An American Sweatshop

The women at the Lion Apparel factory in Beattyville, Kentucky, are part of a largely female workforce of 15,000 nationwide that sews U.S. military uniforms. The Defense Department keeps costs as low as possible, and these workers ultimately pay the price.

(This is a corrected version of this article. It was last updated August 19, 1999. Lion Apparel has responded to this story. You can read a summary of the company's reaction here and a special Editor's note here. )

The two-lane road into Beattyville, Kentucky, winds through breathtaking Appalachian foothills, past rusty machinery and heaps of broken coal left over from the last strip-mining boom. Little handmade signs offer acreage for sale. But there is no demand for land like this -- too rocky for commercial farming and too remote for development. Beattyville (population 1,800) is less a town than a three-light strip bordered by aluminum shacks and a pine forest.

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These days, the chief economic activity in town can be found in the parking lot of the local garage, where teenagers offer a visitor deals on moonshine by the gallon and homegrown marijuana at $2,500 a pound, about half what it would cost in an urban area. Legitimate work opportunities, after all, remain limited. There's a private prison and a data processing center, but both require a high school education, and since half the population never graduates, most seek jobs elsewhere. Inevitably, many of the women turn to Lion Apparel, which operates a sewing factory on the edge of town.

Lion, meanwhile, takes full advantage of its labor pool. Carol Shelton, 48, friendly but blunt, says that every day for the nine years she worked at Lion she would come home exhausted, her hands swollen from pushing stiff fabric past a moving needle. She had to work fast to meet quotas kept by a timekeeper, and if she slowed down or had to redo a seam, her hourly income dropped to the base rate, which usually hovered around minimum wage. Besides the low pay, the job gave her back pain from hunching over old sewing machines held together with spare parts and electrical tape. Fumes from formaldehyde, a suspected carcinogen used to keep fabric stiff, would cling to her clothes, make her short of breath, give her headaches, and cause rashes on her arms. During the sweltering summers, the plant had no air conditioning. One winter, Shelton says, the water in the toilets froze.

In May 1998, Shelton was fired after refusing to perform a job she feared would hurt her back, and she says she has spoken to a lawyer about filing a workers' compensation claim. Meanwhile, five former and two current employees corroborate her description of work conditions at Lion. According to their accounts, the factory fits the definition of a sweatshop as specified by the laws of more than a dozen U.S. cities and counties that ban using public funds to buy from such places. Those criteria include wages so low that workers can't meet basic needs, dangerous working conditions, and intimidation when workers try to unionize. Lion, in a written response to questions from Mother Jones, categorically denies these conditions exist.

The responsibility for the environment these women endure doesn't rest solely with Lion, but also with its main client: the U.S. government. The 650 employees at Lion's facilities are among an estimated 15,000 apparel workers nationwide who produce uniforms for the military, which spends more than $800 million annually on clothing for its 1.4 million personnel. (Lion, based in Dayton, Ohio, is among the top three private suppliers, with a $51 million contract.)

These factories are located in some of the most rural and impoverished communities in America: isolated hamlets in the Appalachian mountains of Kentucky and Tennessee, and small towns in Louisiana. In many of these communities, the stories are similar to Shelton's. Joyce Bennett, a 58-year-old mother of five, says that in the four years she stitched collars on Navy uniforms at Doyle Shirt Manufacturing in Spencer, Tennessee, she never made more than minimum wage and had to supplement her income with food stamps.

In Beattyville, the drive to Shelton's faded-blue clapboard house (the last home on a gravel road with no sign) follows the route Lyndon Johnson took 35 years ago when he toured the area to announce the War on Poverty, his plan for helping the nation's poor join the Great Society. While the resulting social programs managed to reduce the most extreme poverty in Appalachia, the government's role has since changed dramatically. Even though the women of Beattyville work for a large Department of Defense contractor, their dismal workplace conditions remain virtually unregulated by the government. And instead of trying to assist them, the U.S. government trades on their labor for the highest possible return.

When Kathie Lee Gifford's face was splashed across the tabloids in 1996 after her line of Wal-Mart clothing was exposed as the work of underpaid laborers in New York City's Chinatown, the Department of Labor and the White House teamed up to denounce such practices. With much fanfare, the Clinton administration launched the "No Sweat" campaign, which pressured retailers and manufacturers to submit to periodic independent audits of their workplace conditions.

This campaign urged manufacturers to sign the Workplace Code of Conduct, a promise to self-regulate that has since been adopted by a handful of retailers and many of the nation's largest manufacturers, including Liz Claiborne, Nicole Miller, Nike, Patagonia, and L.L. Bean. Absent, however, is the Department of Defense, which has a $1 billion garment business that would make it the country's 14th-largest retail apparel outlet, right behind Talbots and just ahead of Charming Shoppes, whose stores include the Fashion Bug chain.

