MEDIA LITERACY

Case Study

Improving the Credibility Gap

In the 1990s, a growing tide of Americans focused on the problems of outsourcing: using the production, manufacturing, and labor resources of foreign companies to produce American brand-name products, sometimes under deplorable working conditions. Outsourcing was pushed into the public eye in 1996 after major media attention focused on morning talk-show host Kathie Lee Gifford when investigations by the National Labor Committee revealed that part of her clothing line, made and distributed by Walmart (then branded as Wal-Mart), came from sweatshops in New York and Honduras. The sweatshops paid less than minimum wages, and some employed child laborers. Human-rights activists claimed that in overseas sweatshops in particular, children were being exploited in violation of international child-labor laws.

Many leading clothing labels and retailers continue to ignore pressure from consumer and labor groups, and still tolerate sweatshop conditions in which workers take home minimal pay. Gap Inc.—one of the world’s largest clothing retailers with more than thirty-one hundred Gap, Banana Republic, Old Navy, and Forth & Towne stores (and an online shoe store)—made a huge statement in the industry by publicizing its efforts to watch over labor conditions at its overseas factories. The move was an enormous policy shift from the company’s past defensiveness against allegations of worker exploitation. Gap issued its first Social Responsibility Report in 2004—the first time any company has ever publicly detailed the production and labor information of the factories with which it contracts.

The report is Gap’s effort for improved transparency and better communication with its employees, shareholders, and those concerned about garment industry operations. The company now employs a team of more than ninety people to inspect and improve working conditions in its approximately three thousand contracted garment factories in fifty countries, and continues to issue progress reports. In most cases, Gap is able to improve labor conditions, but it also cancels contracts when needed. Gap terminated seventy factory contracts in 2004 and another sixty-two in 2005. Typical violations include lack of compliance with child-labor laws, pay below minimum wage, work weeks in excess of sixty hours, psychological coercion and verbal abuse, locked or inaccessible exits, and lack of access to potable water.

Gap’s social responsibility efforts also involve cosponsorship of the global (PRODUCT) RED campaign, founded in part by rock singer Bono to raise awareness of and money for HIV/AIDS in Africa. Gap’s role includes spending millions in advertising dollars to sell (PRODUCT) RED clothing to support HIV/AIDS relief, and helping to develop a sustainable garment industry in Lesotho. The campaign also includes other consumer products manufacturers, such as Converse, Giorgio Armani, American Express, Motorola, and Apple. Social responsibility has sprung up in entire new clothing lines as well. Edun, for example, is a collection established by Bono; his wife, Ali Hewson; and designer Rogan Gregory to create fair, sustainable microindustries in developing countries, particularly in Africa. As Hewson says, “People are reading the labels on their clothes. They’re asking themselves if they want to wear something that was made out of someone else’s despair.”¹

APPLYING THE CRITICAL PROCESS

DESCRIPTION Select three clothing retailers—for example, chains like Target, Macy’s, Dillard’s, JCPenney, J. Crew, Ann Taylor, Limited Brands, or Abercrombie & Fitch.

ANALYSIS Go to each retailer’s corporate Web site, and (often under investor relations) find its social responsibility statement or guidelines. (If there is not a category like this, look for its code of ethics or business practices.) Look for the patterns—similarities and differences—among the three. Do their ethics apply to only the corporate environment of the company, or do they also consider the environmental impact and labor conditions of their suppliers in the United States and developing countries?

INTERPRETATION How comprehensive and transparent should a corporation’s ethical and social responsibility guidelines be? (In other words, how broadly should a corporation define its “publics”—its employees, its customers, the local communities, the entire world—and what should the corporation promise to do?)

EVALUATION Which of the three companies has the most comprehensive and transparent corporate social/ethical policy? What made it the best of the three?

ENGAGEMENT Engage directly with the business by writing or e-mailing the one(s) you were most impressed with, and telling it why. Contact the one(s) with deficient policies, and tell it how it could improve. You can also connect with a number of other groups, such as the National Labor Committee, to learn more about corporate labor records.