nightmare on sesame street

National Labor Committee75 Varick Street, Suite 1500New York, NY 10013

Tel: 212-242-3002Fax: [email protected]

Research: Charles Kernaghan, Barbara Briggs, Jonathann Giammarco, James Saylor, Danielle Rosenthal

Design: Tomas Donoso

July 2008

NIGHTMARE ON SESAME STREET“ERNIE” MAdE IN CHINESE SwEATSHOp

TABLE OF CONTENTS

INTROduCTION 1

ExECuTIvE SuMMARy 3

KAI dA TOy FACTORy 5

CHINESE TOy wORKERS SpEAK OuT 7

ALL TEMpS HIREd ON SIx MONTH CONTRACTS 7

ExCESSIvE HOuRS 9

“ERNIE” SESAME STREET TOy TO BE RELEASEd ON JuLy 15, 2008

MAdE By K’NEx IN A SwEATSHOp IN CHINA13

wAGES: wORKERS SySTEMATICALLy CHEATEd OF

HALF THE wAGES LEGALLy duE TO THEM14

“ERNIE” ON THE ASSEMBLy LINE—SwEATING FOR pENNIES 23

wORKERS HOuSEd IN pRIMITIvE dORMS 27

wORKERS IN CHINA HAvE COME TO dISLIKE ERNIE 31

wILL SESAME STREET, K’NEx ANd HASBRO dO THE RIGHT THING? 32

CHINA SuBSIdISES TOy ExpORTS 33

COMpANy INFORMATION 34

Onetoyworkeraskedparentswhopur-

chasetheErnietoyto—“think of how

much sweat and tears we paid in

order to make these toys.”

PhotographssmuggledoutofKaDaifactory.

1

IntroductionByCharlesKernaghan

Why is it we never have the chance to meet the Chinese workers?

InChina,thebusytoyseasonisalready in fullswingasthousandsof factories

work around the clock churningoutmillionsof holiday toys,whichwill start

arrivingintheUnitedStatesandEuropebySeptember.Likelastyearandthe

yearsbefore,theAmericanpeoplewillspendover$21billionon3.6billiontoys

thisholidayseason.Atleast85percentofthesetoysaremadeinChinabythree

millionmostlyyoungwomenworkerstoilinglonghoursin8,000factories.And

theseareonlythefactoriesthathaveexport licensees, leavingasidethemany

smallersubcontracttoyplants.

Juststoptothinkofitforasecond.Year after year we purchase tens of

billions of dollars of toys and sporting goods made in China by more

than three million mostly young women, yet we have not had the

chance to meet or hear from any of these workers—not a single one,

not even once.Thereis,ofcourse,areasonforthis.Thecorporationsdonot

wantustoknowtheconditionsunderwhichtheirtoysaremade.Corporations

likeSesameStreet,K’NEX,Hasbroandotherswanttomovetheharshfactory

conditionsandlowwagesfacedbytheyoungtoyworkersasfarawayaspossible

fromthecleverandsweetimagestheyusetoadvertisetheirtoys.

ThisreportontheabusivesweatshopconditionsunderwhichSesameStreet’s

‘Ernie’ is made by K’NEX at the Kai Da factory is a modest first step to allow the

parentsandchildrenwhopurchasethesetoystoheardirectlyfromtheyoung

workersinChinawhomakethem.

Eight workers share each

dorm room, sleeping in nar-

row, double-level metal bunk

beds.Theworkersdrapeold

sheets or pieces of plastic

over their cubicle openings

forprivacy.Thedormrooms

lackwateroratoilet.

PhotographssmuggledoutofKaDaifactorydorm.

3

• Sesame Street's Kid K’NEX“Ernie”

construction toys are made at the Kai

Da factory in ShenzhenCity,China,by

600 mostly young workers, including a

hundred 16 year old high school

students, and even several children.

The child workers were seen in the

factoryinApril,whichisexactlythetime

a localnewspaper inChinaexposedthat

hundreds, if not thousands of children

were trafficked from Sichuan Province to

the south of China, where they worked

under slave labor conditions in toy and

otherassemblyplants.

• Every single labor law in China is

systematically and grossly violated at the

KaiDaToyfactory.

• Illegally, all workers are hired as temps

with contracts lasting just three to six

months.Onceinsidethefactory,workers

cannot leave until their contracts expire.

If anyone does quit, they will be

docked one-month’s wages.

• Routine 13-14-15 hour shifts, from 8:00

a.m. to 9:00, 10:00 or 11:00 p.m., seven

daysaweek,withtheworkerstoilingfor

monthswithoutasingledayoff.Thereare

also mandatory 19 and 23 ½ hour

all-night shiftsbeforethetoyshipments

mustleavefortheU.S.orEurope.Workers

aretypicallyat the factory 103 hours

a week.All overtime is mandatory, and

the 49 hours of overtime worked each

weekexceeds China’s legal limit by

489 percent!

• Workers are systematically cheated

of half the wage legally due them.

Many workers earn just 43 cents an

hourwhichis31percentbelowShenzhen

City’sminimumwageof62cents,whichis

itselfnotasubsistencelevelwage.Workers

are paid just $36.55 for working an

89-hour week, including 49 hours

of overtime.Theyshouldhaveearnedat

least$77.84. Management routinely

cheats the poor workers of over

$100,000 a month in wages due

them. After deductions for primitive

room and board, take home wages can

droptojust28centsanhour.

NIGHTMARE ON SESAME STREET“ERNIE” MAdE IN CHINESE SwEATSHOp

4

NIGHTMARE ON SESAME STREET

• Workerssweatastheyracetoassemble

50 Ernie toys per hour, and up to

650 in a 13-hour shift. The workers

are paid less than a penny for each

toy they assemble. Workers must

complete one operation every four

seconds,950perhour,and12,350options

inthe13hourshift.

• Workers handle potentially toxic oil

spray paints and solvents without

being provided even the most

rudimentary protective gear.

• Workersaredeniedbasicworkinjuryand

healthinsurance,despitethefactthatthis

ismandatoryunderChina’slaws.

• Eight workers share each dorm room,

sleepinginnarrow,double-levelmetalbunk

beds. The workers drape old sheets or

piecesofplasticovertheircubicleopening

forprivacy. Thedormrooms lackwater

oratoilet.

