No Logo Part 6

The Philippines' experience of "industrialization in brackets" is by no means unique. The current mania for the EPZ model is based on the successes of the so-called Asian Tiger economies, in particular the economies of South Korea and Taiwan. When only a few countries had the zones, including South Korea and Taiwan, wages rose steadily, technology transfers occurred and taxes were gradually introduced. But as critics of EPZs are quick to point out, the global economy has become much more competitive since those countries made the transition from low-wage industries to higher-skill ones. Today, with seventy countries competing for the export-processing-zone dollar, the incentives to lure investors are increasing and the wages and standards are being held hostage to the threat of departure. The upshot is that entire countries are being turned into industrial slums and low-wage labor ghettos, with no end in sight. As Cuban president Fidel Castro thundered to the assembled world leaders at the World Trade Organization's fiftieth-birthday celebration in May 1998, "What are we going to live on?...What industrial production will be left for us? Only low-tech, labor-intensive and highly contaminating ones? Do they perhaps want to turn a large part of the Third World into a huge free trade zone full of assembly plants which don't even pay taxes?"29 As bad as the situation is in Cavite, it doesn't begin to compare with Sri Lanka, where extended tax holidays mean that towns can't even provide public transportation for EPZ workers. The roads they walk to and from the factories are dark and dangerous, since there is no money for streetlights. Dormitory rooms are so overcrowded that they have white lines painted on the floor to mark where each worker sleeps-they "look like car parks," as one journalist observed.30

Jose Ricafvente has the dubious honor of being mayor of Rosario. I met with him in his small office, while a lineup of needy people waited outside. A once-modest fishing village, his town today has the highest per capita investment in all of the Philippines-thanks to the Cavite zone-but it lacks even the basic resources to clean up the mess that the factories create in the community. Rosario has all the problems of industrialization-pollution, an exploding population of migrant workers, increased crime, rivers of sewage-without any of the benefits. The federal government estimates that only 30 of the zone's 207 factories pay any taxes at all, but everybody else questions even that low figure. The mayor says that many companies are granted extensions of their tax holiday, or they close and reopen under another name, then take the free ride all over again. "They fold up before the tax holiday expires, then they incorporate to another company, just to avoid payment of taxes. They don't pay anything to the government, so we're in a dilemma right now," Ricafrente told me. A small man with a deep and powerful voice, Ricafrente is loved by his constituents for the outspoken positions he took on human rights and democracy during Ferdinand Marcos's brutal rule. But the day I met him, the mayor seemed exhausted, worn down by his powerlessness to affect the situation in his own backyard.31 "We cannot even provide the basic services that our people expect from us," he said, with a sort of matter-of-fact rage. "We need water, we need roads, we need medical services, education. They expect us to deliver all of them at the same time, expecting that we've got money from taxes from the places inside the zone." "We cannot even provide the basic services that our people expect from us," he said, with a sort of matter-of-fact rage. "We need water, we need roads, we need medical services, education. They expect us to deliver all of them at the same time, expecting that we've got money from taxes from the places inside the zone."

The mayor is convinced that there will always be a country-whether Vietnam, China, Sri Lanka or Mexico-that is willing to bid lower. And in the process, towns like Rosario will have sold out their people, compromised their education system and polluted their natural resources. "It should be a symbiotic relationship," Ricafrente says of foreign investment. "They derive income from us, so the government should also derive income from them.... It should have been a different Rosario."

Working in Brackets So, if it's clear by now that the factories don't bring in taxes or create local infrastructures, and that the goods produced are all exported, why do countries like the Philippines still bend over backward to lure them inside their borders? The official reason is a trickle-down theory: these zones are job-creation programs and the income the workers earn will eventually fuel sustainable growth in the local economy.

The problem with this theory is that the zone wages are so low that workers spend most of their pay on shared dorm rooms and transportation; the rest goes to noodles and fried rice from vendors lined up outside the gate. Zone workers certainly cannot dream of affording the consumer goods they produce. These low wages are partly a result of the fierce competition for factories coming from other developing countries. But, above all, the government is extremely reluctant to enforce its own labor laws for fear of scaring away the swallows. So labor rights are under such severe assault inside the zones that there is little chance of workers earning enough to adequately feed themselves, let alone stimulate the local economy.

The Philippine government denies this, of course. It says that the zones are subject to the same labor standards as the rest of Philippine society: workers must be paid the minimum wage, receive social security benefits, have some measure of job security, be dismissed only with just cause and be paid extra for overtime, and they have the right to form independent trade unions. But in reality, the government views working conditions in the export factories as a matter of foreign trade policy, not a labor-rights issue. And since the government attracted the foreign investors with promises of a cheap and docile workforce, it intends to deliver. For this reason, labor department officials turn a blind eye to violations in the zone or even facilitate them.

Many of the zone factories are run according to iron-fist rules that systematically break Philippine labor law. Some employers, for instance, keep bathrooms padlocked except during two fifteen-minute breaks, during which time all the workers have to sign in and out so management can keep track of their nonproductive time. Seamstresses at a factory sewing garments for the Gap, Guess and Old Navy told me that they sometimes have to resort to urinating in plastic bags under their machines. There are rules against talking, and at the Ju Young electronics factory, a rule against smiling. One factory shames those who disobey by posting a list of "The Most Talkative Workers."

Factories regularly cheat on their workers' social security payments and gather illegal "donations" from workers for everything from cleaning materials to factory Christmas parties. At a factory that makes IBM computer screens, the "bonus" for working hours of overtime isn't a higher hourly wage but doughnuts and a pen. Some owners expect workers to pull weeds from the ground on their way into the factory; others must clean the floors and the washrooms after their shifts end. Ventilation is poor and protective gear scarce.

Then there is the matter of wages. In the Cavite zone, the minimum wage is regarded more as a loose guideline than as a rigid law. If $6 a day is too onerous, investors can apply to the government for a waiver on that too. So while some zone workers earn the minimum wage, most-thanks to the waivers-earn less.32 Not Low Enough: Squeezing Wages in China Part of the reason the threat of factory flight is so tangible in Cavite is that compared with China, Filipino wages are very high. In fact, everyone's wages are high compared with China. But what is truly remarkable about that is that the most egregious wage cheating goes on inside China itself.

Labor groups agree that a living wage for an assembly-line worker in China would be approximately US87 cents an hour. In the United States and Germany, where multinationals have closed down hundreds of domestic textile factories to move to zone production, garment workers are paid an average of US$10 and $18.50 an hour, respectively.33 Yet even with these massive savings in labor costs, those who manufacture for the most prominent and richest brands in the world are still refusing to pay workers in China the 87 cents that would cover their cost of living, stave off illness and even allow them to send a little money home to their families. A 1998 study of brand-name manufacturing in the Chinese special economic zones found that Wal-Mart, Ralph Lauren, Ann Taylor, Esprit, Liz Claiborne, Kmart, Nike, Adidas, J.C. Penney and the Limited were only paying a fraction of that miserable 87 cents-some were paying as little as 13 cents an hour. (see Yet even with these massive savings in labor costs, those who manufacture for the most prominent and richest brands in the world are still refusing to pay workers in China the 87 cents that would cover their cost of living, stave off illness and even allow them to send a little money home to their families. A 1998 study of brand-name manufacturing in the Chinese special economic zones found that Wal-Mart, Ralph Lauren, Ann Taylor, Esprit, Liz Claiborne, Kmart, Nike, Adidas, J.C. Penney and the Limited were only paying a fraction of that miserable 87 cents-some were paying as little as 13 cents an hour. (see Table 9.3 Table 9.3) The only way to understand how rich and supposedly law-abiding multinational corporations could regress to nineteenth-century levels of exploitation (and get caught repeatedly) is through the mechanics of subcontracting itself: at every layer of contracting, subcontracting and homework, the manufacturers bid against each other to drive down the price, and at every level the contractor and subcontractor exact their small profit. At the end of this bid-down, contract-out chain is the worker-often three or four times removed from the company that placed the original order-with a paycheck that has been trimmed at every turn. "When the multinationals squeeze the subcontractors, the subcontractors squeeze the workers," explains a 1997 report on Nike's and Reebok's Chinese shoe factories.34 "No Union, No Strike"

A large sign is posted at a central intersection in the Cavite Export Processing Zone: "DO NOT LISTEN TO AGITATORS AND TROUBLE MAKERS." The words are in English, painted in bright red capital letters and everyone knows what they mean. Although trade unions are technically legal in the Philippines, there is a widely understood-if unwritten-"no union, no strike" policy inside the zones. As the sign suggests, workers who do attempt to organize unions in their factories are viewed as troublemakers, and often face threats and intimidation.

One of the reasons I went to Cavite is that I had heard this zone was a hotbed of "troublemaking," thanks to a newly formed organization called the Workers' Assistance Center. Attached to Rosario's Catholic church only a few blocks from the zone's entrance, the center is trying to break through the wall of fear that surrounds free-trade zones in the Philippines. Slowly, they have been collecting information about working conditions inside the zone. Nida Barcenas, one of the organizers at the center, told me, "At first, I used to have to follow workers home and beg them to talk to me. They were so scared-their families said I was a troublemaker." But after the center had been up and running for a year, the zone workers flocked there after their shifts-to hang out, eat dinner and attend seminars. I had heard about the center back in Toronto, told by several international labor experts that the research and organizing on free-trade zones coming out of this little bare-bones operation is among the most advanced being done anywhere in Asia.

The Workers' Assistance Center, known as WAC, was founded to support the factory workers' constitutional right to fight for better conditions-zone or no zone. Zernan Toledo is the center's most intense and radical organizer, and though he is only twenty-five and looks like a college student, he runs the center's affairs with all the discipline of a revolutionary cell. "Outside the zone, workers are free to organize a union, but inside they cannot stage pickets or have demonstrations," Toledo told me in my two-hour "orientation session" at the center. "Group discussions in the factories are prohibited and we cannot enter the zone," he said, pointing to a diagram of the zone layout hanging on the wall.35 This catch-22 exists throughout the quasi-private zones. As the International Confederation of Free Trade Unions report puts it: "The workers are effectively living in 'lawless' territory where to defend their rights and interests they are constantly forced to take 'illegal' action themselves." This catch-22 exists throughout the quasi-private zones. As the International Confederation of Free Trade Unions report puts it: "The workers are effectively living in 'lawless' territory where to defend their rights and interests they are constantly forced to take 'illegal' action themselves."36 In the Philippines, the zone's culture of incentives and exceptions, which was intended to be phased out as the foreign companies joined the national economy, has had the opposite effect. Not only have new swallows landed, but unionized factories already in the country have shut themselves down and reopened inside the Cavite Export Processing Zone in order to take advantage of all the incentives. For instance, Marks & Spencer goods used to be manufactured in a unionized factory north of Manila. "It only took ten trucks to bring Marks & Spencer to Cavite," a labor organizer in the area told me. "The union was eliminated."

Cavite is by no means exceptional in this regard. Union organizing is a source of great fear throughout the zones, where a successful drive can have dire consequences for both organizers and workers. That was the lesson learned in December 1998, when the American shirtmaker Phillips-Van Heusen closed down the only unionized export apparel factory in all of Guatemala, laying off five hundred workers. The Camisas Modernas plant was unionized in 1997, after a long and bitter organizing drive and significant pressure placed on the company by U.S. human-rights groups. With the union, wages went up from US$56 a week to $71 and the previously squalid factory was cleaned up. Jay Mazur, president of the Union of Needletrades, Industrial and Textile Employees (UNITE)-America's largest apparel union-called the contract "a beacon of hope for more than 80,000 maquiladora workers in Guatemala."37 When the factory closed, however, the beacon of hope turned into a flashing red danger signal, reinforcing the familiar warning: no union, no strike. When the factory closed, however, the beacon of hope turned into a flashing red danger signal, reinforcing the familiar warning: no union, no strike.

