Profit Pyramid

Who Benefits the Most from Subcontracting?  The Cache Example:

Sub-contracting is a system in which large entities contract out its work to smaller companies or individuals to sweat as much profit out of workers as possible and avoid responsibility for the abuses of these employees. Following is an example of how this works in the garment industry with the Cache garment case.


Apparel manufacturing today is a $10 billion annual business in New York.[1]  For instance, multi-national retailer Cache alone rakes in over $100 million in pure profits each year.[2]  Like other retailers, Cache in recent years merged with its manufacturer to consolidate at the top, increasing control over design, distribution and production.


Since 2003, the workers’ factory received the majority of work from manufacturer Adrienne Victoria Designs that worked almost exclusively for Cache until 2007, when Cache bought out and merged with Adrienne Victoria Designs.  Manufacturers take orders from designers and retailers, and then contract with factories to produce the clothing.  Through this process, manufacturers inherently promote sweatshop factories that bid the lowest amount, regardless of whether it is enough to pay workers minimum wage in order to produce it.


Through over 13 years, the workers witnessed the factory would often change names in order to evade responsibility for labor violations, thereby preventing the manufacturer from also being held liable.  Nevertheless, Cache routinely sent ‘independent’ monitors to investigate the conditions in the factory.  Cache even paid workers in checks for violations they found, yet to this day they still do business with the factory.


Workers were paid less than a dollar to sew blouses and dresses with a retail price tag of about $200.  In 2001, the garment manufacturing industry in New York City alone accounted for nearly 100,000 jobs in the fashion industry.[3]  Through the years, due to the lack of accountability in the industry, workers are not even able to survive on such low wages.  As a result, only 24,000 garment workers remain in the New York City apparel manufacturing industry.



Typically consumers are seen at the top of the pyramid, as if what we buy or don’t buy has the most power. We also think that cheaper labor means cheaper prices for us. But cheaper labor just means greater profit for the manufacturers and retailers. And who are we?  Most people buying sweatshop clothing are also working people.  While we might not work in garment sweatshops, we still do not have control of our time.  Rather than passively boycott as consumers, we must see our power as working people and launch a pro-active campaign to eliminate sweatshops.

[2] See Cache, Inc. Schedule 10-K annual investors report;

[3] See “NYC’s Garment Industry: A New Look?”; Fiscal Policy Institute, 2003;

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