• The workers’ cafeteria is filthy, with grease

on the floor and infested with mice. For

breakfasttheworkersarefedaricegru-

el.Theeggsoup,whichisinadirtyvat,is

madewithjust34eggstoserve600work-

ers.Theso-calledmeatdisheshavelittle

ornomeat.

• Onetoyworkeraskedparentswhopur-

chasetheErnietoyto—“think of how

much sweat and tears we paid in

order to make these toys.”

• K’NEXisanofficial licensee of Ses-

ame Street Toys. Hasbro owns 4.5

percent of K’NEX’s international opera-

tion.

• Parentsandchildrenshoulddemandthat

SesameStreet,HasbroandK’NEXimme-

diatelycleanuptheKaiDaToyfactoryand

takeconcretestepstoguaranteethatthe

legal rights of the workers will finally be

respected.Thereisabsolutelynoreason

whythesepowerfultoycompaniescould

notpayfairwagesandtreattheworkers

ashumanbeings.

• TheAmerican people purchase $21 bil-

lion-worthoftoyseachyear—morethan

85percentofwhicharemadeinChina.

5

Kai da Toy Factory

XixiangTown,Bao’AnDistrictShenzhen,GuangdongProvinceChina

Phone: (86)(755)27483255

• TheKaiDaToyfactoryisownedbyHongKonginvestorswhoestablishedthecompany22yearsagoin

1986.AnewKaiDafactorybuildingwascompletedattheendof2003.

• Approximately600workers.

• Production:Mostlyplastictoyssuchas‘Ernie’andotherSesameStreetconstructionkits;cars;helicopters;

train and village sets, for export to theU.S. andEurope.According toworker estimates, production

for K’NEX makes up about 80 percent of total factory output. Workers in the molding

departmentsaytheyalsoproducefor Hasbro.

K’NEX is an official licensee of Sesame Streettoys.

Thereappearstobesomeconfusion.K’NEXclaimsitmanufactures95percentofitstoysintheU.S.andonly

shipsthepiecestoChinaforassembly.However,workersattheKaiDaToyfactorybelievetheyareproducing

entireK’NEXtoysandnotmerelyassemblingthem.Infact,theSesameStreetKidK’NEXConstructiontoykits

statethatthestandardpartsaremadeintheU.S.A.,whilethespecialcomponentsaremadeinChinaandthat

SesameStreet’sErnieisassembledinChina.K’NEXshouldclarifyexactlywhatthe“specialcomponents”are.

ThereisaverycloserelationshipbetweenK’NEXandHasbro.Hasbroowns4.5percentofK’NEX’sinternational

operationand10percentofitsdomesticoperation.

Product photographsmuggled out of KaiDafactory.

7

ALL TEMpS HIREd ON THREE TO SIx MONTH CONTRACTS:

WorkersdescribemanagementattheKaiDaplantaschaotic,withahighturnoverrateasnewworkersarealwaysenteringasothersarequitting.Oneworkerdescribedthesituationlikethis:“Every day there are workers coming in and out. New workers can just notify management and start working. Anyone can go in and out there.”

Sixtytoseventypercentoftheworkerscometothefactorythroughnumerousrecruitingagencies,whichsigncontractswithfactorymanagement.Themanpoweragenciesthensigncontractswiththeworkers,generallylastingsixmonths.

The majority of workers at the Kai Da Factory come from Sichuan Province, where recruiting agencies play a majorroleintransportingyoungworkershundredsofmilessouthtoworkintoyandotherassemblyfactoriesinGuangdongProvince.

Onlyaminority,30to35percent,oftheworkersarehireddirectlybythefactory,buttheseworkersarealsoonlyhiredonatemporarybasis.Iftheworkerspassathreedayprobationperiod,theyaretypicallyhiredoncontractslastingjustthree-months.Duringthethree-dayprobationperiod,theworkersreceivefreefoodandaccommodation.(continue on top of page �)

CHINA’S TOy wORKERS SpEAK OuTSesame Street’s “Ernie” Made by K’NEx in China

Ernie Toy worker #1:Young workers forced to toil a grueling 23 ½-hour shift, from8:00a.m.to7:30a.m.thefollowingmorning…Everyone was exhausted and broken…eyesclosing…feelingdizzy…forcedtoworkfaster…needingpermission touse the toilet…andanyonewhohad toleave,evenafter22hoursofwork,wouldbedockedthewholedayandnight’swagesfordaringtoleave“early.”

(continue on bottom of page �)

8

NIGHTMARE ON SESAME STREETOncetheworkerssigntheirthreetosix-monthcontracts,noonecanleavethefactory.Quitting is prohibited.Nomatterhowseriousthereason,ifanyworkermustleavethefactory,heorshewillforfeitafullmonth’sbackwagesaspunishment.(Management—againillegally—alwayswithholdsonemonth’sbackwages.)

Illegally,workersarenotallowedtokeepacopyoftheircontract,whichisretainedbymanagement.

“I worked in the hydraulic cutting and press department. On the morning of May 31, it seemed the factory had a rush order. All the workers in my department were told to work in the assembly department at 8:00 a.m. None of us had worked in the assembly department before, but management didn’t care. We worked until 12:00 p.m. to have lunch. At 1:00 p.m. we resumed working. We were working nonstop, but the supervisor still kept telling us to work faster. We took a break at 5:00 p.m., but we had to work again from 6:00 p.m. After a while the manager told us that we had to work overnight until 7:00 a.m. tomorrow morning. So we continued working. At around 3:00 a.m., I wanted to go to the bathroom. I asked the group leader to take my shift for a moment. But he said he was too busy, although he was only hanging out over there. I said I hadn’t gone to the restroom the whole day. He said, hold it. I didn’t care anymore. So I went to the toilet. Working overnight was really exhausting. I was hardly awake while working. I don’t know if the products I made had any problems. Everyone else was the same. All looked beaten. As long as there was a free moment, I would close my eyes to rest, even if just for several seconds. I could hardly keep my eyes open during work and felt very sleepy. But the assembly line was always moving. If I stopped, the products would pile up. So

(continue on bottom of page 9)

9

I couldn’t stop for a second. Three o’clock, four, five, six… Time passed second after second. So slow!