Patriotism and national duty are bound up in the exploitation of the export zones, with young people-mostly women-sent off to sweatshop factories the way a previous generation of young men were sent off to war. No questioning of authority is expected or permitted. In some Central American and Asian EPZs, strikes are officially illegal; in Sri Lanka, it is illegal to do anything at all that might jeopardize the country's export earnings, including publishing and distributing critical material.38 In 1993, a Sri Lankan zone worker by the name of Ranjith Mudiyanselage was killed for appearing to challenge this policy. After complaining about a faulty machine that had sliced off a co-worker's finger, Mudiyanselage was abducted on his way out of an inquiry into the incident. His body was found beaten and burning on a pile of old tires outside a local church. The man's legal adviser, who had accompanied him to the inquiry, was murdered in the same way. In 1993, a Sri Lankan zone worker by the name of Ranjith Mudiyanselage was killed for appearing to challenge this policy. After complaining about a faulty machine that had sliced off a co-worker's finger, Mudiyanselage was abducted on his way out of an inquiry into the incident. His body was found beaten and burning on a pile of old tires outside a local church. The man's legal adviser, who had accompanied him to the inquiry, was murdered in the same way.39 Despite the constant threat of retaliation, the Workers' Assistance Center has made some modest attempts to organize unions inside the Cavite zone factories, with varying degrees of success. For instance, when a drive was undertaken at the All Asia garment factory, the organizers came up against a very challenging obstacle: worker exhaustion. The biggest complaint among the All Asia seamstresses who stitch clothes for Ellen Tracy and Sassoon is forced overtime. Regular shifts last from 7 a.m. to 10 p.m., but on a few nights a week employees must work "late"-until 2 a.m. During peak periods, it is not uncommon to work two 2 a.m. shifts in a row, leaving many women only a couple of hours of sleep before they have to start their commute back to the factory. But that also means most All Asia workers spend their precious thirty-minute breaks at the factory napping, not talking about unions. "I have a hard time talking with the workers because the workers are always very sleepy," a mother of four tells me, explaining why she has had no luck in her attempts to bring a union to the All Asia factory. She has been with the company for four years and still lacks basic job security and health insurance.

Work in the zone is characterized by this brutal combination of tremendous intensity and nonexistent job security. Everyone works six or seven days a week, and when a big order is due to be shipped out, employees work until it is done. Most workers want some overtime hours because they need the money, but the overnight shifts are widely considered a burden. Refusing to stay, however, is not an option. For instance, according to the official rule book of the Philips factory (a contractor that has filled orders for both Nike and Reebok), "Refusal to render overtime work when so required" is an offense "punishable with dismissal." The same is true at all the factories I encountered, and there are many reports of workers asking to leave early-before 2 a.m., for instance-and being told not to return to work the next day.

Overtime horror stories pour out of the export processing zones, regardless of location: in China, there are documented cases of three-day shifts, when workers are forced to sleep under their machines. Contractors often face heavy financial penalties if they fail to deliver on time, no matter how unreasonable the deadline. In Honduras, when filling out a particularly large order on a tight deadline, factory managers have been reported injecting workers with amphetamines to keep them going on forty-eight-hour marathons.40 What Happened to Carmelita...

In Cavite, you can't talk about overtime without the conversation turning to Carmelita Alonzo, who died, according to her co-workers, "of overwork." Alonzo, I was told again and again-by groups of workers gathered at the Workers' Assistance Center and by individual workers in one-on-one interviews-was a seamstress at the V.T. Fashions factory, stitching clothes for the Gap and Liz Claiborne, among many other labels. All of the workers I spoke with urgently wanted me to know how this tragedy happened so that I could explain it to "the people in Canada who buy these products." Carmelita Alonzo's death occurred following a long stretch of overnight shifts during a particularly heavy peak season. "There were a lot of products for ship-out and no one was allowed to go home," recalls Josie, whose denim factory is owned by the same firm as Carmelita's, and who also faced large orders at that time. "In February, the line leader had overnights almost every night for one week." Not only had Alonzo been working those shifts, but she had a two-hour commute to get back to her family. Suffering from pneumonia-a common illness in factories that are suffocatingly hot during the day but fill with condensation at night-she asked her manager for time off to recover. She was denied. Alonzo was eventually admitted to hospital, where she died on March 8, 1997-International Women's Day.

I asked a group of workers gathered late one evening around the long table at the center how they felt about what happened to Carmelita. The answers were confused at first. "Feel? But Carmelita is us." But then Salvador, a sweet-faced twenty-two-year-old from a toy factory, said something that made all of his co-workers nod in vigorous agreement. "Carmelita died because of working overtime. It is possible to happen to any one of us," he explained, the words oddly incongruous with his pale blue Beverly Hills 90210 Beverly Hills 90210 T-shirt. T-shirt.

Much of the overtime stress could be alleviated if the factories would just hire more workers and create two shorter shifts. But why should they? The government official appointed to oversee the zone isn't interested in taking on the factory owners and managers about the overtime violations. Raymondo Nagrampa, the zone administrator, acknowledged that it would certainly be better if the factories hired more people for fewer hours, but, he told me, "I think I will leave that. I think this is more of a management decision."

For their part, the factory owners are in no rush to expand the size of their workforce, because after a big order is filled there could be a dry spell and they don't want to be stuck with more employees than work. Since following Philippine labor law is "a management decision," most decide that it is more convenient for management to have one pool of workers who are simply forced to work more hours when there is more work and fewer when there is less of it. And this is the flip side of the overtime equation: when a factory is experiencing a lull in orders or a shipment of supplies has been delayed, workers are sent home without pay, sometimes for a week at a time. The group of workers gathered around the table at the Workers' Assistance Center burst out laughing when I asked them about job security or a guaranteed number of working hours. "No work, no pay!" the young men and women exclaim in unison.

The "no work, no pay" rule applies to all workers, contract or "regular." Contracts, when they exist, last only five months or less, after which time workers have to "recontract." Many of the factory workers in Cavite are actually hired through an employment agency, inside the zone walls, that collects their checks and takes a cut-a temp agency for factory workers, in other words, and one more level in the multiple-level system that lives off their labor. Management uses a variety of tricks in the different zones to keep employees from achieving permanent status and collecting the accompanying rights and benefits. In the Central American maquiladoras, it is a common practice for factories to fire workers at the end of the year and rehire them a few weeks later so that they don't have to grant them permanent status; in the Thai zones, the same practice is known as "hire and fire."41 In China, many workers in the zones have no contracts at all, which leaves them without any rights or recourse whatsoever. In China, many workers in the zones have no contracts at all, which leaves them without any rights or recourse whatsoever.42 It is in this casual new relationship to factory employment that the EPZ system breaks down completely. In principle, the zones are an ingenious mechanism for global wealth redistribution. Yes, they lure jobs from the North, but few fair-minded observers would deny the proposition that as industrialized nations shift to higher-tech economies, it is only a matter of global justice that the jobs upon which our middle classes were built should be shared with countries still enslaved by poverty. The problem is that the workers in Cavite, and in zones throughout Asia and Latin America, are not inheriting "our" jobs at all. Gerard Greenfield, former research director of the Asian Monitoring and Resource Centre in Hong Kong, says, "One of the myths of relocation is that those jobs that seemed to be transferred from the so-called North to the South are perceived as similar jobs to what was already being done before." They are not. Just as company-owned manufacturing turned-somewhere over the Pacific Ocean-into "orders" to be placed with third-party contractors, so did full-time employment undergo a mid-flight transformation into "contracts." "The biggest challenge to those in Asia," says Greenfield, "is that the new employment created by Western and Asian multinationals investing in Asia is temporary and short-term employment."43 In fact, zone workers in many parts of Asia, the Caribbean and Central America have more in common with office-temp workers in North America and Europe than they do with factory workers in those Northern countries. What is happening in the EPZs is a radical alteration in the very nature of factory work. That was the conclusion of a 1996 study conducted by the International Labor Organization, which stated that the dramatic relocation of production in the garment and shoe industries "has been accompanied by a parallel shift of production from the formal to the informal sector in many countries, with generally negative consequences on wage levels and conditions of work." Employment in these sectors, the study went on, has shifted from "full-time in-plant jobs to part-time and temporary jobs and, especially in clothing and footwear, increasing resort to homework and small shops."44 Indeed, this is not simply a job-flight story.

A Floating Workforce On my last night in Cavite, I met a group of six teenage girls in the workers' dormitories who shared a six-by-eight-foot concrete room: four slept on the makeshift bunk bed (two to a bed), the other two on mats spread on the floor. The girls who made Aztek, Apple and IBM CD-ROM drives shared the top bunk; the ones who sewed Gap clothing, the bottom. All were the children of farmers, away from their families for the first time.

Their jam-packed shoebox of a home had the air of an apocalyptic slumber party-part prison cell, part Sixteen Candles Sixteen Candles. It may have been a converted pigsty, but these were sixteen-year-old girls, and like teenage girls the world over they had covered the gray, stained walls with pictures: of fluffy animals, Filipino action-movie stars, and glossy magazine ads of women modeling lacy bras and underwear. After a little while, serious talk of working conditions erupted into fits of giggles and hiding under bedcovers. It seems that my questions reminded two of the girls of a crush they had on a labor organizer who had recently given a seminar at the Workers' Assistance Center on the risks of infertility from working with hazardous chemicals.

Were they worried about infertility?

"Oh, yes. Very worried now."

All through the Asian zones, the roads are lined with teenage girls in blue shirts, holding hands with their friends and carrying umbrellas to shield them from the sun. They look like students coming home from school. In Cavite, as elsewhere, the vast majority of workers are unmarried women between the ages of seventeen and twenty-five. Like the girls in the dorms, roughly 80 percent of the workers have migrated from other provinces of the Philippines to work in the factories-a mere 5 percent are native to the town of Rosario. Like the swallow factories, they too are only tenuously connected to this place.

Raymondo Nagrampa, the zone administrator, says migrants are recruited for the zone to compensate for something innate in "the Cavite character," something that makes local people unfit to work in the factories situated near their homes. "I don't mean any offense to the Cavite personality," he explained, in his spacious air-conditioned office. "But from what I gather, this particular character is not suited for the factory life-they'd rather go into something quickly. They do not have the patience to be right there in the factory line." Nagrampa attributes this to the fact that Rosario is so close to Manila "and so we can say that the Cavitenians are not running scared with regard to getting some income for their daily subsistence....

"But in the case of those from the provinces, from the lower areas, they are not exposed to the big-city lifestyle. They feel more comfortable just working in the factory line, for, after all, this is a marked improvement from the farm work that they've been accustomed to, where they were exposed to the sun. To them, for the lowly province rural worker, working inside an enclosed factory is better off than being outside."

I asked dozens of zone workers-all of them migrants from rural areas-about what Raymondo Nagrampa had said. Every one of them responded with outrage.

