Textile workers labor under challenging conditions. Photo by Matt Marriott.
When she can’t find work in her native Nicaragua, Paula Velasquez often leaves her six children and five grandchildren to emigrate to work in textile factories in neighboring Costa Rica, Honduras and Guatemala, something she first resorted to when her youngest child was barely a year old. Today, Velasquez, 42, stares blankly when asked what she would do if she were to lose her textile factory job.
Even emigration may not be an option for Velasquez when a worldwide textile agreement ends on Jan. 1. The end of the agreement, which has limited clothing production in cut-rate countries like China for 10 years so that developing countries like Nicaragua get a share of the U.S. market, will free importing nations to shift their orders to China. Many factories in Nicaragua, most foreign-owned, manufacture clothing for U.S. companies such as Wal-Mart, Kmart and J.C. Penney.
After Jan. 1, even Nicaragua’s cheap labor – factory workers earn about $2.50 a day – will not be able to compete with China’s low-cost clothing production. In effect, 250,000 Nicaraguans stand to lose their jobs.
Velasquez, who has worked in textile and clothing factories since she was 12, says she doesn’t know how she would support her family if the factories were to disappear.
“It would be chaos,” says Velasquez of the pending outcome. “The only thing we have is our jobs.”
No other options
Already the second-poorest nation in the Western hemisphere, Nicaragua can’t stand to lose one job let alone a quarter million.
“We can only be calm here in this country when there’s employment,” says Emilio C. Noguera of the Corporation of Free Trade Zones in Managua, which oversees Nicaraguan textile factories. “If the Nicaraguans don’t have jobs, it’s going to be a social explosion.”
About half of all Nicaraguans already live below the poverty line. Fifty-two percent of Nicaraguans are either unemployed or underemployed. One million people – 20 percent of the population – emigrate for lack of work. And about 3 percent of the population works under the table, so to speak, including the window washers who scatter the highways, the children who hawk homemade beverages in plastic baggies out of buckets and the vendors who peddle shaved coconuts on street corners.
Noguera says, “Basically the free trade zone in Nicaragua is the only opportunity for employment.”
Cultivating ignorance
Most Nicaraguan textile workers like Velasquez either are completely unaware that their jobs are at risk because of the end of the Agreement on Textiles and Clothing, or they are in denial that factory owners in Nicaragua could find cheaper labor elsewhere.
“The workers don’t know about el efecto chino,” says Noguera, referring to what has been coined “the Chinese effect.”
“The problem is for the business owners and the government.”
Even officials with the Nicaraguan government’s Ministry of Workers, charged with tending to worker concerns, say they are not aware of the end of the textile agreement.
“We just never heard anything about it,” says Ramon Ruiz of the Ministry of Workers in the Carazo Region of Nicaragua. “All that government legislation doesn’t affect us.”
Ruiz says that during a recent visit by Noguera, the free trade zone official did not mention the end of the textile agreement.
“They could completely cover up what is happening,” Ruiz says.
There also seems to be an unposted “don’t-ask-don’t-tell” policy in the textile factories.
When asked for the names of one factory’s U.S. clients, a factory worker in a Korean-owned factory shifts her eyes to another who warns, “Don’t say anything or else” as she slides her finger across her throat.
“One shouldn’t ask anything,” Velasquez says about the atmosphere in the factories. “You show up. You work on what corresponds to you, and that’s it.”
Yesenia Aceredo, 25, Velasquez’s daughter and a textile factory worker, says that when she wasn’t paid what she was promised for producing more clothing than usual, she didn’t ask her employer why for fear of losing her job. Aceredo also said that she doesn’t know the name of the factory she works for. She never asked.
Factory workers aren’t likely to question the Nicaraguan government about job security either.
“The workers don’t trust the government,” Velasquez says. “They don’t believe their voices are important to the government, so they remain silent.”
Nicaragua has dropped the ball
After Jan. 1, China will be waiting, poised to soak up the flood of textile orders, which will surge from 20 percent to 70 percent, according to a New York Times article. Soon China will account for almost half the world’s clothing production, according to the same article. Around the world an estimated 30 million textile factory jobs will be eliminated, according to a Washington Post article.
“I think the textile industry is in upheaval everywhere now,” says Terry McCoy, a professor of Latin American studies and political science at the University of Florida. “And small countries are in danger of being wiped out, there’s no question about that.”
The Nicaraguan government is placing hope on four factors to keep its textile industry afloat: preferential access to the U.S. market vis-á-vis the Central American Free Trade Agreement, or CAFTA; Nicaragua’s close proximity to the United States; the no-taxes-on-exports incentive to keep foreign-owned factories in Nicaragua; and development of a law that is supposed to make Nicaragua more competitive by attracting foreign investment, the details of which have not been discussed.
Yet, to attract investment, Noguera says, Nicaragua’s infrastructure, and its unstable political and social systems must improve before the nation will appeal to foreign investors.
“These are small and not-very-well-organized governments,” McCoy says. “And you can’t [improve infrastructure] that fast.”
The textile agreement was designed to phase out over 10 years, so why didn’t Nicaragua act sooner?
“This is a Spanish culture, and this country is developing,” says a human resources manager in a Managua-based, Taiwan-owned textile factory. “The problem is that even the government hasn’t even went into the details yet.”
The manager, who asked that neither her name nor the name of the company be used, says that her company can’t compete with China.
“China has much cheaper labor and much better quality,” she says.
For a country that experienced civil war, as well as devastating and deadly hurricanes and earthquakes, Nicaragua is no bastion against the threat of el efecto chino.
The lack of communication between the factory workers, their employers and the Nicaraguan government has paralyzed Nicaraguans from preparing for the end of the textile agreement. Few believe they have the power to protect Nicaragua’s invaluable jobs.
Says Ruiz, with the Ministry of Workers, “That’s the way life is.”