At 6:00 a.m., the sky began to brighten. But we still had not finished our quota. Some other assembly lines finished, and they went to rest. By 6:30 a.m. we still had over 900 pieces unfinished. By our speed, we would have to work until 9:00 a.m. to complete it. The supervisor said that we could get off once we finished. But we couldn’t take the fatigue anymore. The group leader still told us to work faster. One girl said, ‘I’m about to pass out.’ A girl from the next assembly line couldn’t stand it and walked away. The group leader threatened her, ‘If you leave now, I’ll count it as an absence without leave and you won’t get paid!’ Under such pressure, the girl went to the restroom and came back to work. By 7:00 a.m., we still hadn’t gotten

ExCESSIvE HOuRS• Workers at the factory 103 hours a week.• Routine 13-14-15-hour shifts, from 8:00 a.m. to 9:00, 10:00 or 11:00 p.m.• Seven-day workweeks—going for months without a single day off.• Some all-night 23 ½ hour shifts.• Mandatory overtime exceeds China’s limit by 489 percent!

Typically,KaiDatoyworkersarerequiredtotoilthreeorfourhoursofovertimeanightfrom8:00a.m.to9:00

p.m.or10:00p.m.Theassemblyandspraypaintdepartmentsroutinelyworka14-hourshift,whilesomeother

departmentsmaybeallowedout“early”at9:00p.m.

Therearenoscheduledweeklydaysoff.Ifaworkerislucky,heorshewillreceiveonedayoffamonth,usually

payday.Otherwise,workerscangoformonthsatatimewithoutasingledayoff.


(continue on top of page 10)

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off work. Everyone was listless. I almost broke down. By 7:28 a.m., when we didn’t have any energy, the supervisor let us leave the workshop.

Afterward, I walked to the dorm. On the way, I felt my body was very light and I couldn’t walk steady. Never did I want to sleep so eagerly. When I got to the dorm, I fell into bed to sleep.”

Ifworkersareforcedtotoilanall-nightshift,theywillbeallowedthefollowingdayoff.Someall-nightshifts

stretchfrom8:00a.m.to7:30a.m.thefollowingmorning,or23½hoursstraight.

Duringthebusiestperiods—whichiscurrentlythecasethisMayandJune—workersareroutinelytoilingfrom

8:00 a.m. to 11:00 p.m., a 15-hour shift, including five hours of overtime a night. In May, workers also reported

beingkeptfor18to19-hourshiftsstretchingfrom8:00a.m.to2:00or3:00a.m.thefollowingmorning.Evenon

weekends,whicharesupposedtobetheworkers’daysoff,theyareregularlykepttoilinguntil10:00p.m.andnot

allowedout“early”at5:00p.m.,asisthepracticeatsomeotherfactories.

Rightnowthefactoryissobusythatthecafeteriastaffisdeliveringfoodtothefactory,especiallytotheinjection

moldingdepartment,sotheworkerscansavetimebyeatingattheirworkstationswithouthavingtowalkback

andforthtothecafeteria.Inthiscase,ratherthanreceivinganhourbreakforlunchandsupper,thebreakiscut

backtoaround30minutes.

During such busy periods, the workers are at the factory 103 hours a week, while actually toiling

89 hours, including 49 hours of overtime, which exceeds China’s legal limit on permissible


11

Ernie Toy worker #2 fromGuanxiProvince:

Sixteen-year-olds work 13 to 14 hours a day, seven days a week for wages of just 43 cents an hour, [31percentbelowthelegalminimumwageof62cents]…Someall-night19-hourshiftsfrom8:00a.m.to5:00a.m.thefollowingmorning…tiredandbored…housed incrowdeddormandfedricegruelforbreakfast.

“My teacher organized us to work here. We are over 100 people in total… Those who came are registered to study in a specialized [technical training] high school. We are all 16 or older.

“We are paid 3 RMB per hour [43 cents U.S.]. Each month the teachers only give us 100 to 200 RMB [$14.40-$28.80) to spend. The teachers keep the remaining money. They say it will go

overtime by 489 percent. Monday through Friday, the workers are at the factory 15 hours a day while toiling

13hours.OnSaturdayandSunday,theshiftis14hoursaday,from8:00a.m.to10:00p.m.,withtwohoursoff

forlunchandsupper.

Allovertimeworkisstrictlymandatory.

Evenwhenthefactoryenters“slow”periods,theworkersstilltoileighthoursaday,sevendaysaweekforatotal

of56hours,including16hoursofovertime,whichexceedsChina’slegallimitonovertimeby93percent.

The regular legal workweek in China is eight hours a day, five days a week, for a total of 40 hours. By law,

overtimecannotexceed36hoursamonth.

Routine 14 to15-Hour Shift

• 8:00a.m.to12:00noon(work/4hours)• 12:00noonto1:00p.m.(lunch/1hour)• 1:00p.m.to5:00p.m.(work/4hours)• 5:00p.m.to6:00p.m.(supper/1hour)• 6:00p.m.to10:00or11:00p.m.(overtime/4to5hours)



12


into our tuition fund. [Tuition fees are 1,100 to 1,500 RMB per semester, $158.40 to $216.] They also deduct 50 RMB each month [$7.20] from our salary for ‘management fees.’

“I feel bored working here. Work hours are long, 13-14 hours every day. The supervisors say that the orders are urgent these days. So [we have to work] overtime. Last night we worked until 5:00 a.m. [a 19-hour shift]. After working in the workshop for a long time, I feel very tired.

“The food is not good. There is no oil in the dishes. Breakfast is only congee [rice gruel] and a steamed bun. None of them is tasty. Meat dishes rarely have meat.

“The conditions in the dorm are rather bad. Now there are six people in the room. We have to shower in the restroom.”

Workersarerequiredbothtoswipetheircardswhentheyenterthefactoryandtosignupwiththeirgroup

leader.IfrepresentativesfromSesameStreet,K’NEXorHasbropaidasurprisevisittotheKaiDaToyfactory,

theymightbeabletoobtaintheserealtimerecords.(Whencorporateauditsareannouncedinadvanceitisvery

commonforfactorymanagementtopreparedoctoredemployeewageandhourrecords.)

34 MiLLioN ToYS aND oTHER PRoDuCTS

RECaLLED FRoM CHiNa

In the seven months between June and mid-December

2007,more than 34 million toys and other products

made in China were recalled by U.S. companies.

InternationalHeraldTribune,

BloombergNews,December21,2007.