Without the Defense Department's voluntary adherence to the code, the job of stopping public-sector sweatshops falls to the Department of Labor. Federal contractors that violate wage laws or safety and health codes can lose their lucrative taxpayer- financed contracts. But Suzanne Seiden, a deputy administrator at the department, says that to her knowledge the agency has never applied that rule to government apparel manufacturers. "I just assume that they are adhering to safety and health [requirements]," she says. According to records obtained by Mother Jones through a Freedom of Information Act request, the Occupational Safety and Health Administration has cited Lion 32 times for safety and health violations in the past 12 years. Furthermore, a 1996 General Accounting Office report estimated that 22 percent of all federal contractors had been cited by OSHA for violating safety standards.

In 1997, Arleenna Lawson, a worker at Lion's plant in West Liberty, about a half-hour drive from Beattyville, began waking up with small bumps on her face. At first she thought it was nothing, but in two weeks the bumps grew into large lumps. When she showed a manager at work, she was told not to worry about it. An allergist later determined she was suffering a reaction to the formaldehyde in the permanent-press fabrics she sewed at work, and recommended that Lawson be given an assignment away from the offending chemical. "But they just moved me to another line for a few days, and then I was back doing collars," she remembers. "It got so bad I had to quit."

Before she did, Lawson wrote a letter to OSHA. The agency performed an inspection, concluding that "several women had rashes and were complaining about formaldehyde exposure." OSHA also ruled that Lion should have sent Lawson to the doctor when she complained of illness, and that by not doing so had failed to behave appropriately when "a substantial probability that death or serious physical harm could result." Lion's punishment? A $975 fine. (Lawson eventually won an unemployment benefits claim against Lion.)

Lawson's case was the most recent in a history of violations. In 1987, Lion was cited for failing to give employees proper face protection. In 1990, it was fined for not training employees how to handle hazardous chemicals. It was cited seven times in 1993 for a variety of violations, and nine times in 1996 for, among other reasons, failing to train employees how to use portable fire extinguishers in a plant loaded with flammable materials.

In the absence of effective enforcement, union leaders have pushed for legislative protection for all workers employed through federal contracts. In February 1997, Vice President Al Gore championed the cause, proposing an executive order that would require companies that do business with the government to maintain clean OSHA records and permit union activity. "If you want to do business with the federal government, you had better maintain a safe workplace and respect civil, human, and union rights," Gore told an appreciative AFL-CIO audience. But the proposal caused an outcry among Republicans and has remained on the back burner ever since. Chris Lehane, a Gore spokesman, says, "You have to realize these things don't happen overnight."

When Mother Jones asked Lion if it had ever threatened to close the Beattyville plant if workers unionized, the company's president, Richard Lapedes, wrote back: "No, and we have been happy to state clearly and openly that we would never do such a thing." The Union of Needletrades, Industrial, and Textile Employees (UNITE) tried to organize Lion in 1997 but failed, union leaders claim, because of the management's swift and unyielding opposition. Several memos circulated by Lion to its workers, and obtained by Mother Jones, would appear to support UNITE's interpretation; in one case, the company seems to narrowly evade federal labor laws that prohibit employers from threatening plant closings. The memo reads: "Why [is UNITE] trying to get information which they may want to use to hurt Lion's business? If that happens, that could hurt all of our jobs."

The memos did manage to instill fear in some of the workers. "We had to hide this one girl down in the floorboards of the car whenever we went out to talk about the union," says Tamara Sparks, 23, who is Carol Shelton's daughter. Sparks and her mother are very close, celebrating their weddings (Tamara's first, Carol's third) together in 1991, and working side by side at the Lion factory for three years. Sparks was a union supporter at Lion, and signed a letter, along with seven other employees, that requested outside oversight to prevent the company from retaliating against pro-union workers.

Written with UNITE's help, the letter was sent to Gore, as well as to eight Kentucky congressmen and the state's U.S. senators, telling them: "Some of us have been told point-blank that if we get a union, the plant will close. They've spied on people to see who took union leaflets, and they've told individuals who work here that if we talk to the union we will be fired. Up 'til now, people here have been too afraid to file any official charges, but we'd like to talk to you or someone from your staff about what can be done."

It's not clear how, but shortly thereafter, the letter was forwarded to Lion's management, which then posted it on the company's bulletin board. Soon after that, the union drive sputtered out.

The drive does appear to have had some benefits. Lion's payroll administrator, Tina Ward, says that last year, when Lion raised the hourly pay 30 cents to $5.80 -- 65 cents more than the minimum wage -- it was in response to the unionizing efforts.

In Lion's written response, Lapedes told Mother Jones: "We believe we are one of the most progressive companies, certainly in our industry, if not any industry in the United States." Lapedes conceded that the plant had no air conditioning, but stated that "investment capital has become available, so that air-conditioning all of our facilities has become a viable option." The same day Mother Jones received Lapedes' statement, according to current Lion employees, the company began installing air-conditioning systems at the Beattyville plant.

