cavite zone factories, with varying degrees of success. For instance, when a drive was undertaken at the All Asia garment factory, the organizers came up against a very challenging obstacle: worker exhaustion. The biggest complaint among the All Asia seamstresses who st.i.tch clothes for Ellen Tracy and Sa.s.soon is forced overtime. Regular s.h.i.+fts last from 7 a.m. to 10 p.m., but on a few nights a week employees must work ”late”-until 2 a.m. During peak periods, it is not uncommon to work two 2 a.m. s.h.i.+fts in a row, leaving many women only a couple of hours of sleep before they have to start their commute back to the factory. But that also means most All Asia workers spend their precious thirty-minute breaks at the factory napping, not talking about unions. ”I have a hard time talking with the workers because the workers are always very sleepy,” a mother of four tells me, explaining why she has had no luck in her attempts to bring a union to the All Asia factory. She has been with the company for four years and still lacks basic job security and health insurance.

Work in the zone is characterized by this brutal combination of tremendous intensity and nonexistent job security. Everyone works six or seven days a week, and when a big order is due to be s.h.i.+pped out, employees work until it is done. Most workers want some overtime hours because they need the money, but the overnight s.h.i.+fts are widely considered a burden. Refusing to stay, however, is not an option. For instance, according to the official rule book of the Philips factory (a contractor that has filled orders for both Nike and Reebok), ”Refusal to render overtime work when so required” is an offense ”punishable with dismissal.” The same is true at all the factories I encountered, and there are many reports of workers asking to leave early-before 2 a.m., for instance-and being told not to return to work the next day.

Overtime horror stories pour out of the export processing zones, regardless of location: in China, there are doc.u.mented cases of three-day s.h.i.+fts, when workers are forced to sleep under their machines. Contractors often face heavy financial penalties if they fail to deliver on time, no matter how unreasonable the deadline. In Honduras, when filling out a particularly large order on a tight deadline, factory managers have been reported injecting workers with amphetamines to keep them going on forty-eight-hour marathons.40 What Happened to Carmelita...

In Cavite, you can't talk about overtime without the conversation turning to Carmelita Alonzo, who died, according to her co-workers, ”of overwork.” Alonzo, I was told again and again-by groups of workers gathered at the Workers' a.s.sistance Center and by individual workers in one-on-one interviews-was a seamstress at the V.T. Fas.h.i.+ons factory, st.i.tching clothes for the Gap and Liz Claiborne, among many other labels. All of the workers I spoke with urgently wanted me to know how this tragedy happened so that I could explain it to ”the people in Canada who buy these products.” Carmelita Alonzo's death occurred following a long stretch of overnight s.h.i.+fts during a particularly heavy peak season. ”There were a lot of products for s.h.i.+p-out and no one was allowed to go home,” recalls Josie, whose denim factory is owned by the same firm as Carmelita's, and who also faced large orders at that time. ”In February, the line leader had overnights almost every night for one week.” Not only had Alonzo been working those s.h.i.+fts, but she had a two-hour commute to get back to her family. Suffering from pneumonia-a common illness in factories that are suffocatingly hot during the day but fill with condensation at night-she asked her manager for time off to recover. She was denied. Alonzo was eventually admitted to hospital, where she died on March 8, 1997-International Women's Day.

I asked a group of workers gathered late one evening around the long table at the center how they felt about what happened to Carmelita. The answers were confused at first. ”Feel? But Carmelita is us.” But then Salvador, a sweet-faced twenty-two-year-old from a toy factory, said something that made all of his co-workers nod in vigorous agreement. ”Carmelita died because of working overtime. It is possible to happen to any one of us,” he explained, the words oddly incongruous with his pale blue Beverly Hills 90210 Beverly Hills 90210 T-s.h.i.+rt. T-s.h.i.+rt.

Much of the overtime stress could be alleviated if the factories would just hire more workers and create two shorter s.h.i.+fts. But why should they? The government official appointed to oversee the zone isn't interested in taking on the factory owners and managers about the overtime violations. Raymondo Nagrampa, the zone administrator, acknowledged that it would certainly be better if the factories hired more people for fewer hours, but, he told me, ”I think I will leave that. I think this is more of a management decision.”

For their part, the factory owners are in no rush to expand the size of their workforce, because after a big order is filled there could be a dry spell and they don't want to be stuck with more employees than work. Since following Philippine labor law is ”a management decision,” most decide that it is more convenient for management to have one pool of workers who are simply forced to work more hours when there is more work and fewer when there is less of it. And this is the flip side of the overtime equation: when a factory is experiencing a lull in orders or a s.h.i.+pment of supplies has been delayed, workers are sent home without pay, sometimes for a week at a time. The group of workers gathered around the table at the Workers' a.s.sistance Center burst out laughing when I asked them about job security or a guaranteed number of working hours. ”No work, no pay!” the young men and women exclaim in unison.