13

“Ernie” Sesame Street Toy to be Released on July 15, 2008

—Made by K’NEx in a Sweatshop in China—“Ernie’s”SesameStreetLidKidsCanister,made/assembledbyK’NEXinChina,isbeingreleasedonJuly15,2008andwillretailfor$10.99.

“Each Lid Kids Canister features the colorful, oversized, easy-snap KID K’NEX pieces in a fun-faced container. Their uniquely packed sets also include fun stickers and an educational activity sheet along with all the necessary character building pieces.

“The first wave of “Sesame Street” KID K’NEX building sets will be available in July 2008 at retail stores nationwide.”

14


Ernie worker #3 fromShaanxiProvince:

Forced overtime, seven days a week… feelingverytired… wanted to quit but was not allowed…littlesavings.

“I work in the assembly department. The hours are long. Every day I have to work 11 or 12 hours. Now the factory is rushing production orders, so overtime is especially long. I cannot rest well. So [I feel] very tired. I earn about 900 to 1,100 RMB a month [$129 - $144].

[Note:thisworkerwasrequiredtowork77.6hoursaweek, including37.6hoursofmandatoryovertime,andshouldhaveearnedatleast$66.07fortheweekand$286.30forthemonth.Insteadshewaspaidjustanaverageof$136.80permonth,whichisalittlelessthanhalfofwhatshewaslegallyowed].

wages: workers Systematically Cheated of Half the wages Legally due to Them

• Temporaryworkers—makingup60to70percentoftheworkforce—are paid just 43 to 50 cents an

hour,19to31percentbelowthelegalminimumwageof62centsanhour—whichisinitselfnowhere

nearasubsistencelevelwage.Afterdeductionsforprimitiveroomandboardconditions,the temps’

take home wage amounts to just 28 to 35 cents an hour.

• Includingmandatoryovertime,tempsareroutinelycheated of 53 percent of the wages legally

due them, earning just $36.55 for working a grueling 89 hour week,insteadofthe$77.84

theyarelegallyowed.Evenworkersdirectlyhiredbythefactoryarestillcheatedof49percentofthe

wagesduetothem,earningjust$39.88aweek,insteadofthe$77.84alsoowedthem.

• Factory management cheats these poor workers of over $104,000 a month in wages

legally due to them.



15

“It’s true that overtime is long right now. It’s just I feel tired. I’ve written a resignation application twice, and both were rejected. [Note: Ifshe leftwithoutpermission, as punishment, management would confiscate onemonth’sbackwages.]

“I don’t know about the labor law. I signed a contract when I came. But there was only one copy of the contract and the factory took it.

“Living expenses are very high in Shenzhen. I don’t have much money up to now.”

• Despiteenduringgrueling13-to-15-hourshifts,sevendaysaweek,while livinginprimitivedorms,the

workersreporttheyareabletosavejust $10.00 to $13.29 a week.

• Illegally,factorymanagementwithholdsonemonth’swagesfromtheworkers.

Every worker is cheated:

ThelegalminimumwageintheBao’anDistrictofShenzhenCitywheretheKaiDaToyfactoryislocatedis750

RMBamonth,or$108,basedontheregular40hourworkweek.

Legal Minimum Wage

(750RMBamonth)

• 62centsanhour

• $4.97aday(8hours)

• $24.83aweek(40hours)

• $108.80amonth

• $1,296.00ayear (continue on top of page 16)(Exchangerateof6.9444RMB=$1.00

U.S./Wall Street Journal,May29,2008)

16


Ernie Toy worker #4 fromLiangshan,Sichuan:

Recruiters traffic young people from Sichuan Province—including teenagers and even several children—to work at the Kai Da Toy factory in the South of China… Paid just 46 cents an hour.

“There were seven of us when we came. It was our head [labor contractor/recruiter] who brought us here from our hometown. We listen to him in everything.

“I was in the second year of high school before I came.

“Our hometown is very poor. Many workers were brought out by others [recruiters]. This factory has many people from our region. They were brought by different heads [labor contractors].

“The hourly rate is 3.2 RMB per hour [46 cents]. [Note:Thelegalminimumwageis62

Allovertimework—whichmustbevoluntary—islimitedtonomorethan36hourspermonthandmustbepaid

atapremium.Weekdayovertimeshouldbepaidata150percentpremium,or93centsanhour,whileworkon

weekendsmustbecompensatedata200percentpremium,or$1.24perhour.

At the Kai da Toy factory every wage law is systematically violated.

Asalreadymentioned,60to70percentofthetoyworkersatthefactoryarehiredastempsbyvariousrecruiting

agencieswhoplacethemattheKaiDafactory.Thevariousrecruitingagenciespaydifferentwages,rangingfrom

three,to3.2to3.5RMB,or$.43,$.46,to50centsperhour,allofwhicharewellbelowthelegalminimumof

62cents.Thetemporaryworkersaresystematicallycheatedof12to19centsperhour,or19to31percentof

thewageslegallyduetothem.Itgetsevenworse,asthetemporaryworkersareroutinelyrobbedofthelegal

overtimepremiumstheyareowed.

Formal workers, who are directly hired by the factory, are also cheated. Formal workers earn close to the legal

minimum wage, but are grossly underpaid for overtime. Factory management pays a standard overtime rate of



17

centsanhour,meaningthisyoungworkerischeatedof26percentofherregularwages.]

“There used to be a few children working here. Some days ago [in late April 2008], their group left.

“Working outside is not as good as staying at home. But I have no alternative. My family is poor. When I work outside, I can still send some money home.”

Another worker (#5) described one of the childworkers:

“He was about 5-foot 3 inches and weighed about 95 pounds. He looked haggard.”

nomorethan5RMBperhour,or72cents,whichiswellbelowthelegal93-centrateforweekdaysand$1.24

rateforweekendovertime.

For working an 89-hourweek,whichwasroutine inMayand June, theworkers—both formaldirecthires

andtemps—shouldhaveearnedatleast$77.84.Thelegalminimumwagefortheregular40hoursofwork

is$24.83while the25hoursofweekdayovertimeshouldhavebeenpaidat$23.25, and the24hoursof

mandatoryweekendovertimeat$29.76;foratotalof$77.84aweekand$337.31amonth.Thisiscertainly

notahugeamountofmoney,astheworkerswouldbeearninganaverageofjust87centsanhour,includingthe

49hoursofrequiredovertimeeachweek.