Meanwhile, the government is impressed by Lion's efficiency. "We are obviously pleased with them as a vendor," says Lynford Morton, a spokesman for the Defense Logistics Agency (DLA), the Defense Department office responsible for most outside contracts. A recent DLA annual report even goes so far as to highlight Lion as a success story, attributing annual savings of $4.5 million to the company's finesse.

The DLA has, in turn, received the admiration of Gore, who has honored the agency's efficiency with 51 Hammer Awards, one of the highest honors his office can bestow. The DLA's job is to secure the lowest bid it can for a contract. The agency's officials, proud of their private-sector partners, say they have no desire to revisit the days before Ronald Reagan and, more recently, Bill Clinton, both of whom eased regulations covering government contracts. "We're getting out of the big daddy thing," explains Morton. "We have no right to tell our suppliers how to do their business."

In 1997, the DLA spent $811.8 million on uniforms and textiles for the Defense Department, and ultimately sold them for $996.9 million, a 22.8 percent markup. Of these uniforms, 97 percent were sold to the U.S. armed services, though the DLA also sells uniforms to foreign governments, including El Salvador ($1 million from 1995 to 1999 in coveralls, flight boots, flight jackets, signal flags, and camouflage cloth), and Saudi Arabia ($17.9 million from 1995 to 1999 in jackets, tents, boots, tarpaulins, helmets, and assorted clothing).

The DLA says that it does not profit from uniform sales, and that the markup is used to cover bureaucratic overhead. But the numbers don't add up. In 1997, the DLA's overhead amounted to 9.3 percent of the cost of purchasing the uniforms, which left an additional $109.6 million unaccounted for. When an internal Defense Department task force reviewed the DLA's 1997 budget, it reported that profits were slated to fund other Defense Department programs, specifically referring to $20 million that was budgeted for the military's operations in Bosnia. The Defense Department has since claimed that the transfer was incorrectly labeled. Members of the task force, meanwhile, are tight-lipped, but stand by their report. "We reported accurately based on the facts we had at the time," says Navy Capt. Barbara Brehm. The Coast Guard's Robert Gitschier says task force members maintain "a level of doubt" about the military's denials.

There are other, more direct ways the military profits from uniform sales. Military clothing stores, for example, which are run by the Army and Air Force Exchange Service (AAFES), sell what they describe as "optional uniform" clothing to its troops. Usually of better quality than the standard uniforms issued to recruits -- thicker fabric, better tailoring -- optional uniforms are purchased from other outside vendors. A survey of these 40 manufacturers shows that 12 of them have received a total of 207 OSHA violations in the past 10 years.

In 1998, $3.4 million in profits from these stores was allocated to the Army's Morale Welfare and Recreation fund, described by a Defense Department official as a network of programs to improve "productivity, mental and physical fitness, individual growth, positive values, esprit de corps, and family well-being." Among the projects underwritten by the fund are Shades of Green, an Army hotel in Florida that features heated swimming pools and free transportation to Disney World; a beachside resort in Hawaii; and an 18-hole golf course at Fort Knox, Kentucky, not more than 120 miles west of Beattyville.

Golf isn't the recreation of choice in Beattyville. I drove Tamara Sparks and her husband, Cecil (with whom she no longer lives), around one night in my rented car, and we talked about what they do for fun. "We party hard, son," Cecil says. That, according to the couple and their friends, means Xanax trips that last for days and moonshine that'll make you want to walk naked down Main Street. There's also racing old Buicks along the back roads, with pit stops in the woods for a little of what Sparks elusively refers to as "scroggin' and scotchin'."

Sparks is vivacious and talkative, but her insecurity comes out in offhand comments, such as when she refers to herself as "just a hillbilly redneck." She doesn't delude herself about life in Beattyville, and becomes anxious when talk turns to the future of her family. She tells Cecil that a cousin told her that "there's lots of work in Texas and I could find a job, no problem." But Cecil, the father of her children, is hesitant to go. While work remains scarce in Appalachia (unemployment estimates reach 24 percent), outside opportunities are hard to imagine in an area where only 5 percent of the population has college degrees.

Besides, Beattyville is home, and those who live here have grown to rely heavily on one another. One of Sparks' brothers-in-law grows and distributes tomatoes and beans; Carol Shelton's husband, Herbert, hunts rabbit and deer, which she then makes into sausage; people trade labor for building supplies and staples; and every month, the church hands out 50-pound sacks of potatoes.

At her current job working at a gas station, Sparks doesn't have health insurance, so her mother lends her money for a doctor when one of the children gets sick. Sparks says she prefers the gas station to Lion, except that the pay's not very good. Unemployment, she says, proved more lucrative. During the time she stayed home after leaving Lion, she explains, she could save the $50 a week she now spends for a babysitter. Her lower earnings also forced her to give up an apartment with lots of space in a big cement dwelling -- low-income housing built with government aid. For now, she has moved back to her mother's little blue house.

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