"It's not human!" exclaimed Rosalie, a teenager whose job is installing the "backlights" in IBM computer screens. "Our rights are being trampled and Mr. Nagrampa says that because he has not experienced working in a factory and the conditions inside."

Salvador, in his 90210 90210 T-shirt, was beside himself: "Mr. Nagrampa earns a lot of money and he has an air-conditioned room and his own car, so of course he would say that we prefer this work-it is beneficial to him, but not to us.... Working on the farm is difficult, yes, but there we have our family and friends and instead of always eating dried fish, we have fresh food to eat." T-shirt, was beside himself: "Mr. Nagrampa earns a lot of money and he has an air-conditioned room and his own car, so of course he would say that we prefer this work-it is beneficial to him, but not to us.... Working on the farm is difficult, yes, but there we have our family and friends and instead of always eating dried fish, we have fresh food to eat."

His words clearly struck a chord with a homesick Rosalie: "I want to be together with my family in the province," she said quietly, looking even younger than her nineteen years. "It's better there because when I get sick, my parents are there, but here there is no one to take care of me."

Many other rural workers told me that they would have stayed home if they could, but the choice was made for them: most of their families had lost their farms, displaced by golf courses, botched land-reform laws and more export processing zones. Others said that the only reason they came to Cavite was that when the zone recruiters came to their villages, they promised that workers would earn enough in the factories to send money home to their impoverished families. The same inducement had been offered to other girls their age, they told me, to go to Manila to work in the sex trade.

Several more young women wanted to tell me about those promises, too. The problem, they said, is that no matter how long they work in the zone, there is never more than a few pesos left over to send home. "If we had land we would just stay there to cultivate the land for our needs," Raquel, a teenage girl from one of the garment factories, told me. "But we are landless, so we have no choice but to work in the economic zone even though it is very hard and the situation here is very unfair. The recruiters said we would get a high income, but in my experience, instead of sending my parents money, I cannot maintain even my own expenses."

So the workers in Cavite have lost on all counts: they are penniless and and homeless. It's a potent combination. In the dormitories, sleep deprivation, malnutrition and homesickness mingle to create an atmosphere of deep disorientation. "We are alien in the factories. We are also alien in the boarding-house because we all come from faraway provinces," Liza, an electronics worker, told me. "We are strangers here." homeless. It's a potent combination. In the dormitories, sleep deprivation, malnutrition and homesickness mingle to create an atmosphere of deep disorientation. "We are alien in the factories. We are also alien in the boarding-house because we all come from faraway provinces," Liza, an electronics worker, told me. "We are strangers here."

Cecille Tuico, one of the organizers at the Workers' Assistance Center, was listening in on the conversation. After the workers left to make their way through Rosario's dark streets and back to the dormitories, she pointed out that the alienation the workers so poignantly describe is precisely what the employers look for when they seek out migrants instead of locals to work in the zone. With the same muted, matter-of-fact anger I have come to recognize in so many Filipino human-rights activists, Tuico said that the factory managers prefer young women who are far from home and have not finished high school, because "they are scared and uneducated about their rights."

The Zones' Other Product: A New Kind of Factory Worker Their naivete and insecurity undoubtedly make discipline easier for factory managers, but younger workers are preferred for other reasons, too. Women are often fired from their zone jobs in their mid-twenties, told by supervisors that they are "too old," and that their fingers are no longer sufficiently nimble. This practice is a highly effective way of minimizing the number of mothers on the company payroll.

In Cavite, the workers tell me stories about pregnant women forced to work until 2 a.m., even after pleading with the supervisor; of women who work in the ironing section giving birth to babies with burns on their skin; of women who mold the plastic for cordless phones giving birth to stillborn infants. The evidence I hear in Cavite is anecdotal, told to me quietly and urgently by women with the same terrified expression I saw when conversation turned to Carmelita Alonzo. Some of the stories are certainly apocryphal-fear-fueled zone legends-but the abuse of pregnant women in export processing zones is also well documented and the problem reaches far beyond Cavite.

Because most zone employers want to avoid paying benefits, assigning workers to a predictable schedule or offering any job security, motherhood has become the scourge of these pink-collar zones. A study by Human Rights Watch that has become the basis for a grievance under the NAFTA side agreement on labor found that women applying for jobs in the Mexican maquiladoras routinely had to undergo pregnancy tests. The study, which implicates such investors in the zones as Zenith, Panasonic, General Electric, General Motors and Fruit of the Loom, found that "pregnant women are denied hiring. Moreover, maquiladora employers sometimes mistreat and discharge pregnant employees."45 The researchers uncovered mistreatment designed to encourage workers to resign: pregnant women were required to work the night shift, or to take on exceptionally long hours of unpaid overtime and physically strenuous tasks. They were also refused time off work to go to the doctor, a practice that has led to on-the-job miscarriages. "In this way," the study reports, "a pregnant worker is forced to choose between having a healthy, full-term pregnancy and keeping her job." The researchers uncovered mistreatment designed to encourage workers to resign: pregnant women were required to work the night shift, or to take on exceptionally long hours of unpaid overtime and physically strenuous tasks. They were also refused time off work to go to the doctor, a practice that has led to on-the-job miscarriages. "In this way," the study reports, "a pregnant worker is forced to choose between having a healthy, full-term pregnancy and keeping her job."46 Other methods of sidestepping the costs and responsibilities of employing workers with children are reported on a more haphazard basis throughout the zones. In Honduras and El Salvador the garbage dumps in the zones are littered with empty packets of contraceptive pills that are reportedly passed out on the factory floor. In the Honduran zones there have been reports of management forcing workers to have abortions. At some Mexican maquiladoras, women are required to prove they are menstruating through such humiliating practices as monthly sanitary-pad checks. Employees are kept on twenty-eight-day contracts-the length of the average menstrual cycle-making it easy, as soon as a pregnancy comes to light, for the worker to be dismissed.47 In a Sri Lankan zone, one worker was reported to be so terrified of losing her job after giving birth that she drowned her newborn baby in a toilet. In a Sri Lankan zone, one worker was reported to be so terrified of losing her job after giving birth that she drowned her newborn baby in a toilet.48 The widespread assault on women's reproductive freedoms in the zones is the most brutal expression of the failure on the part of many consumer-goods corporations to live up to their traditional role as mass employers. Today's "new deal" with workers is a non-deal; one-time manufacturers, turned marketing mavens, are so resolutely intent on evading any and all commitments that they are creating a workforce of childless women, a system of footloose factories employing footloose workers. In a letter to Human Rights Watch explaining why it discriminated against pregnant women in the maquiladoras, General Motors stated plainly that it "will not hire female job applicants found to be pregnant" in an effort to avoid "substantial financial liabilities imposed by the Mexican social security system."49 Since the critical report was published, GM has changed the policy. It remains, however, a stark contrast to the days when the company made it a banner policy that the adult men working in its auto plants should earn enough not only to support a family of four but to drive them around in a GM car or truck. General Motors has cut about 82,000 jobs in the U.S. since 1991 and expects to cut another 40,000 by the year 2003, moving production to the maquiladoras and their clones around the globe. Since the critical report was published, GM has changed the policy. It remains, however, a stark contrast to the days when the company made it a banner policy that the adult men working in its auto plants should earn enough not only to support a family of four but to drive them around in a GM car or truck. General Motors has cut about 82,000 jobs in the U.S. since 1991 and expects to cut another 40,000 by the year 2003, moving production to the maquiladoras and their clones around the globe.50 A far cry from those days when it proudly proclaimed, "What's good for General Motors is good for the country." A far cry from those days when it proudly proclaimed, "What's good for General Motors is good for the country."

Migrant Factories Within this reengineered system, the workers aren't the only ones on a day pass. The swallow factories that employ them have been built to maximize flexibility: to follow the tax breaks and incentives, to bend with the currency devaluations and benefit by the strict rule of dictators. In North America and Europe, job flight is a threat with which workers have become all too familiar. A study commissioned by the NAFTA labor commission found that in the United States, between 1993 and 1995, "employers threatened to close the plant in 50 percent of all union certification elections.... Specific, unambiguous threats ranged from attaching shipping labels to equipment throughout the plant with a Mexican address, to posting maps of North America with an arrow pointing from the current plant site to Mexico." The study found that the employers followed through on the threats, shutting down all or part of newly unionized plants, in 15 percent of these cases-triple the closing rate of the pre-NAFTA 1980s.51 In China, Indonesia, India and the Philippines the threat of plant closure and job flight is even more powerful. Since the industries are quick to flee escalating wages, environmental regulation and taxes, factories are made to be mobile. Some of these swallow factories may well be on their third or even fourth flight, and as the history of subcontracting makes clear, they touch down more lightly at each new stop. In China, Indonesia, India and the Philippines the threat of plant closure and job flight is even more powerful. Since the industries are quick to flee escalating wages, environmental regulation and taxes, factories are made to be mobile. Some of these swallow factories may well be on their third or even fourth flight, and as the history of subcontracting makes clear, they touch down more lightly at each new stop.

When the flying multinationals first landed in Taiwan, Korea and Japan, many of their factories were owned and operated by local contractors. In Pusan, South Korea, for instance-known during the eighties as "the sneaker capital of the world"-Korean entrepreneurs ran factories for Reebok, L.A. Gear and Nike. But when, in the late eighties, Korean workers began to rebel against their dollar-a-day wages and formed trade unions to fight for better conditions, the swallows once again took flight. Between 1987 and 1992, 30,000 factory jobs were lost in Korea's export processing zones, and in less than three years one-third of the shoe jobs had disappeared. The story is much the same in Taiwan. The migration patterns have been clearly documented with Reebok's manufacturers. In 1985, Reebok produced almost all its sneakers in South Korea and Taiwan and none in Indonesia and China. By 1995, nearly all those factories had flown out of Korea and Taiwan and 60 percent of Reebok's contracts had landed in Indonesia and China.52 But on this new leg of the journey, the factories were not owned by local Indonesian and Chinese contractors. Instead they were owned and run by the same Korean and Taiwanese companies that ran them before the move. When the multinationals pulled their orders from Korea and Taiwan, their contractors followed, closing up shop in their home countries and building the new factories in countries where labor was still cheap: China, Indonesia, Thailand and the Philippines. One of these contractors-the largest single supplier for Reebok, Adidas and Nike-is a Taiwanese-owned company called Yue Yuen. Yue Yuen has closed most of its factories in its homeland of Taiwan and chased the low wages to China, where it employs 54,000 people in a single factory complex. For Chi Neng Tsai, one of the company's owners, it simply makes good business sense to go where the workers are hungry: "Thirty years ago, when Taiwan was hungry, we also were more productive," he says.53 Taiwanese and Korean bosses are uniquely positioned to exploit this hunger: they can tell workers from personal experience what happens when unions come in and wages go up. And maintaining contractors who have had the rug pulled out from under them once before is a stroke of management genius on the part of the Western multinationals. What better way to keep costs down than to make yesterday's casualties today's wardens?

It is a system that doesn't do much for the sense of stability in Cavite, or for the Philippine economy in general, which is already unusually vulnerable to global forces, since the majority of its companies are owned by foreign investors. As Filipino economist Antonio Tujan told me, "The contractors have displaced the Filipino middleman."54 In fact, Tujan, the director of a Manila-based think tank highly critical of Philippine economic policy, corrects me when I refer to the buildings I saw inside the Cavite Export Processing Zone as "factories." They aren't factories, he says, "they are labor warehouses." In fact, Tujan, the director of a Manila-based think tank highly critical of Philippine economic policy, corrects me when I refer to the buildings I saw inside the Cavite Export Processing Zone as "factories." They aren't factories, he says, "they are labor warehouses."