[Note: It was exactly at this time, in

April 2008, that a local newspaper in

GuangzhouCityrevealedthathundreds,

if not thousands, of children

were trafficked from Sichuan

Province to the South of China

where they worked under slave

labor conditions in toy and other

assembly plants.]


18


Hundreds—if not thousands—of Children Sold as Slaves To work in

China’s Toy and Garment Factories

InApril 2008, the Southern Metropolis newspaper in Guangzhou City broke the story

thathundreds,ifnotthousands,ofchildrenfromimpoverishedareasinLiangshanPrefecture

inSichuanProvincewerebeingsoldtoworkasslave laborers inboomingtoyandgarment

factoriesinthesouthofChina.AsoflateApril,governmentauthoritiessaidtheyrecovered

over100childrenjustinfactoriesinDongguanCity.Thechildren—13to15yearsold—were

forcedtowork70hoursaweekforwagesaveraging43centsanhour,whichiswellbelow

China’slegalminimumwageof62centsanhour—whichitselfisnotasubsistencelevelwage.

LaborrecruitersworkinginLiangshanwouldtransportthechildrenmorethan600milessouth,

wheretheyweresoldtofactories.

According to The New York Times, (NYT, May 1, 2008, “Child Labor Cases Uncovered in China” by

David Barboza), “The newspaper [Southern Metropolis] said recruiters and labor agencies working in

Liangshan often transported the children south and then ‘sold’ them to factories at virtual auctions in

Guangdong Province, one of China’s biggest manufacturing centers and home to a huge population of

migrant workers.

“At some coastal factories, children were even lined up and selected based on their body type, the

journalists wrote.

“In its report, Southern Metropolis said some children were threatened with death if they tried to

escape from labor recruiters.”

Atypicalcontractbetweenalaborrecruiterandfactorymanagementwasasfollows:

“Party A [the factory] guarantees Party B [the recruiter] that the workers clock a total of 300 hours per

month. If Party A cannot fulfill the stipulated number of hours for any reason, then Party A will provide

monetary compensation for the shortfall of hours worked to Party B. Party A must not pay the salaries

or any other fees directly to any of the workers of Party B; both parties must keep this arrangement

secret, so as to avoid unnecessary trouble.” (China Labor Bulletin, May21,2008)

[Note:Thiscontractwouldrequireaminimum70-hourworkweekincluding30hoursofovertimeeachweek,

whichexceedsChina’slegallimitby261percent.]

19

Mandatory 7-day, 89-hour Workweek

($77.84aweek/$337.31amonth)

•Regular40hoursofwork: $ 24.83

•Weekday overtme, five hours per day, Monday-Friday: $ 23.25

(5daysx5hours=25hours;25hrsx$0.93=$23.25)

•Weekendovertime,12hoursperday: $ 29.76

(12hoursperdayx2days=24hours;24x$1.24=$29.76)

Total: $77.84/week and $337.31/month

Despiteworkingovertimeeverysingledayofthemonth,the temporary workers still report earning just

900 to 1,100 RMB per month, or $129.60 to $158.40, which is less than half of what they are

owed.Evenifwetakethehighesttempwageof1,100RMBpermonth,thisisjust$36.55 a week, which

means—atbest—thetempsarebeingcheated$41.29eachweek,or53percentofthewageslegallyduetothem.

FiFTY-NiNE PERCENT oF u.S. ToY JoBS LoST

TheU.S.toyindustrydeclinedfromahighof42,300jobsin1993tojust17,400in2005.Inthe12-yearperiod,theU.S.lost24,900jobs,or59percentofthetotal.


20


Ernie Toy worker #6 fromSichuanProvince:

Young workers exposed to potentially toxic oil paints and chemical solvents…not provided with even the most rudimentary protective gear such as gloves or cheap disposable respiratory masks.

“I work in the oil spray painting department. I know oil paint is harmful to the human body. But the factory does not provide any protective equipment. I wanted to quit earlier, but didn’t get permission.”

Anotherworker(#7)relatedthefollowing:“One worker in my dorm is from the oil spray paint department. His hands are full of yellow oil paint. There’s also paint in his nose. It can’t be washed off. He said, ‘F*#k, what kind of garbage factory is this!” We all feel the same.”

Theyshouldhaveearnedatleast$77.84forthe89-hourworkweekandnotthe$36.55theywereinfactpaid.

Formal workers, or direct hires, fair just slightly better than temps. Formal workers report earning 1,100 to

1,200 RMB per month, or $158.40 to $172.80,despitealsobeingrequiredtoworkovertimeeverydayof

themonth.Again,ifwetakethehighestwageof$172.80amonthand$39.88aweek,thismeansthattheformal

workersarealsobeingcheatedof$37.96,or49percent,oftheirwageslegallyduetothem.Insteadofearning

the$77.84owedtothemforthe89hourworkweek,theywerepaidjust$39.88.

Robbing the young toy workers puts over $100,000 a month into the pocket of management.

CrimepaysattheKaiDaToyfactory,where390temporaryworkersarecheatedof$41.29inwageslegallyowed

tothemeachweek,whileanother210formalworkersareeachrobbedof$37.96aweekInthecourseofa

week,thetempsarecollectivelyrobbedof$16,103,whiletheformalworkersarecheatedof$7,972,foratotal

of$24,075eachweek.Management is robbing their poor toy workers of $104,324 a month.



21

[Note:Spraypaintingwithoutproperprotectivegeardoesexpose

workerstohealthhazardsfrompaintcomingintocontactwiththe

skinandinhalationofspraymaterials.Shorttermharmincludes

burnstotheskinandeyes;vomitinganddiarrhea;irritationtothe

nose,throatandlungs,dizzinessandfatigue.Longtermpotential

damagecanleadtolungcancer,kidneyandliverfailureanddamage

tothereproductivesystem.Solventssuchasbenzenecanalsobe

absorbedthroughtheskinorbybreathingitin.Shorttermeffects

canbenausea,headachesandtiredness,whileserious longterm

exposurecanresultinanemiaandleukemia.]

Factory owners in China—as elsewhere—are often not angels and if they can cheat the workers and get away

withit,theywill.Also,thelocallaborbureausinChina,forwhateverreason,areextremelylaxinattempting

toenforceChina’slaborlaws.ButanothercriticalfactorinrobbingtheworkersistheconstantdrivebyU.S.

companieslikeK’NEX,Hasbro,andSesameStreettocutthepricestheyarewillingtopaytheircontractors.

