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.