He explains that since all the materials are imported, nothing is actually manufactured in the factories, only assembled. (The components are manufactured in yet another country, where the workers are more highly skilled, though still cheaper than U.S. or European workers.) It's true, now that Tujan mentions it, that when I climbed up the water tower and looked down on the zone, part of what contributed to the unbearable lightness of Cavite was that apart from one incinerator, there were no smokestacks. That's a bonus for the air quality in Rosario but odd for an industrial park of Cavite's size. Neither was there any local rhyme or reason to what was being produced. When I walked the zone's freshly paved streets, I was surprised by the variety of manufacturing going on. Like most people, I had thought that Asian export zones were mostly filled with garment and electronics producers, but not Cavite: a factory making car seats sat next to one making sneakers, across the way from a factory with dozens of aluminum speedboats piled up by its gate. On another street, the open doors of a factory revealed racks of dresses and jackets, right next to the plant where Salvador made novelty key chains and other small toys. "You see?" says Antonio Tujan. "We have a country whose industry is so deformed, so unbelievably mishmash, that it cannot exist by itself. It's all a myth, you know. They talk about industrialization in the context of globalization, but it's all a myth."

No wonder the promise of industrialization in Cavite feels more like a threat. The place is a development mirage.

The Shoppers Take Flight The fear that the flighty multinationals will once again pull their orders and migrate to more favorable conditions underlies everything that takes place in the zones. It makes for an odd dissonance: despite the fact that they have no local physical holdings-they don't own the buildings, land or equipment-brands like Nike, the Gap and IBM are omnipresent, invisibly pulling all the strings. They are so powerful as buyers that the hands-on involvement owning the factories would entail has come to look, from their perspective, like needless micromanagement. And because the actual owners and factory managers are completely dependent on their large contracts to make the machines run, workers are left in a uniquely weak bargaining position: you can't sit down and bargain with an order form. So even the classic Marxist division between workers and owners doesn't quite work in the zone, since the brand-name multinationals have divested the "means of production," to use Marx's phrase, unwilling to encumber themselves with the responsibilities of actually owning and managing the factories, and employing a labor force.

If anything, the multinationals have more power over production by not owning the factories. Like most committed shoppers, they see no need to concern themselves with how their bargains were produced-they simply pounce on them, keeping the suppliers on their toes by taking bids from slews of other contractors. One contractor, Young II Kim of Guatemala, whose Sam Lucas factory produces clothing for Wal-Mart and J.C. Penney, says of his big-brand clients, "They're interested in a high-quality garment, fast delivery, and cheap sewing charges-and that's all."55 In this cutthroat context, each contractor swears he could deliver the goods cheaper if the brands would only start producing in Africa, Vietnam or Bangladesh, or if they would shift to homeworkers. In this cutthroat context, each contractor swears he could deliver the goods cheaper if the brands would only start producing in Africa, Vietnam or Bangladesh, or if they would shift to homeworkers.

More blatantly, the power of the brands may occasionally be invoked to affect public policy in the countries where export zones are located. Companies or their emissaries may make public statements about how a raise in the legal minimum wage could price a certain Asian country "out of the market," as Nike's and Reebok's contractors have been quick to tell the Indonesian government whenever strikes get out of hand.56 Calling a strike at a Nike factory "intolerable," Anton Supit, chairman of the Indonesian Footwear Association, which represents contractors for Nike, Reebok and Adidas, called on the Indonesian military to intervene. "If the authorities don't handle strikes, especially ones leading to violence and brutality, we will lose our foreign buyers. The government's income from exports will decrease and unemployment will worsen." Calling a strike at a Nike factory "intolerable," Anton Supit, chairman of the Indonesian Footwear Association, which represents contractors for Nike, Reebok and Adidas, called on the Indonesian military to intervene. "If the authorities don't handle strikes, especially ones leading to violence and brutality, we will lose our foreign buyers. The government's income from exports will decrease and unemployment will worsen."57 The corporate shoppers may also help draft international trade agreements to reduce quotas and tariffs, or even lobby a government directly to loosen regulations. In describing the conditions under which Nike decided to begin "sourcing" its shoes in China, for instance, company vice president David Chang explained that "one of the first things we told the Chinese was that their prices had to be more competitive with our other Far East sources because the cost of doing business in China was so enormous.... The hope is for a 20 percent price advantage over Korea." The corporate shoppers may also help draft international trade agreements to reduce quotas and tariffs, or even lobby a government directly to loosen regulations. In describing the conditions under which Nike decided to begin "sourcing" its shoes in China, for instance, company vice president David Chang explained that "one of the first things we told the Chinese was that their prices had to be more competitive with our other Far East sources because the cost of doing business in China was so enormous.... The hope is for a 20 percent price advantage over Korea."58 After all, what price-conscious consumer doesn't comparison shop? And if a shift to a more "competitive" country causes mass layoffs somewhere else in the world, that is somebody else's blood on somebody else's hands. As Levi's CEO Robert Haas said, "This is not a job-flight story." After all, what price-conscious consumer doesn't comparison shop? And if a shift to a more "competitive" country causes mass layoffs somewhere else in the world, that is somebody else's blood on somebody else's hands. As Levi's CEO Robert Haas said, "This is not a job-flight story."

Multinational corporations have vehemently defended themselves against the accusation that they are orchestrating a "race to the bottom" by claiming that their presence has helped to raise the standard of living in underdeveloped countries. As Nike CEO Phil Knight said in 1996, "For the past 25 years, Nike has provided good jobs, improved labor practices and raised standards of living wherever we operate."59 Confronted with the starvation wages in Haiti, a Disney spokesperson told Confronted with the starvation wages in Haiti, a Disney spokesperson told The Globe and Mail The Globe and Mail, "It's a process all developing countries go through, like Japan and Korea, who were at this stage decades ago."60 And there is no shortage of economists to spin the mounting revelations of corporate abuse, claiming that sweatshops are not a sign of eroded rights but a signal that prosperity is just around the corner. "My concern," said famed Harvard economist Jeffrey D. Sachs, "is not that there are too many sweatshops but that there are too few...those are precisely the jobs that were the stepping stones for Singapore and Hong Kong and those are the jobs that have to come to Africa to get them out of back-breaking rural poverty." And there is no shortage of economists to spin the mounting revelations of corporate abuse, claiming that sweatshops are not a sign of eroded rights but a signal that prosperity is just around the corner. "My concern," said famed Harvard economist Jeffrey D. Sachs, "is not that there are too many sweatshops but that there are too few...those are precisely the jobs that were the stepping stones for Singapore and Hong Kong and those are the jobs that have to come to Africa to get them out of back-breaking rural poverty."61 Sachs's colleague Paul Krugman concurred, arguing that in the developing world the choice is not between bad jobs and good jobs but between bad jobs and no jobs. "The overwhelming mainstream view among economists is that the growth of this kind of employment is tremendous good news for the world's poor." Sachs's colleague Paul Krugman concurred, arguing that in the developing world the choice is not between bad jobs and good jobs but between bad jobs and no jobs. "The overwhelming mainstream view among economists is that the growth of this kind of employment is tremendous good news for the world's poor."62 The no-pain-no-gain defense of sweatshops, however, took a severe beating when the currencies of those very countries supposedly benefiting most from this development model began crashing like cheap plates. First in Mexico, then Thailand, South Korea, the Philippines and Indonesia, workers were, and in many cases still are, bringing home minimum-wage paychecks worth less than when the "economic miracle" first came to bless their nations years ago. Nike's public-relations director, Vada Manager, used to claim that "the job opportunities that we have provided to women and men in developing economies like Vietnam and Indonesia have provided a bridge of opportunity for these individuals to have a much better quality of life,"63 but by the winter of 1998, nobody knew better than Nike that that bridge had collapsed. With currency devaluation and soaring inflation, real wages in Nike's Indonesian factories fell by 45 percent in 1998. but by the winter of 1998, nobody knew better than Nike that that bridge had collapsed. With currency devaluation and soaring inflation, real wages in Nike's Indonesian factories fell by 45 percent in 1998.64 In July of that year, Indonesian president B.J. Habibie urged his 200 million citizens to do their part to conserve the country's dwindling rice supply by fasting for two days out of each week, from dawn until dusk. Development built on starvation wages, far from kick-starting a steady improvement in conditions, has proved to be a case of one step forward, three steps back. And by early 1998 there were no more shining Asian Tigers to point to, and those corporations and economists that had mounted such a singular defense of sweatshops had had their arguments entirely discredited. In July of that year, Indonesian president B.J. Habibie urged his 200 million citizens to do their part to conserve the country's dwindling rice supply by fasting for two days out of each week, from dawn until dusk. Development built on starvation wages, far from kick-starting a steady improvement in conditions, has proved to be a case of one step forward, three steps back. And by early 1998 there were no more shining Asian Tigers to point to, and those corporations and economists that had mounted such a singular defense of sweatshops had had their arguments entirely discredited.

The fear of flying has been looming large in Cavite of late. The currency began its downward spiral a few weeks before I arrived, and since then conditions have only worsened. By early 1999, the price of basic commodities like cooking oil, sugar, chicken and soap had increased by as much as 36 percent from the year before. Paychecks that barely made ends meet now no longer accomplish even that. Workers who had begun to find the courage to stand up to management are now living not only under the threat of mass layoffs and factory flight but with the reality. In 1998, 3,072 businesses in the Philippines either closed down or scaled back operation-a 166 percent increase over the year before.65 For its part, Nike has laid off 268 workers at the Philips factory, where I had seen, through the surrounding fence, the shoes lying in great piles. A few months later, in February 1999, Nike pulled out of two other Philippine factories as well, these ones located in the nearby Bataan export zone; 1,505 workers were affected by the closures. For its part, Nike has laid off 268 workers at the Philips factory, where I had seen, through the surrounding fence, the shoes lying in great piles. A few months later, in February 1999, Nike pulled out of two other Philippine factories as well, these ones located in the nearby Bataan export zone; 1,505 workers were affected by the closures.66 But Phil Knight didn't have to do the dirty work himself-he just cut the orders and left the rest to the contractors. Like the factories themselves, these job losses went unswooshed. But Phil Knight didn't have to do the dirty work himself-he just cut the orders and left the rest to the contractors. Like the factories themselves, these job losses went unswooshed.

The transience woven into the fabric of free-trade zones is an extreme manifestation of the corporate divestment of the world of work, which is taking place at all levels of industry. Cavite may be capitalism's dream vacation, but casualization is a game that can be played at home, and contracting out, as Business Week Business Week reporter Aaron Bernstein has written, is trickling up. "While outsourcing started in manufacturing in the early 1980s, it has expanded through virtually every industry as companies rush to shed staff in everything from human resources to computer systems." reporter Aaron Bernstein has written, is trickling up. "While outsourcing started in manufacturing in the early 1980s, it has expanded through virtually every industry as companies rush to shed staff in everything from human resources to computer systems."67 The same impetus that lies behind the brands-versus-products and contracts-versus-jobs conflict is fueling the move to temp, part-time, freelance and homework in North America and Europe, as we will see in the next chapter. The same impetus that lies behind the brands-versus-products and contracts-versus-jobs conflict is fueling the move to temp, part-time, freelance and homework in North America and Europe, as we will see in the next chapter.