Theyarealsoresponsible.

a take-home wage of just 28 to 35 cents:

Afterfactorymanagementdeducts$36amonthforprimitiveroomandboardconditions,thetemporaryworkers’

takehomewageactuallydropstojust28to35centsanhour.

Workers report saving just $9.97 to $13.29 a week

Despite all their sacrifice, being required to work 12 to 13 hours a day, seven days a week, often going for months

withoutasingledayoff,whilebeinghousedincrowded,primitivedormsandfed,atbest,tastelessandlimited


22


Ernie worker #8:Factory cafeteria is filthy and the food terrible…600 workers share an egg soup prepared with just 34 eggs…mice scurry around the cafeteria floor.

“The food is not good.The dishes don’t have any cooking oil. There is no taste except for salt. The [cafeteria] floor is covered with water and grease. The eating utensils are dirty, dark and full of grease. The soup is in a big vat. The vat is also dirty. There’s very little egg in the soup. Altogether, maybe just 34 eggs. But there are so many workers, [approximately 600]. For the rest of us, the soup is just like water. There are mice running around the cafeteria.”

Another worker (#2) has already commented that: “The meat dishes rarely have meat.”

[Note: The factory cafeteria is located on the first floor of the workers’ dorm and can hold

food,theworkersreport being able to save just $9.97 to $13.29 each week to send home to their

families. Andremember,theyareoftentoiling89hoursaweek.

Theworkersexplainthattheirbasicexpensesaverageabout$79.20eachmonth,includingsnacks,toiletarticles,

phonecallstotheirfamilies,occasionalclothingpurchases,medicalexpenses,andsoon.Withthetoyworkers

earninganywherefrom$158.40to$172.80permonth,thismeanstheworkersareabletosavejust$9.97to

$13.29perweek,$43.20to$57.60amonth,and$518.40to$691.20ayear.

illegally, management withholds one month’s wages.

Workersarepaidtheirpreviousmonth’swagesonthe25thofthefollowingmonth,whichisillegal.China’slaw

mandates that employers pay their workers no later than the first week of the following month. Also, workers

donotreceivepaystubsoranyrecordofhowtheirwagesarecalculated.


23

500to600workersatatime.Eachmealhasthreedishes—oneso-called meat dish and two vegetable dishes. For breakfast, the workersaregivenricegruelandabun.Temporaryworkerscaneat for free, while the formal workers, or those directly hiredbythefactory,mustpay200RMB($28.80)permonthfortheirfood.]

“Ernie” on the Assembly Line— Sweating for pennies:

K’NEXclaimsthat95percentofitstoysaremadeintheU.S.ButtheworkersattheKaiDafactoryinChina

believetheyaremanufacturingcompleteK’NEXtoys,includingErnie.Theworkerssaytheprocessstartsinthe

machinecuttingdepartmentwheretheplasticcomponents—believedtobeasortofpolypropylene(PP)—are

cuttosizeandshape.Thecuttingdepartmentisverynoisyandattimesalmostunbearableifanyofthemachines

aremalfunctioning.

Thecutpiecesarethenbroughttotheassemblylines.Thereareapproximatelynineassemblylinesatthefactory

with—dependinguponthenatureoftheoperations—anywherefrom13to40workersoneachline.Onthe

‘Ernie’ K’NEXlinethereare20workers,andsometimesafewmore.

InAprilandMaytheworkersreportedthat“even now we sweat in the factory, and it will get much worse this summer.”

Thereareonlyafewwallfansandsomeofthesearebroken.


26


Ernie worker #9 From Jiangxi Province:

Illegally, toy workers at the Kai Da Factory are not provided mandatory basic healthcare.

Thisworkerhadinjuredhisfoot.

“I asked for advice from the factory clinic. They said it would cost over 300 RMB [$43.20] to cure. I don’t have the money right now. So I didn’t have it treated. I just bought some medical balm in a pharmacy. I soak the injured food in salt water.”

[Note: Every single labor law in China is violated at the Kai Da Factory where ‘Ernie’isbeingmade.Bylaw,managementmustinscribeall

workersinthestate’sSocialSecurityinsurancesystem,coveringworkinjuries,healthcare,paidmaternityleave,asmallunemployment

stipendandpension.ManagementcheatstheworkersbyrefusingtopayintotheSocialSecuritysystem,leavingtheworkerswithout

eventhemostrudimentarymedicalcare.Ontheirown—despiteworkingovertimeeverydayofthemonth—theworkersdonotearn

enoughmoneytopurchasehealthcare.]

Groupsupervisorsscoldtheyoungworkerstomovefaster.Oneworkerdescribeditlikethis:“Otherwise the

steadily moving assembly lines clog. We cannot let products pile up. So we have to work faster.”

Sometimeswhenthetoyworkersarekeptlatetheyareprovidedwithsnacks.“The snacks are very little” theysay,

“only a cup ofchrysanthemumtea and two small fist-sized buns. And the quality is very poor.”

Eachassemblylineof20orsoworkersmustcompleteamandatoryproductiongoalof800to1200Ernietoys

perhour.Theworkersarenotassembling‘Ernie’—asitisaconstructiontoytobeputtogetherbychildrenin

theUnitedStatesandEurope—butrathersortingtheproperpieces,placingtheminbags,packagingthemand

puttingthecompleted‘Ernie’ toysintoboxes.Essentially,the workers are allowed one or one-and-a-half

minutes to finish each toy. For a young temporary worker earning just 43 cents an hour, this means she

will be paid just 7/10ths of a cent to one penny for each Ernie toy she completes.

[Basedon“Elmo”BuildingSetsmadeattheKaiDafactory,theNationalLaborCommitteeestimatesthatthere

aretypically15plasticpiecesperconstructionkit,whichmustbeproperlysortedandplacedinaplasticbag,

(continue on page 27)

27

includingtwopieceswhicharewrappedintissuepaper.ThepiecesthenhavetobeplacedintheKidLidcanister

and finally put in a shipping box. Overall, the process involves 19 operations. This means that on an assembly line

with20workersassignedamandatoryproductiongoalof800to1,200Ernietoysperhour,eachworkerwould

havetocomplete,onaverage,oneoperationeveryfourseconds,950perhourand12,350operationsduringthe

typical13-hourshift.