The ”no work, no pay” rule applies to all workers, contract or ”regular.” Contracts, when they exist, last only five months or less, after which time workers have to ”recontract.” Many of the factory workers in Cavite are actually hired through an employment agency, inside the zone walls, that collects their checks and takes a cut-a temp agency for factory workers, in other words, and one more level in the multiple-level system that lives off their labor. Management uses a variety of tricks in the different zones to keep employees from achieving permanent status and collecting the accompanying rights and benefits. In the Central American maquiladoras, it is a common practice for factories to fire workers at the end of the year and rehire them a few weeks later so that they don't have to grant them permanent status; in the Thai zones, the same practice is known as ”hire and fire.”41 In China, many workers in the zones have no contracts at all, which leaves them without any rights or recourse whatsoever. In China, many workers in the zones have no contracts at all, which leaves them without any rights or recourse whatsoever.42 It is in this casual new relations.h.i.+p to factory employment that the EPZ system breaks down completely. In principle, the zones are an ingenious mechanism for global wealth redistribution. Yes, they lure jobs from the North, but few fair-minded observers would deny the proposition that as industrialized nations s.h.i.+ft to higher-tech economies, it is only a matter of global justice that the jobs upon which our middle cla.s.ses were built should be shared with countries still enslaved by poverty. The problem is that the workers in Cavite, and in zones throughout Asia and Latin America, are not inheriting ”our” jobs at all. Gerard Greenfield, former research director of the Asian Monitoring and Resource Centre in Hong Kong, says, ”One of the myths of relocation is that those jobs that seemed to be transferred from the so-called North to the South are perceived as similar jobs to what was already being done before.” They are not. Just as company-owned manufacturing turned-somewhere over the Pacific Ocean-into ”orders” to be placed with third-party contractors, so did full-time employment undergo a mid-flight transformation into ”contracts.” ”The biggest challenge to those in Asia,” says Greenfield, ”is that the new employment created by Western and Asian multinationals investing in Asia is temporary and short-term employment.”43 In fact, zone workers in many parts of Asia, the Caribbean and Central America have more in common with office-temp workers in North America and Europe than they do with factory workers in those Northern countries. What is happening in the EPZs is a radical alteration in the very nature of factory work. That was the conclusion of a 1996 study conducted by the International Labor Organization, which stated that the dramatic relocation of production in the garment and shoe industries ”has been accompanied by a parallel s.h.i.+ft of production from the formal to the informal sector in many countries, with generally negative consequences on wage levels and conditions of work.” Employment in these sectors, the study went on, has s.h.i.+fted from ”full-time in-plant jobs to part-time and temporary jobs and, especially in clothing and footwear, increasing resort to homework and small shops.”44 Indeed, this is not simply a job-flight story.

A Floating Workforce On my last night in Cavite, I met a group of six teenage girls in the workers' dormitories who shared a six-by-eight-foot concrete room: four slept on the makes.h.i.+ft bunk bed (two to a bed), the other two on mats spread on the floor. The girls who made Aztek, Apple and IBM CD-ROM drives shared the top bunk; the ones who sewed Gap clothing, the bottom. All were the children of farmers, away from their families for the first time.

Their jam-packed s...o...b..x of a home had the air of an apocalyptic slumber party-part prison cell, part Sixteen Candles Sixteen Candles. It may have been a converted pigsty, but these were sixteen-year-old girls, and like teenage girls the world over they had covered the gray, stained walls with pictures: of fluffy animals, Filipino action-movie stars, and glossy magazine ads of women modeling lacy bras and underwear. After a little while, serious talk of working conditions erupted into fits of giggles and hiding under bedcovers. It seems that my questions reminded two of the girls of a crush they had on a labor organizer who had recently given a seminar at the Workers' a.s.sistance Center on the risks of infertility from working with hazardous chemicals.

Were they worried about infertility?

”Oh, yes. Very worried now.”

All through the Asian zones, the roads are lined with teenage girls in blue s.h.i.+rts, holding hands with their friends and carrying umbrellas to s.h.i.+eld them from the sun. They look like students coming home from school. In Cavite, as elsewhere, the vast majority of workers are unmarried women between the ages of seventeen and twenty-five. Like the girls in the dorms, roughly 80 percent of the workers have migrated from other provinces of the Philippines to work in the factories-a mere 5 percent are native to the town of Rosario. Like the swallow factories, they too are only tenuously connected to this place.

Raymondo Nagrampa, the zone administrator, says migrants are recruited for the zone to compensate for something innate in ”the Cavite character,” something that makes local people unfit to work in the factories situated near their homes. ”I don't mean any offense to the Cavite personality,” he explained, in his s.p.a.cious air-conditioned office. ”But from what I gather, this particular character is not suited for the factory life-they'd rather go into something quickly. They do not have the patience to be right there in the factory line.” Nagrampa attributes this to the fact that Rosario is so close to Manila ”and so we can say that the Cavitenians are not running scared with regard to getting some income for their daily subsistence....

”But in the case of those from the provinces, from the lower areas, they are not exposed to the big-city lifestyle. They feel more comfortable just working in the factory line, for, after all, this is a marked improvement from the farm work that they've been accustomed to, where they were exposed to the sun. To them, for the lowly province rural worker, working inside an enclosed factory is better off than being outside.”

I asked dozens of zone workers-all of them migrants from rural areas-about what Raymondo Nagrampa had said. Every one of them responded with outrage.

”It's not human!” exclaimed Rosalie, a teenager whose job is installing the ”backlights” in IBM computer screens. ”Our rights are being trampled and Mr. Nagrampa says that because he has not experienced working in a factory and the conditions inside.”