This is not a job-flight story. It is a flight-from-jobs story.

The quintessential free agent. Based on a "culture jam" from Adbusters Adbusters.

Chapter Ten.

Threats and Temps From Working for Nothing to "Free Agent Nation"

A sense of impermanence is blowing through the labor force, destabilizing everyone from office temps to high-tech independent contractors to restaurant and retail clerks. Factory jobs are being outsourced, garment jobs are morphing into homework, and in every industry, temporary contracts are replacing full, secure employment. In a growing number of instances, even CEOs are opting for shorter stints at one corporation after another, breezing in and out of different corner offices and purging half the employees as they come and go.

Almost every major labor battle of the decade has focused not on wage issues but on enforced casualization, from the United Parcel Service workers' stand against "part-time America" to the unionized Australian dockworkers fighting their replacement by contract workers, to the Canadian autoworkers at Ford and Chrysler striking against the outsourcing of their jobs to nonunion factories. All these stories are about different industries doing variations on the same thing: finding ways to cut ties to their workforce and travel light. The underbelly of the shiny "brands, not products" revelation can be seen increasingly in every workplace around the globe. Every corporation wants a fluid reserve of part-timers, temps and freelancers to help it keep overheads down and ride the twists and turns in the market. As British management consultant Charles Handy says, savvy companies prefer to see themselves as "organizers" of collections of contractors, as opposed to "employment organizations."1 One thing is certain: offering employment-the steady kind, with benefits, holiday pay, a measure of security and maybe even union representation-has fallen out of economic fashion. One thing is certain: offering employment-the steady kind, with benefits, holiday pay, a measure of security and maybe even union representation-has fallen out of economic fashion.

Branded Work: Hobbies, Not Jobs Though an entire class of consumer-goods companies has transcended the need to produce what it sells, so far not even the most weightless multinational has been able to free itself entirely from the burden of employees. Production may be relegated to contractors, but clerks are still needed to sell the brand-name goods at the point of purchase, especially given the growth of branded retail. In the service industry, however, big-brand employers have become artful at dodging most commitments to their employees, expertly fostering the notion that their clerks are somehow not quite legitimate workers, and thus do not really need or deserve job security, livable wages and benefits.

Most of the large employers in the service sector manage their workforce as if their clerks didn't depend on their paychecks for anything essential, such as rent or child support. Instead, retail and service employers tend to view their employees as children: students looking for summer jobs, spending money or a quick stopover on the road to a more fulfilling and better-paying career. These are great jobs, in other words, for people who don't really need them. And so the mall and the superstore have given birth to a ballooning subcategory of joke jobs-the frozen-yogurt jerk, the Orange Julius juicer, the Gap greeter, the Prozac-happy Wal-Mart "sales associate"-that are notoriously unstable, low-paying and overwhelmingly part-time. (see Table 10.1 Table 10.1) What is distressing about this trend is that over the past two decades, the relative importance of the service sector as a source of jobs has soared. The decline in manufacturing, as well as the waves of downsizing and cutbacks in the public sector, have been met by dramatic growth in the numbers of service-sector jobs to the extent that services and retail now account for 75 percent of total U.S. employment.2 (see (see Table 10.2 Table 10.2) Today, there are four and a half times as many Americans selling clothes in specialty and department stores as there are workers stitching and weaving them, and Wal-Mart isn't just the biggest retailer in the world, it is also the largest private employer in the United States.

And yet despite these shifts in employment patterns, most brand-name retail, service and restaurant chains have opted to put on economic blinders, insisting that they are still offering hobby jobs for kids. Never mind that the service sector is now filled with workers who have multiple university degrees, immigrants unable to find manufacturing jobs, laid-off nurses and teachers, and downsized middle managers. Never mind, too, that the students who do work in retail and fast food-as many of them do-are facing higher tuition costs, less financial assistance from parents and government and more years in school. Never mind that the food service workforce has been steadily aging over the last decade so that more than half are now over twenty-five years old. (see Table 10.3 Table 10.3) Or that a 1997 study found that 25 percent of non-management Canadian retail workers had been with the same company for eleven years or more and that 39 percent had been there for between four and ten years.3 That's a lot longer than "Chainsaw" Al Dunlap lasted as CEO of Sunbeam Corp. But never mind all that. Everyone knows that a job in the service sector is a hobby, and retail is a place where people go for "experience," not a livelihood. That's a lot longer than "Chainsaw" Al Dunlap lasted as CEO of Sunbeam Corp. But never mind all that. Everyone knows that a job in the service sector is a hobby, and retail is a place where people go for "experience," not a livelihood.

Nowhere has this message been more successfully absorbed than at the cash register and the takeout counter, where many workers say they feel as if they are just passing through even after logging a decade in the McWork sector. Brenda Hilbrich, who works at Borders Books and Music in Manhattan, explains how difficult it is to reconcile the quality of her employment with a sense of personal success: "You're stuck with this dichotomy of 'I'm supposed to do better but yet I can't because I can't find another job.' So you tell yourself, 'I'm only here temporarily because I'm going to find something better.'"4 This internalized state of perpetual transience has been convenient for service-sector employers who have been free to let wages stagnate and to provide little room for upward mobility, since there is no urgent need to improve the conditions of jobs that everyone agrees are only temporary. Borders clerk Jason Chappell says that the retail chains work hard to reinforce feelings of transience in their workers in order to protect this highly profitable formula. "So much of the company propaganda is convincing you that you're not workers, that it's something else, that you're not working class.... Everyone thinks they are middle class even when they're making $13,000 a year." This internalized state of perpetual transience has been convenient for service-sector employers who have been free to let wages stagnate and to provide little room for upward mobility, since there is no urgent need to improve the conditions of jobs that everyone agrees are only temporary. Borders clerk Jason Chappell says that the retail chains work hard to reinforce feelings of transience in their workers in order to protect this highly profitable formula. "So much of the company propaganda is convincing you that you're not workers, that it's something else, that you're not working class.... Everyone thinks they are middle class even when they're making $13,000 a year."5 Table 10.2 Employment by Selected Industry, 1997 Source for U.S. figures: "Employment and Earnings," Bureau of Labor Statistics. Source for Canadian figures: "Annual Estimates of Employment, Earnings and Hours 19851997," Statistics Canada. Source for U.K. figures: Office for National Statistics.

I met with Chappell and Hilbrich late one night in October 1997, at a deli in Manhattan's financial district. We chose this place because it was close to the Borders outlet at the base of the World Trade Center where they both work. I had heard about the pair because of their successful efforts to bring a union to Borders, part of a flurry of labor organizing inside the large chains since the mid-nineties: at Starbucks, Barnes & Noble, Wal-Mart, Kentucky Fried Chicken, McDonald's. It seems as if more and more of the twenty-something-going-on-thirty-something clerks working for the superbrands are looking around-at the counters in front of them where they serve Sumatran coffee, and at the best-selling books, and made-in-China sweaters-and are acknowledging that, for better or worse, some of them aren't going anywhere fast. Laurie Bonang, who works at Starbucks in Vancouver, British Columbia, told me that "people our age are finally realizing that we get out of university, we're a zillion dollars in debt, and we're working in Starbucks. This isn't how we want to spend the rest of our lives, but for right now the dream job isn't waiting for us anymore.... I was hoping that Starbucks would be a stepping stone to bigger and better things, but unfortunately it's a stepping stone to a big sinkhole."6 As Bonang told her story, she was painfully aware that she is living out one of the most hackneyed pop-culture cliches of our branded age: this is the stuff of Saturday Night Live Saturday Night Live's "Gap Girls" skit, circa 1993, in which bored, underemployed mall chicks ask each other: "Didja cinch it?" Or of the Starbucks "baristas" who rattle off long trains of coffee adjectives-grande-decaf-low-fat-moccacino-in movies like You've Got Mail You've Got Mail. But there is a reason why the most vocally unhappy service-sector workers are the ones working for the highest-profile global retailers and restaurants. Large chains such as Wal-Mart, Starbucks and the Gap, as they have proliferated since the mid-eighties, have been lowering workplace standards in the service sector, fueling their marketing budgets, imperialistic expansion and high-concept "retail experiences" by lowballing their clerks on wages and hours. Most of the big-name brands in the service sector pay the legal minimum wage or slightly more, even though the average wage for retail workers is several dollars higher.7 Wal-Mart clerks in the U.S., for instance, earn an average of $7.50 an hour and since Wal-Mart classifies "full time" as twenty-eight hours a week, the average annual income is $10,920-significantly less than the industry average. (see Wal-Mart clerks in the U.S., for instance, earn an average of $7.50 an hour and since Wal-Mart classifies "full time" as twenty-eight hours a week, the average annual income is $10,920-significantly less than the industry average. (see Table 10.4 Table 10.4)8 Kmart wages are also low and the benefits are considered so substandard that when a 172,000-square-foot Super Kmart opened in San Jose, California, in October 1997, the local city council voted to endorse a boycott of the retailer. Council member Margie Fernandes said that the low wages, minimal health benefits and part-time hours are far below those provided by other area retailers, and that these are not the kind of jobs the community needs. "San Jose is a very, very expensive place to live and we need to make sure the people who work here can afford to live here," Fernandes explained. Kmart wages are also low and the benefits are considered so substandard that when a 172,000-square-foot Super Kmart opened in San Jose, California, in October 1997, the local city council voted to endorse a boycott of the retailer. Council member Margie Fernandes said that the low wages, minimal health benefits and part-time hours are far below those provided by other area retailers, and that these are not the kind of jobs the community needs. "San Jose is a very, very expensive place to live and we need to make sure the people who work here can afford to live here," Fernandes explained.9 McDonald's and Starbucks staff, meanwhile, frequently earn less than the employees of single-outlet restaurants and cafes, which explains why McDonald's is widely credited for pioneering the throwaway "McJob" that the entire fast-food industry has since moved to emulate. At Britain's McLibel Trial, in which the company contested claims made by two Greenpeace activists about its employment practices, international trade unionist Dan Gallin defined a McJob as "a low skill, low pay, high stress, exhausting and unstable job."10 Though the activists on trial for libel were found guilty on several counts, in his verdict Chief Justice Rodger Bell ruled that in the matter of McJobs the defendants had a point. The chain has had a negative impact on food-service wages as a whole, he wrote, and the allegation that McDonald's "pays its workers low wages, helping to depress wages for workers in the catering trade in Britain has been proved to be true. It is justified." Though the activists on trial for libel were found guilty on several counts, in his verdict Chief Justice Rodger Bell ruled that in the matter of McJobs the defendants had a point. The chain has had a negative impact on food-service wages as a whole, he wrote, and the allegation that McDonald's "pays its workers low wages, helping to depress wages for workers in the catering trade in Britain has been proved to be true. It is justified."11 As we have seen in Cavite, the brand-name multinationals have freed themselves of the burden of providing employees with a living wage. In the malls of North America and England, on the high street, in the food court and at the superstore, they have managed a similar trick. In some cases, particularly in the garment sector, these retailers are the very same companies that are doing business in the export processing zones, meaning that their responsibilities as employers have been sharply reduced at both the production and service ends of the economic cycle. Wal-Mart and the Gap, for instance, contract out their production to EPZs dotting the Southern Hemisphere, where goods are produced mostly by women in their teens and twenties who earn minimum wage or less and live in cramped dorm rooms. Those goods-sweatshirts, baby clothes, toys and Walkmans-are then sold by another workforce, concentrated in the North, which is also largely filled with young people earning approximately minimum wage, most in their teens and early twenties.