Workers Housed in Primitive Company Dorms

The Kai Da Toy factory has one dorm building with the workers’ cafeteria taking up the first floor, male quarters

the second, third and fourth floors, and women occupying the fifth and sixth floors. Eight workers share each

room,sleepingonthindouble-levelmetalbunkbedswhich line thewalls. There isnoother furniture. The

workersdrapeoldsheetsorpiecesofplasticovertheircubicleopeningsforsomeprivacy.Thedormrooms

lack water or toilets. One hundred-plus workers share each floor. The workers report that the dorm is not

very clean. There is a public toilet/shower room on each floor with six toilets and shower stalls. The workers

complainthattheshowersandtoiletsareinthesameroomjustacrossfromeachother.Withapproximately

120 people on each floor, 20 workers must share each shower stall.

Temporaryworkersboardforfree,whiledirectfactoryhiresmustpay50RMD,or$7.20amonth,fordorm

fees.

Corporate Codes of Conduct Unknown:

The vast majority of U.S. and European toy

companies claim to have adopted voluntary

codes of conduct and private monitoring

schemestoseethatallrelevantlaborlawsare

respected at their contractors’ plants. Such

voluntary codes andmonitoring schemes are,

atbest,ofverylimitedusefulness,butattheKai

DaToyfactory,theworkershad never even

heard of any such thing as a corporate

code of conduct which is supposed to

protect their rights.

Company dormitories.

(continue on page 27)

Workerswashclothingbyhandandhangittodry.

Dormtoilet.

Dormshower.

Loadingarea.

31

young workers in China Have Come to dislike ‘Ernie’

Whenasked,oneyoungtoymakerdescribedherfeelingsregarding‘Ernie’assuch:

“Imagine if a worker has to work more than 10 hours a day facing the same toy, and day after

day, for a salary of only a few hundred RMB each month. Do you think she would be interested

in the toy?”

AskedifshewouldliketosayanythingtothepeopleintheUnitedStatesorEuropewhowillbuythe‘Ernie’toy,

shesaid:

“The product in your hand is the work product of our toiling over 10 hours, non-stop every

day. We hope when you play with these toys, you would think of how much sweat and tears we

paid in order to make these toys.”

Toldthepriceofthe‘Ernie’ toy,sheimmediatelyresponded:

“I always wanted to know the price of this toy. At most I thought 40-50 RMB [$5.76 to $7.20].

But I didn’t expect it to be so expensive [76.32 RMD or $10.99]. I can’t believe it, what we make within

seconds can be worth several days of our wages. How much profit do they want to make out

of us?”

[Infact,the$10.99retailpricefortheErnietoyistheequivalentofmore than three days’ wagesforthe

typicalworkerearningjust46½centsanhour,despitethefactthattheworkerassembles50Ernietoysanhour,

andupto650aday.The workers get paid less than a cent to make each toy.]

It is now the responsibility of Sesame Street, K’NEX and Hasbro to rescue Ernie’s workers so they are finally

treatedlikehumanbeings,withrespectanddignity.

32


will Sesame Street, K’NEx and Hasbro do the Right Thing?

What must be done:

Itisnotrocketscience.SurelysuchwellknowncorporationswiththesizeandinternationalprestigeofSesame

Street,HasbroandK’NEXhavethepowertoimmediatelytransformtheKaiDafactory,fromonewhereyoung

workersareexploitedandforcedtoworkgruelinghourswhilebeingcheatedoftheirwages,toafactorywhich

atleastadherestoChina’sminimumwage,hourandotherlaborlaws.Butitwouldcertainlypleaseparentsand

childrenacrosstheUnitedStatesandEuropewhopurchaseandplaywiththesetoys,ifthecompanieswouldgo

furthertoguaranteethattheyoungworkersaretreatedwithrespectanddignityandpaidafairwage.

Whatwouldbecompletelyunacceptable is tohaveSesameStreet,HasbroandK’NEXclaim that theyhave

already done enough, with their “strong” codes of conduct and “strict” monitoring of the Kai Da Factory over

thecourseofmanymonthsifnotyears.But,alas,itisnowclearthatthefactoryisnotcooperatingproperly,

leavingthemultinationalsnochoicebuttopulltheirwork,asKaiDamustjustbeoneofthe“rottenapples.”We

haveheardthislinemanytimesbeforefromcorporations.Itleavesthecompaniesinawin-winsituation.They

canthumptheirchestsself-righteously,thatdespitealltheirgoodfaithefforts,thefactoryfailedthem.Ofcourse,

whenthemultinationalspulloutofKaiDaoranyotherfactory,theyonlyfurtherpunishtheworkers—who

will be fired and thrown out in the street—and they have already suffered enough. Sesame Street, Hasbro and

K’NEX must work with their contractors to finally bring the Kai Da plant into full compliance with China’s labor

lawsandthecoreinternationallyrecognizedworkerrightsstandards—nochildlabor;noforcedlabor;freedom

ofassociation;therighttoorganizeandbargaincollectively;anddescentworkingconditions.

33

Slave Labor—including Children—in China’s Brick Kilns

InMay2007,hundredsofworkers—includingchildrenwhohadbeen

kidnapped—were rescued frombrick kilns in the north and central

partofChina,wheretheywerebeingheldasslavelaborers.

Onesuchslavelaborerwas16-year-oldZhangZubowhowasduped

by a labor trafficker into working at a brick kiln in Shanxi Municipality

ofYongyi.Hewasforcedtowork16hoursaday,sevendaysaweek,

fornopay.Afterthreemonths,16-year-oldZhangbeggedforhiswages.

Insteadofbeingpaid,hisbossbeathimanddumpedtheteenager in

thewilderness inbelow-freezingtemperaturesandwithsnowfalling.

Beforebeingrescued,16-year-oldZhanglostbothhisfeetfromsevere

frostbite.Todatehehasnotreceivedasinglepennyofwhathewas

owedoranycompensationfromtheslavemasterorthegovernment

(China Labor Bulletin, May 21, 2008).

CHiNa SuBSiDizES ToY EXPoRTERS

ThegovernmentofChinausesavalue-addedtaxsystem,orVAT,whichisleviedontheaddedvaluethatresults from each exchange or transformation in the production process. For example, the typical value addedintoymanufacturingwouldbethemoldingandcuttingofpieces,painting,assemblyandpackaging,whichwouldordinarilybetaxedatthebasicrateof17percent.

