The Tiny Dominican Factory That Disproves the Need for Sweatshops

Sarah Adler-Milstein, a labor advocate, argues “there’s absolutely no reason” the world’s biggest clothing brands couldn’t follow the example of Santo Domingo’s Alta Gracia.

Workers in a Santo Domingo garment factory in 2005 (Ramon Espinosa / AP)

The quest for ethical clothing production can seem futile. Many in the industry see low pay, unsafe labor conditions, and a host of other indignities commonly associated with garment-factory work abroad as vexing and intractable problems.

For one thing, there are real doubts that consumers’ desire for clothing made in less-abusive conditions could ever override their desire for low prices. Another issue is just how sprawling the global supply chain is—brands can have trouble accounting for every single factory and worker that has a hand in creating a garment. These are some of the things that brands have said can inhibit their ability to increase wages and weed out supply-chain abuses; they have also suggested that it’s up to local governments to establish a minimum wage that covers workers’ living expenses.

One factory in the Dominican Republic stands as a counter-argument to all of this. It’s called Alta Gracia, and it makes clothing, including T-shirts and sweatshirts, for university bookstores and sports teams around the U.S. Alta Gracia pays its workers a living wage in an industry that is notorious for skimping on worker salaries, and was opened about seven years ago by two executives at Knights Apparel, Donnie Hodge and Joe Bozich, with help from labor advocates at the nonprofit Worker Rights Consortium.

I spoke with Sarah Adler-Milstein, who has worked with the Workers Rights and co-authored the book Sewing Hope: How One Factory Challenges the Apparel Industry’s Sweatshops, about Alta Gracia—why it was founded, how its model works, and what its successes and challenges reveal about the garment industry more broadly. The conversation below has been edited for length and clarity.

Gillian B. White: What was the biggest challenge that came with starting a factory like Alta Gracia that paid workers a living wage?

Sarah Adler-Milstein: It was not hard for any of the traditional reasons. It was actually very hard to try to establish a brand presence based on good working conditions, because you're competing against brands like Nike and Reebok that have quite a bit of market share and name recognition. It's also just challenging to set up factories. But the actual part of paying a living wage and working with a union? Those were the easy parts of the model.

White: So you think that model could be used elsewhere?

Adler-Milstein: Alta Gracia tells a very different story than the conventional one, which says that paying living wages and having decent conditions isn't possible. Alta Gracia shows that if a small start-up can do it, there's absolutely no reason that the Nikes and the Gaps and H&Ms of the world couldn't do it. They've already done the hard work of establishing a brand and setting up factories.

White: When it comes to pay, how much more would it take to get a typical factory worker up to a living wage?

Adler-Milstein: The living-wage premium is only 90 cents per garment. Take a $35 sweatshirt: Conventional factory workers are making less than 50 cents per garment, but at Alta Gracia they get paid just 90 cents more, and that triples wages. Most goods have about a 75 percent markup with both the retailer and the wholesaler, so for a $35 sweatshirt, about $25 of that is just retailer and wholesaler markup. So that 90 cents could easily be absorbed.

White: What do you make of claims that many customers won’t pay more for more ethically made goods?

Adler-Milstein: Obviously you get to a certain point and consumers are no longer willing to pay the difference, but 90 cents is well within the margin of what consumers are willing to pay. I think an unfortunate side effect of the niche fair-trade model that we've seen up until now is that many of those goods cost a lot, because of retail and wholesaler markups in the niche markets that they cater to. People have a concept that fair-trade, living-wage goods are necessarily expensive, and that's actually not true.

White: What did you think Alta Gracia would have the hardest time changing about the way most apparel factories operate?

Adler-Milstein: We were really concerned about how we would get factory managers, who were used to very abusive conditions, to act right—like what kind of training we would have to give them, what kind of resources we would have to give them. What was surprising was that they were delighted to be able to work in a factory where they could work more cooperatively with employees and conditions were great. They loved it.

White: That’s interesting—often in stories of factory abuses, it's the managers and supervisors who come out looking like the biggest villains. Brands are often able to invoke the complexity of the supply chain to suggest that they had no idea what was going on. How does this change that argument?

Adler-Milstein: I think what we learned from Alta Gracia is that managers often are tasked with the industry's dirty work. They are given an untenable amount of money to produce goods, and then they have to push workers to work off the clock, and long garments. Alta Gracia's example has been really telling that many industry players who've been forced into these terrible positions really want to see change and are willing to make it, if the incentives are changed from the brand level and retailer level.

White: Aside from appealing to executives’ humanity and fear of bad press, is there an economic argument for why big companies should consider higher wages and better factory supervision?

Adler-Milstein: In a normal factory, we found there's 50 to 60 percent worker turnover every year. It takes about three months to train a sewing machine operator, and they have lower output in the three-month period as they're getting trained. By contrast, Alta Gracia's turnover is 5 percent per year. There's all sorts of business benefits that start happening when you start paying a living wage. Many of those costs can even just be absorbed in attracting and keeping a more skilled workforce.

White: Toward the end of the book, you talk about how the primary goal of a factory like Alta Gracia shouldn’t be scalability. What do you mean by that?

Adler-Milstein: When we say it's not about scalability, we mean people should not try and start factories from zero and start a new brand, like Alta Gracia did. It's 100 percent scalable, and far easier, for Nike or H&M or Walmart to do this in their supply chains. It's not complicated—they just have to pay their factories more and make it clear that they actually want them to implement their health and safety standards. Paying a living wage and working with a union is super easy, and absolutely every brand in the global supply chain could do it tomorrow if they chose to.