Though in many ways it is indecent to compare the relative privilege of retail workers at the mall with the abuse and exploitation suffered by zone workers, there is an undeniable pattern at work. In general, the corporations in question have ensured that they do not have to confront the possibility that adults with families are depending on the wages that they pay, whether at the mall or in the zone. Just as factory jobs that once supported families have been reconfigured in the Third World as jobs for teenagers, so have the brand-name clothing companies and restaurant chains given legitimacy to the idea that fast-food and retail-sector jobs are disposable, and unfit for adults.

As in the zones, the youthfulness of the sector is far from accidental. It reflects a distinct preference on the part of service-sector employers, achieved through a series of overt and covert management actions. Young workers are consistently hired over older ones, and workers who have been on staff for a few years-building up higher wages and seniority-often report losing precious shifts to new batches of younger and cheaper clerks. Other anti-adult tactics have included the targeting of older workers for harassment-the issue that served as the catalyst for the first strike at a McDonald's outlet. In April 1998, after witnessing a verbally abusive supervisor reduce an elderly co-worker to tears, the teenage workers at the Golden Arches in Macedonia, Ohio, walked off the job in protest. They didn't return until management agreed to undergo "people skills" training. "We get verbally harassed, and physically too. Not me, but basically just the elderly woman," teen striker Bryan Drapp said on Good Morning America Good Morning America. Drapp was fired two months later.12 Brenda Hilbrich of Borders contends that justifying low wages on the grounds that young workers are just passing through is a handy self-fulfilling prophecy-particularly in her field, bookselling. "It doesn't have to have a high turnover," she says. "If the conditions are good and you're making a nice salary, people actually like working in the service industry. They like working with books. A lot of people who have left have said, 'This was my favorite job, but I had to go because I can't make enough money to live.'"13 The fact is that the economy needs steady jobs that adults can live on. And it's clear that many people would stay in retail if it paid adult rates, the proof being that when the sector does pay decently, it attracts older workers, and the rate of staff turnover falls in line with the rest of the economy. But at the large chains, which seem at least for now to have bottomless resources to build superstores and to sink millions into expanding and synergizing their brands, the idea of paying a living wage is rarely considered. At Borders, where most clerks earn wages in line with other bookstore chains but below the retail average, company president Richard L. Flanagan wrote a letter to all his clerks, addressing the question of whether Borders could pay a "living wage" as opposed to what it reportedly pays now-between US$6.63 and $9.27 an hour. "While the concept is romantically appealing," he wrote, "it ignores the practicalities and realities of our business environment."14 Much of what makes paying a living wage seem so "romantic" has to do with the rapid expansion described in Part II, "No Choice." For companies whose business plans depend upon becoming dominant in their market before their nearest competitor beats them to it, new outlets come before workers-even when those workers are a key part of the chain's image. "They expect us to look like a Gap ad, professional, clean and neat all the time, and I can't even pay to do laundry," says Laurie Bonang of Starbucks. "You can buy two grande mocha cappuccinos with my hourly salary." Like millions of her demographic coevals on the payrolls of all-star brands like the Gap, Nike and Barnes & Noble, Bonang is living inside a stunning corporate success story-though you'd never know it from the resignation and anger in her voice. All the brand-name retail workers I spoke with expressed their frustration at helping their stores rake in, to them, unimaginable profits, and then having to watch that profit get funneled into compulsive expansion. Employee wages, meanwhile, stagnate or even decline. At Starbucks in British Columbia new workers faced an actual wage decrease-from Can$7.50 to $7 an hour-during a period when the chain was doubling its profits and opening 350 new stores a year. "I do the banking. I know how much the store pulls in a week," Laurie Bonang says. "They just take all that revenue and open up new stores."15 Borders clerks also maintain that wages have suffered as a result of rapid growth. They say that their chain used to be a more equitable place to work before the neck-and-neck race with Barnes & Noble took over corporate priorities; there was a profit-sharing program and a biannual 5 percent raise for all workers. "Then came expansion and corresponding cuts," reads a statement from disgruntled employees at a downtown Philadelphia outlet of Borders. "Profit sharing was dropped, raises were cut..."16 In sharp contrast to the days when corporate employees took pride in their company's growth, seeing it as the result of a successful group effort, many clerks have come to see themselves as being in direct competition with their employers' expansion dreams. "If Borders opened thirty-eight new stores a year instead of forty," reasoned Jason Chappell, sitting next to Brenda Hilbrich on the vinyl seats of our deli booth, "they could afford to give us a nice wage increase. On average it costs $7 million to open a superstore. That's Borders' own figures...."

"But," Brenda interrupted, "if you say that directly to them, they say, 'Well, that's two markets we don't get into.'"

"We have to saturate markets," Chappell said, nodding.

"Yeah," Brenda added. "We have to compete with Barnes & Noble."

The retail clerks employed by the superchains are only too familiar with the manic logic of expansion.

Busting the McUnion The need to prevent workers from weighing too heavily on the bottom line is the main reason that the branded chains have fought off the recent wave of unionization with such ferocity. McDonald's, for instance, has been embroiled in bribery scandals during German union drives, and over the course of a 1994 union drive in France, ten McDonald's managers were arrested for violating labor laws and trade-union rights.17 In June 1998, the company fired the two young workers who organized the strike in Macedonia, Ohio. In June 1998, the company fired the two young workers who organized the strike in Macedonia, Ohio.18 In 1997, when the employees at a Windsor, Ontario, Wal-Mart were about to hold an election on joining a union, a series of not-so-subtle management hints led many workers to believe that if they voted yes their store would be shut down. The Ontario Labour Relations Board reviewed the process and found that the behavior of Wal-Mart managers and supervisors before the vote amounted to "a subtle but extremely effective threat," which caused "the average reasonable employee to conclude that the store would close if the union got in." In 1997, when the employees at a Windsor, Ontario, Wal-Mart were about to hold an election on joining a union, a series of not-so-subtle management hints led many workers to believe that if they voted yes their store would be shut down. The Ontario Labour Relations Board reviewed the process and found that the behavior of Wal-Mart managers and supervisors before the vote amounted to "a subtle but extremely effective threat," which caused "the average reasonable employee to conclude that the store would close if the union got in."19 Other chains have not hesitated to make good on the threat to close. In 1997, Starbucks decided to shut down its Vancouver distribution plant after workers unionized. In February 1998, just as a union certification for a Montreal-area outlet of McDonald's was being reviewed by the Quebec Labour Commission, the franchise owner closed down the outlet. Shortly after the closure, the labor commission accredited the union-cold comfort, since no one works there anymore. Six months later, another McDonald's restaurant was successfully unionized, this one a busy outlet in Squamish, British Columbia, near the Whistler ski resort. The organizers were two teenage girls, one sixteen, the other seventeen. It wasn't about wages, they said-they were just tired of being scolded like children in front of the customers. The outlet remains open, making it the only unionized McDonald's in North America, but at the time of writing, the company was on the verge of having the union decertified. Fighting the battle on the public-relations front, in mid-1999 the fast-food chain launched an international television campaign featuring McDonald's workers serving up shakes and fries under the captions "future lawyer," "future engineer" and so on. Here was the true McDonald's workforce, the company seemed to be saying: happy, contented and just passing through.

During the late 1990s, the process of turning the service sector into a low-wage ghetto advanced rapidly in Germany. The German unemployment rate reached 12.6 percent in 1998, primarily because the economy could not absorb the massive layoffs in the manufacturing sector that occurred after reunification-four out of five East German factory jobs were lost. To make up for the shortfall, the service sector was touted by the business press and the political right wing as the economic panacea. There was just one catch: before the mall could step in to save the German economy, the minimum wage would have to be substantially lowered and benefits such as long holidays for all workers would have to be dismantled. In other words, good jobs with security and a living wage would have to be turned into bad jobs. Then Germany too would enjoy the benefits of a service-based economic recovery.

It is one of the paradoxes of service-sector employment that the more prominent a role it plays in the labor landscape, the more casual service-sector companies became in their attitude toward providing job security. Nowhere is this more in evidence than in the industry's increasing reliance on part-timers. (see Table 10.5 Table 10.5) Starbucks, for instance, staffs its outlets almost exclusively with part-timers while only one-third of Kmart's workforce is full-time. Workers at the ill-fated Montreal-area McDonald's cited as their principal reason for unionization the fact that they often couldn't get shifts longer than three hours.

In the U.S. the number of part-timers has tripled since 1968, while in Canada, between 1975 and 1997, the growth rate of part-time jobs was nearly three times the rate of full-time jobs.20 But the problem is not the part-time nature of work per se. In Canada, only one-third of part-timers want but cannot find full-time jobs (which is an increase from one-fifth in the late eighties). In the U.S., only one-quarter want full-time jobs but can't find them. The vast majority of part-timers are students and women, many of whom are juggling childcare and paid work. (see But the problem is not the part-time nature of work per se. In Canada, only one-third of part-timers want but cannot find full-time jobs (which is an increase from one-fifth in the late eighties). In the U.S., only one-quarter want full-time jobs but can't find them. The vast majority of part-timers are students and women, many of whom are juggling childcare and paid work. (see Table 10.6 Table 10.6) But while many workers are indeed drawn to flexible work arrangements, their definition of what constitutes "flexibility" is dramatically different from the one favored by service-sector bosses. For instance, while studies have shown that working mothers define flexibility as "having the ability to work less than full-time hours at decent wages and benefits, while still working a regular schedule,"21 the service sector has a different view of part-time work, and a different agenda. A handful of brand-name chains, including Starbucks and Borders, bolster low wages by offering health and dental benefits to their part-timers. For other employers, however, part-time positions are used as a loophole to keep wages down and to avoid benefits and overtime; "flexibility" becomes a code for "no promises," making the juggling of other commitments-both financial and parental-more challenging, not less. At some retail outlets I've researched, the allotment of hours is so random that the ritual of posting next week's schedule prompts the staff to gather around anxiously, craning their necks and hopping up and down as if they are checking to see who got the lead in the high-school musical. the service sector has a different view of part-time work, and a different agenda. A handful of brand-name chains, including Starbucks and Borders, bolster low wages by offering health and dental benefits to their part-timers. For other employers, however, part-time positions are used as a loophole to keep wages down and to avoid benefits and overtime; "flexibility" becomes a code for "no promises," making the juggling of other commitments-both financial and parental-more challenging, not less. At some retail outlets I've researched, the allotment of hours is so random that the ritual of posting next week's schedule prompts the staff to gather around anxiously, craning their necks and hopping up and down as if they are checking to see who got the lead in the high-school musical.

