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Why wage theft is common in garment manufacturing

Author: Margot Roosevelt, Orange County Register (US), Published on: 29 November 2016

…Earlier this month, U.S. Labor Department officials cited three multibillion-dollar retailers, with thousands of stores nationwide, as the worst offenders in setting prices that drive illegal wage theft: Ross, T.J. Maxx and Forever 21…Ruben Rosalez, a U.S. Labor Department regional administrator,.. “I’m sad to say that in 2016, we have sweatshops in America.”…The hunger for bargains comes at a social cost. Retailers set prices they believe consumers want, but their U.S. suppliers can’t begin to manufacture garments at those prices if they pay legal wages, …Officials say federal and state laws allow them to penalize only direct employers…local subcontractors,…are the ones hit with back wages and damages. The manufacturers – middlemen who engage the contractors – are mostly insulated. The retailers who employ the manufacturers escape liability…in an effort to hold department stores and major brands accountable, the U.S. Labor Department launched a new strategy – analyzing supply chain pricing to trace wage theft back to the stores that sell the clothes…Eighty-five percent of the shops were found to be cheating, paying as little as $4 an hour, and an average of $7 an hour – far below California’s $10 minimum wage. Spokeswomen for Ross and T.J. Maxx declined to discuss the investigations. Emailed statements asserted they comply with the law, and they make sure their vendors do, too. Forever 21 did not return calls...

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Related companies: Macy's Nordstrom Ross Stores TJ Maxx (part of TJX) TJX