However, to promote exports, the central government provides incentives to toy exporters by providing a large, 11 percent rebate of the value added tax.ThismeansthatifatoycompanyinChinaships$1million-worthoftoystotheU.S.,insteadofpayingthebasicVATrateof17percent,or$170,000tothegovernment,thegovernmentwouldreturnan11percentVATrebatetothefactoryworth$110,000. In theend, the toyexporter ispayinga reducedVATrateof just sixpercent,or$60,000 intaxes.

ThegovernmentofChinausestheVATrebateasanincentivetoincreaseexports.

ThesetoysmadeinChinathenentertheU.S.dutyfree.

34


Company InformationK’NEX Company Profile:

K’NEXIndustries

2990BergeyRd.

Hatfield, Pennsylvania #19440-0700

Phone:(215)997-7722

Fax: (215) 996-4222

ChairmanandCEO:Mr.JoelGlickman

K’NEX is also an official licensee for Sesame Street toys.

K’NEXtoysaresoldatmajorU.S.retailers,suchasWal-Mart,Toys ‘R’ Us,andTarget,onthecompany’s

onlinestore;andaredistributedinternationally.K’NEXisalsotheU.S.licenseeforHasbro’sLincolnLogbuilding

sets.

IntheUnitedKingdom,theEntertainer Ltd.ToystorechainisthelargestdistributorofK’NEXconstruction

toys.Asapromotionaldevice,K’NEXgaveawayconstructionpiecesinTetleyTeaboxes.K’NEXtoysaresold

in45countriesaroundtheworld.

TheK’NEXcompanysays itmanufactures95percentof itstoysattheir223,000squarefootRodonGroup

factory in Hatfield, but many of its toys are then shipped to China for assembly.

K’NEXisownedbyThe Rodon Group.

K’NEXexpressesitsbusinessphilosophyasfollows:

“We believe that the company can be financially successful while behaving in a socially and environmentally responsible

manner.”

“We believe that the company has a responsibility to provide a safe and fulfilling work

environment, and an opportunity to grow and learn.”

Clearly,K’NEXhasbadlystumbledinChina.

K’NEX, a privately-owned company founded in

1992, describes itself as the second-ranking children’s

construction toy company in the world, behind Lego.

WhileK’NEXcontrolstentotwelvepercentoftheU.S.

construction toy market, it controls 40 percent of the

British market. Hoover’s Inc. estimates K’NEX’s 2007

revenues at $70millionwith Europe accounting for 64

percentoftotalsales,andtheU.S.36percent.

35

Sesame Street Profile:Sesame Workshop

1LincolnPlaza

NewYork,NY10023

Phone:212-595-3456

Fax: 212-875-6088

President,CEOandDirector:GaryE.Knell

SesameStreet,whichwascreatedin1969,isabouttoturn38yearsold.

Today, SesameStreethasover140 contractorswhoare licensed toproduceSesameStreet toys andother

products,K’NEXbeingoneofthem.

In 2007, according to their financial report, Sesame Street made $52,349,000 on product licensing fees,

whichismorethantheymadeineitherprogramsupportordistributionfeesandroyalties.

“As a non-profit, we [Sesame Street] reinvest our revenues, from our licensing partners….so every time you buy

one of our products, you’re not only helping your child, you’re helping children around the

world to reach their highest potential.”

The young workers, including several children, who toil under abusive sweatshop conditions

producing Sesame Street Toys at the Kai Da Toy Factory in Shenzhen, China would sharply

disagree with the above statement by Sesame Street.

SesameStreetneedstodomuchmoretohold its licensedcontractorsaccountabletorespect fundamental

children’s,women’sandworkers’rights.

36


The Hasbro Company:

Hasbro, inc.

1027NewportAve.

Pawtucket,RI02862

Phone:401-431-8697

Fax: 401-431-8535

President,CEOandDirector:AlfredJ.Verrecchia

SesameStreetandK’NEXtoysmade/assembledinChina.

Young Workers in China Have Come to Dislike ‘Ernie’

When asked, one young worker described her feelings regarding ‘Ernie’ as such:

“Imagine if a worker has to work more than 10 hours a day facing the same toy, and day after day, for a salary of only a few hun-dred RMB each month. Do you think she would be interested in the toy?”

Asked if she would like to say any-thing to the people in the United States or Europe who will buy the ‘Ernie’ toy, she said:

“The product in your hand is the work product of our toiling over 10 hours non-stop everyday. We hope when you play with these toys, you would think of how much sweat and tears we paid in order to make these toys.”

Told the price of the ‘Ernie’ toy, she immediately responded:

“I always wanted to know the price of this toy. At most I thought 40-50 RMB [$5.76 to $7.20]. But I didn’t expect it to be so expensive [76.32 RMD or $10.99]. I can’t believe it, what we make within seconds can be worth several days of of our wages. How much profit do they want to make out of us?”

It is now the responsibility of Sesame Street, K’NEX and Hasbro to rescue Ernie’s workers so they are finally treated like human beings, with respect and dignity.

When asked, one young toy maker described her feelings regarding ‘Ernie’ as such:

“Imagine if a worker has to work more than 10 hours a day facing the same toy, and day after day, for a salary of only a few hundred RMB each month. Do you think she would be interested in the toy?”

Asked if she would like to say any-thing to the people in the United States or Europe who will buy the ‘Ernie’ toy, she said:

“The product in your hand is the work product of our toiling over 10 hours non-stop everyday. We hope when you play with new toys, you would think of how much sweat and tears we paid in order to make these toys.”

Told the price of the ‘Ernie’ toy, she immediately responded:

“I always wanted to know the price of this toy. At most I thought 40-50 RMB [$5.76 to $7.20]. But I didn’t expect it to be so expensive [76.32 RMD or $10.99]. I can’t believe it, what we make within seconds can be worth several days of our worth of our wages. How much profit do they want to make out of us?”

It is now the responsibility of Sesame Street, K’NEX and Hasbro to rescue Ernie’s workers so they are finally treated like human beings, with respect and dignity.

nightmare on sesame street

Documents

chinese workers

chinese toy workers

young workers

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ernie sesame street

toy exports

toy andotherassemblyplants