Furthermore, the "part-time" classification is often more a technicality than a reality, with retail employers keeping their part-timers just below the forty-hour legal cutoff for full-time-Laurie Bonang, for instance, clocks between thirty-five and thirty-nine hours a week at Starbucks. For all intents and purposes, she has the duties of a full-time employee, but under forty hours the company does not have to pay overtime or guarantee full-time hours. Other chains are equally creative. Borders instituted a company-wide thirty-seven-and-a-half-hour work week for all employees, and Wal-Mart caps its work week at thirty-three hours, defining base "full time" as twenty-eight hours. What all of this means in the lives of workers is a scheduling roller coaster that in many ways is more demanding than the traditional forty-hour week. For instance, the Gap-which defines full-time as thirty hours a week-has a system of keeping clerks "on call" for certain shifts during which time they aren't scheduled or paid to work but must be available to come in if the manager calls. (One worker joked to me that she had to buy a beeper in case a folding crisis flared up in Gap Kids.) Starbucks has been the most innovative in the modern art of supple scheduling. The company has created a software program called Star Labor that allows head office maximum control over the schedules of its clerks down to the minute. With Star Labor, gone is anything as blunt and imprecise as a day or evening shift. The software measures exactly when each latte is sold and by whom, then tailor-makes shifts-often only a few hours long-to maximize coffee-selling efficiency. As Laurie Bonang explains, "They give you an arbitrary skill number from one to nine and they plug in when you're available, how long you've been there, when customers come in and when we need more staff, and the computer spits out your schedule based on that."22 While Starbucks' breakthrough in "just-in-time" frothing looks great on a spreadsheet, for Steve Emery it meant hauling himself out of bed to start work at 5 a.m., only to leave at 9:30 a.m. after the morning rush had peaked and, according to Star Labor, he was no longer working at maximum efficiency. Wal-Mart has introduced a similar centralized scheduling system, effectively reducing employee hours by pinning them precisely to in-store traffic. "It's done just like we order merchandise," says Wal-Mart CEO David Glass. While Starbucks' breakthrough in "just-in-time" frothing looks great on a spreadsheet, for Steve Emery it meant hauling himself out of bed to start work at 5 a.m., only to leave at 9:30 a.m. after the morning rush had peaked and, according to Star Labor, he was no longer working at maximum efficiency. Wal-Mart has introduced a similar centralized scheduling system, effectively reducing employee hours by pinning them precisely to in-store traffic. "It's done just like we order merchandise," says Wal-Mart CEO David Glass.23 The vast gulf between employee and employer definitions of "flexibility" was the central issue of the United Parcel Service strike in the summer of 1997, the largest U.S. job action in fourteen years. Despite profits of $1 billion in 1996, UPS had kept 58 percent of its workers classified as part-time and was rapidly moving toward an even more "flexible" workforce. Of the 43,000 jobs UPS had created since 1992, only 8,000 were full time. The system worked well for the courier company, since it was able to ride the peaks and valleys of the delivery cycle that sees heavy pickups and deliveries in the morning and evening but lulls during the day. "There's too much downtime in between to hire full-time workers," explained UPS spokesperson Susan Rosenberg.24 Building up a part-time workforce had other cost-saving benefits. Before the strike, the company paid its part-timers roughly half the hourly wage of its full-timers for performing the same tasks.25 Furthermore, the union claimed that 10,000 of the company's so-called part-timers were, like Laurie Bonang at Starbucks, actually working between thirty-five and thirty-nine hours a week-just under the cutoff that would require overtime pay, full benefits and the higher wage scale. Furthermore, the union claimed that 10,000 of the company's so-called part-timers were, like Laurie Bonang at Starbucks, actually working between thirty-five and thirty-nine hours a week-just under the cutoff that would require overtime pay, full benefits and the higher wage scale.

Some service-sector companies have made much of the fact that they offer stock options or "profit-sharing" to low-level employees, among them Wal-Mart, which calls its clerks "sales associates" Borders, which refers to them as "co-owners" and Starbucks, which prefers the term "partners." Many employees do appreciate these gestures, but others claim that while the workplace democracy schemes sparkle on a corporate Web site, they rarely translate into much of substance. Most part-time workers at Starbucks, for instance, can't afford to buy into the employee stock-option program since their salaries barely cover their expenses. And where profit-sharing schemes are automatic, as at Wal-Mart, workers say their "share" of the $118 billion of annual sales their company hauls in is laughable. Clerks in the Windsor, Ontario, outlet of Wal-Mart, for example, say they only saw an extra $70 during the first three years that their store was open. "Never mind that from the viewpoint of the boardroom, the pension plan's best feature was that it kept 28 million more shares in firm control of company executives," writes The Wall Street Journal The Wall Street Journal's Bob Ortega of the Wal-Mart plan. "Most workers perceived perceived that they could cash in, so the cost of the plan paid off in spades by helping keep the unions out and the wages low" (italics his). that they could cash in, so the cost of the plan paid off in spades by helping keep the unions out and the wages low" (italics his).26 Free Work: More Fake Jobs, Courtesy of the Superbrands One thing you can say about the retail and service industries: at least they pay their workers a little something for their trouble. Not so for some other industries that have liberated themselves from the chains of social-security forms with such free-market gusto that many young workers receive no pay from them at all. Perhaps predictably, the culture industry has led the way in the blossoming of unpaid work, blithely turning a blind eye to the unglamorous fact that many people under thirty are saddled with the mundane responsibility of actually having to support themselves.

Writing about his former job, which involved hiring unpaid interns to send faxes and run errands for Men's Journal Men's Journal magazine, Jim Frederick notes that many of his applicants had already worked for nothing at magazine, Jim Frederick notes that many of his applicants had already worked for nothing at Interview Interview, CBS News, MTV, The Village Voice The Village Voice and so on. "'Very impressive,' I would say. By my quick calculations they had contributed, conservatively, five or six thousand dollars' worth of uncompensated work to various media conglomerates." and so on. "'Very impressive,' I would say. By my quick calculations they had contributed, conservatively, five or six thousand dollars' worth of uncompensated work to various media conglomerates."27 Of course, the media conglomerates-the broadcasters, magazines and book publishers-insist that they are generously offering young people precious experience in a hard employment market-a foot in the door on the old-fashioned "apprenticeship" model. Besides, they say, sounding suspiciously like McDonald's managers the world over, the interns are just kids-they don't really Of course, the media conglomerates-the broadcasters, magazines and book publishers-insist that they are generously offering young people precious experience in a hard employment market-a foot in the door on the old-fashioned "apprenticeship" model. Besides, they say, sounding suspiciously like McDonald's managers the world over, the interns are just kids-they don't really need need the money. the money.

And getting two "unreal" jobs for the price of one, most interns subsidize their unpaid day job by working in the service industry at night and on weekends, as well as by living at home to a later age. But in the U.S.-where it has become commonplace to hop from one unpaid culture job to the next for a year or two-a disproportionate number of interns, as Frederick observes, appear to be living off trust funds, seemingly without any immediate concerns about earning a living. But just as the service-sector employers will not admit that the youthfulness of their workforce might have something to do with the wages they pay and the security they fail to offer, you will never catch a television network or a publisher confessing that the absence of remuneration for internships might also have something to do with the relative privilege of those applying for these positions at their companies. This racket is not only exploitative in the classic sense, it also has some very real implications for the future of cultural production: today's interns are tomorrow's managers, producers and editors and, as Frederick writes, "If you can't get a job unless you've had an internship, and you can't take an internship unless you can get supported by daddy for a couple of months, then the system guarantees an applicant pool that is decidedly privileged."28 Music video stations such as MTV have been among the more liberal users of the unpaid internship system. When it was first introduced, the music video channel represented a managerial coup in low-cost, high-profit broadcasting since the stations primarily play videos that are produced out of house and supplied by record labels. While some stations, including Canada's MuchMusic, now play licensing and royalty fees to broadcast videos, these pale in comparison to the production costs of the videos in a single top 30 countdown. Inside the stations, on air-hosts, producers and technicians work alongside unpaid, mostly student, interns who sometimes are rewarded with jobs and sometimes stay at the station for many months, hoping for their big break. Which is where the legendary success stories come in-the famous V.J. who started off answering phones, or the greatest success story of them all: the tale of Rick the Temp. In 1996, Rick won the annual "Be a Temp at MuchMusic Contest" and was welcomed to the station with cross promotional fanfare and branded giveaways. One year later, Rick was on the air in his new job as V.J., but the kicker was that even after he became a big star, he kept the moniker Rick the Temp. There was Rick on TV, interviewing the Backstreet Boys, and although he was always paid for his work, for would-be interns, his success served a daily advertisement for the glory and glamour that awaits if you donate your labor as a gift to a major media company.

Temps: The Rented Worker Rick the Temp isn't just the Great White Hope for unpaid interns. He also represents the pinnacle of another subcategory of New Age workers: the temps. And temps, it must be said, need all the hope they can get. The use of temp labor in the U.S. has increased by 400 percent since 1982 and that growth has been steady.29 Annual industry revenue among American temp firms has increased by about 20 percent every year since 1992, with the firms pulling in revenues of $58.7 billion in 1998. Annual industry revenue among American temp firms has increased by about 20 percent every year since 1992, with the firms pulling in revenues of $58.7 billion in 1998.30 The mammoth international temp agency Manpower Temporary Services rivals Wal-Mart as the largest private employer in the U.S. The mammoth international temp agency Manpower Temporary Services rivals Wal-Mart as the largest private employer in the U.S.31 According to a 1997 study, 83 percent of the fastest-growing American companies are now outsourcing jobs they once hired people to perform-compared with 64 percent just three years before. According to a 1997 study, 83 percent of the fastest-growing American companies are now outsourcing jobs they once hired people to perform-compared with 64 percent just three years before.32 In Canada, the Association of Canadian Search, Employment & Staffing Services estimates that more than 75 percent of businesses use the services of the $2 billion Canadian temp industry. In Canada, the Association of Canadian Search, Employment & Staffing Services estimates that more than 75 percent of businesses use the services of the $2 billion Canadian temp industry.

The most dramatic growth, however, is taking place not in North America but in Western Europe, where temp agencies are among Europe's fastest-growing companies.33 In France, Spain, the Netherlands and Germany, hiring workers on long-term temporary contracts has become a well-trampled back entranceway to the labor market, allowing employers to sidestep tough laws that provide generous employee benefits and make firing without just cause far more difficult than in the United States. France, for instance, has become the second-largest temp-services market after the U.S., making up 30 percent of worldwide temp revenue. And though temping accounts for only 2 percent of all the country's jobs, according to France's labor minister, Martine Aubry, "86 percent of new hires are on short-term contracts." In France, Spain, the Netherlands and Germany, hiring workers on long-term temporary contracts has become a well-trampled back entranceway to the labor market, allowing employers to sidestep tough laws that provide generous employee benefits and make firing without just cause far more difficult than in the United States. France, for instance, has become the second-largest temp-services market after the U.S., making up 30 percent of worldwide temp revenue. And though temping accounts for only 2 percent of all the country's jobs, according to France's labor minister, Martine Aubry, "86 percent of new hires are on short-term contracts."34 Manpower Europe, an outpost of the U.S.-based temp firm, saw its revenue in Spain jump a staggering 719 percent in just one year, from $6.1 million in 1996 to $50 million in 1997. Italy didn't legalize temp agencies until 1997, but when it did, Manpower Europe rushed in to open thirty-five offices in 1998. Manpower Europe, an outpost of the U.S.-based temp firm, saw its revenue in Spain jump a staggering 719 percent in just one year, from $6.1 million in 1996 to $50 million in 1997. Italy didn't legalize temp agencies until 1997, but when it did, Manpower Europe rushed in to open thirty-five offices in 1998.35 These companies all have the formula. They don't take you on full time. They don't pay benefits. Then their profits go through the roof.-Laura Pisciotti, UPS worker, on strike, August 1997 Every day, 4.5 million workers are assigned to jobs through temp agencies in Europe and the U.S., but since only 12.5 percent of temps are placed on any given day, the real number of total temporary employees in Europe and the U.S. is closer to 36 million people.36 More significant than soaring numbers, however, is a major shift under way in the nature of the temporary work industry. Temp agencies are no longer strictly in the business of farming out rent-a-receptionists when the secretary calls in sick. For starters, temps are no longer all that temporary: in the U.S., 29 percent stay at the same posting for a year or more. More significant than soaring numbers, however, is a major shift under way in the nature of the temporary work industry. Temp agencies are no longer strictly in the business of farming out rent-a-receptionists when the secretary calls in sick. For starters, temps are no longer all that temporary: in the U.S., 29 percent stay at the same posting for a year or more.37 Their agencies, meanwhile, have become full-service human resource departments for all your no-commitment staffing needs, including accounting, filing, manufacturing and computer services. And according to Bruce Steinberg, director of research at the U.S.-based National Association of Temporary and Staffing Services, "a quiet evolution is taking place throughout the staffing services industry"-rather than renting out workers, the agencies are "providing a complete service solution." Their agencies, meanwhile, have become full-service human resource departments for all your no-commitment staffing needs, including accounting, filing, manufacturing and computer services. And according to Bruce Steinberg, director of research at the U.S.-based National Association of Temporary and Staffing Services, "a quiet evolution is taking place throughout the staffing services industry"-rather than renting out workers, the agencies are "providing a complete service solution."38 What that means is that more companies are contracting out entire functions and divisions-work previously performed in-house-to outside agencies charged not only with staffing but, like the contract factories in the export processing zones, administration and maintenance of the task as well. For instance, in 1993 American Airlines outsourced the ticket counters at twenty-eight U.S. airports to outside agencies. Around 550 ticketing-agent jobs went temp and, in some cases, workers who had earned $40,000 were offered their same jobs back for $16,000. What that means is that more companies are contracting out entire functions and divisions-work previously performed in-house-to outside agencies charged not only with staffing but, like the contract factories in the export processing zones, administration and maintenance of the task as well. For instance, in 1993 American Airlines outsourced the ticket counters at twenty-eight U.S. airports to outside agencies. Around 550 ticketing-agent jobs went temp and, in some cases, workers who had earned $40,000 were offered their same jobs back for $16,000.39 A similar reshuffling took place when UPS decided to turn over its customer-service centers to outside contractors-5,000 employees earning $10 to $12 an hour were replaced with temps earning between $6.50 and $8. A similar reshuffling took place when UPS decided to turn over its customer-service centers to outside contractors-5,000 employees earning $10 to $12 an hour were replaced with temps earning between $6.50 and $8.40 As Tom Peters says, "You're a damn fool if you own it!"41 Bruce Steinberg concurs: by amputating whole divisions and sloughing them off on "managed services arrangements, the business can concentrate its time, energy and resources on core business while staffing service practices its core competency of managing workers." Bruce Steinberg concurs: by amputating whole divisions and sloughing them off on "managed services arrangements, the business can concentrate its time, energy and resources on core business while staffing service practices its core competency of managing workers."42 Hiring and managing workers, in other words, is not the base of a healthy company but a specialized task-somebody else's "core competency" that is better left to the experts, while the real business is tended to by an ever-shrinking number of workers, as the next chapter will show. Hiring and managing workers, in other words, is not the base of a healthy company but a specialized task-somebody else's "core competency" that is better left to the experts, while the real business is tended to by an ever-shrinking number of workers, as the next chapter will show.

Yes, but...Won't Bill Gates Save Us?

Any discussion of the plight of corporate temps, UPS couriers, outsourced GM workers, Gap greeters, MTV interns and Starbucks "baristas" leads inevitably to the same place: Yes, but...what about all the great new jobs in the growing high-tech world? For my generation of workers, the legendary riches awaiting technology workers in Seattle and Silicon Valley are the "yes, but" answer to any and all grievances about employment exclusions. Standing in contrast to all the downer stories about layoffs and McJobs is this shimmering digital mecca where fifteen-year-olds design video games for Sega, where AT&T hires hackers just to keep an eye on them and where scores of young workers become millionaires from their lavish stock options. Yes, but...Bill Gates will make it all okay, won't he?

It was Microsoft, with its famous employee stock-option plan, that developed and fostered the mythology of Silicon Gold, but it is also Microsoft that has done the most to dismantle it. The golden era of the geeks has come and gone, and today's high-tech jobs are as unstable as any other. Part-timers, temps and contractors are rampant in Silicon Valley-a recent labor study of the region estimates that between 27 and 40 percent of the Valley's employees are "contingency workers," and the use of temps there is increasing at twice the rate of the rest of the country. The percentage of Silicon Valley workers employed by temp agencies is nearly three times the national average.43 And Microsoft, the largest of the software firms, didn't just lead the way to this part-time promised land, it wrote the operating manual. For more than a decade, the company has been busily closing ranks around the programmers who got there first, and banishing as many other employees as it can from that sacred inner circle. Through extensive use of independent contractors, temps and "full-service employment solutions" Microsoft is well on its way to engineering the perfect employee-less corporation, a jigsaw puzzle of outsourced divisions, contract factories and freelance employees. Gates has already converted one-third of his general workforce into temps, and in the Interactive Media Division, where CD-ROMs and Internet products are developed, about half the workers are officially employed by outside "payroll agencies," who deliver tax-free workers like printer cartridges.44 Microsoft's two-tier workforce is a microcosm of the job market's New Age new deal. At the center is the high-tech dream: permanent, full-time employees, with benefits and generous stock options, working and playing on the youthful corporate "campus." These Microserfs are cultishly loyal to their corporation, its soaring stock price and its staggering 51 percent operating profit margin ("Show me the money!" they roared at the annual staff meeting in Seattle's Kingdome Stadium in fall 1997).45 And why shouldn't they be loyal? They earn an average of $220,000 a year, and that's not even factoring in the top five superrich executives. And why shouldn't they be loyal? They earn an average of $220,000 a year, and that's not even factoring in the top five superrich executives.

Orbiting around this starry-eyed core are between 4,000 and 5,750 temporary workers.46 The temps work side by side with members of the core group-as technicians, designers and programmers-and perform many of the same jobs. About 1,500 have been with the company for so long they have taken to calling themselves "permatemps." The only way to tell the temps from the "real" Microserfs is by the color of their badges: blue for perms, orange for permatemps. The temps work side by side with members of the core group-as technicians, designers and programmers-and perform many of the same jobs. About 1,500 have been with the company for so long they have taken to calling themselves "permatemps." The only way to tell the temps from the "real" Microserfs is by the color of their badges: blue for perms, orange for permatemps.

Like the fleet of part-timers who give UPS the "flexibility" to employ workers only during peak hours, and the contract workers in Cavite who provide their factory owners with the "flexibility" to send them home during dry spells, what thousands of temps means for Microsoft is the freedom to expand and contract its workforce at will. "We use them," says Microsoft personnel officer Doug McKenna, "to provide us with flexibility and to deal with uncertainty."47 Trouble began in 1990 when the Internal Revenue Service challenged Microsoft's classification of orange badges as independent contractors, ruling that these people were actually employees of Microsoft and the company should be paying their payroll tax. Based in part on this finding, in 1993 a group of employees classified by Microsoft as contractors launched a lawsuit against the company, claiming they were regular workers and deserved the same benefits and stock options as their permanent colleagues. In July 1997, Microsoft lost the landmark case when an eleven-judge Court of Appeals panel ruled that the freelancers were "common law" employees and had the right to the company's benefits program, to its pension and to its stock-purchasing plan.48 Microsoft's response to this setback, however, has not been to add freelancers to its payroll but simply to work more assiduously to marginalize the temps. To this end, the company has moved away from hiring "independent contractors" directly. Instead, after employees have been scouted, interviewed and selected by Microsoft, they are instructed to register with one of five payroll agencies that have special arrangements with the company. MicroTemps are then hired through an agency that acts as the official employer: cutting paychecks, withholding income taxes and sometimes providing bare-bones benefits. Laird Post, a principal with management consultant Towers Perrin in Seattle, Washington, explains the legalities of this new arrangement. "It's hard to rationalize legally that the person is not an employee unless they are an employee of someone else"-in Microsoft's case, that someone else is the payroll agency.49 To make sure that the temps will never again be confused with actual Microsoft workers, they are barred from all extracurricular company functions, including taking part in late-night pizza meals and after-hours parties. And in June 1998 the company introduced a new policy requiring temps who have been on an assignment with the company for a year or more to take a thirty-one-day break before they can take another "temporary" post. To make sure that the temps will never again be confused with actual Microsoft workers, they are barred from all extracurricular company functions, including taking part in late-night pizza meals and after-hours parties. And in June 1998 the company introduced a new policy requiring temps who have been on an assignment with the company for a year or more to take a thirty-one-day break before they can take another "temporary" post.50 As Sharon Decker, Microsoft's director of contingency staffing, explains, "We are refocusing a lot of policies we had in place so everyone understands how a temp should be treated and what is appropriate." As Sharon Decker, Microsoft's director of contingency staffing, explains, "We are refocusing a lot of policies we had in place so everyone understands how a temp should be treated and what is appropriate."51 In addition to staffing its campus with permatemps, in 1997 Microsoft initiated a series of moves to disentangle itself from other earthly and cumbersome aspects of running a multibillion-dollar company. "Don't get caught with useless fixed assets," Bob Herbold, Microsoft's chief operating officer, says, explaining his staffing philosophy to a group of shareholders.52 According to Herbold, pretty much everything but the core functions of programming and product development fall into the "useless fixed assets" category-including the company's sixty-three receptionists, who were laid off, losing benefits and stock options, and told to reapply through the Tascor temp agency. "We were overpaying them," Herbold said. According to Herbold, pretty much everything but the core functions of programming and product development fall into the "useless fixed assets" category-including the company's sixty-three receptionists, who were laid off, losing benefits and stock options, and told to reapply through the Tascor temp agency. "We were overpaying them," Herbold said.53 In the same stroke, Microsoft sliced and diced its Redmond campus and parceled out the pieces (along with employees who wanted to hold on to their jobs) to outside "vendors": Pitney Bowes took over the mail room; the print and copy center is now operated by Xerox personnel; the CD-ROM factory was sold to KAO Information Systems; even the company store was outsourced to Benussen Deutsch & Associates. In this latest round of restructuring, 680 jobs were cut from the payroll and $500 million slashed from the operating budget.54 With all these contractors on the campus, Herbold noted, "just managing the outsourcers is quite a task"-and there was no reason for Microsoft to get saddled with that useless fixed asset. In a stroke of divestment genius, Microsoft contracted out the task of managing the contractors to Johnson Controls, which also takes care of the campus facilities. "Our revenue has gone up 91 percent and our head count has actually decreased 19 percent," Bob Herbold says proudly. And what did Microsoft do with the savings? "We're plowing them into R&D and we're plowing them into profit, obviously." With all these contractors on the campus, Herbold noted, "just managing the outsourcers is quite a task"-and there was no reason for Microsoft to get saddled with that useless fixed asset. In a stroke of divestment genius, Microsoft contracted out the task of managing the contractors to Johnson Controls, which also takes care of the campus facilities. "Our revenue has gone up 91 percent and our head count has actually decreased 19 percent," Bob Herbold says proudly. And what did Microsoft do with the savings? "We're plowing them into R&D and we're plowing them into profit, obviously."55 "Free Agent Nation"