Did Broken Immigration System Bring Down American Apparel?

SweatshopLast year, around this time, American Apparel Inc. — the largest clothing manufacturer in the United States — was informed by federal immigration agents that 1,600 of its 5,600 factory employees might be working illegally. Unable to prove otherwise, the company was forced to lay off more than a quarter of its factory work force in Los Angeles. Today, the company announced that it “expected another quarterly loss and warned that it was again close to breaching a loan covenant,” in other words, bankruptcy.

The New York Daily News reports:

The retailer is in talks to obtain new financing to shore up its struggling operations, which have been hit by slackening demand for its hipster fashions, as well as an immigration crackdown last year that forced the company to dismiss 1,500 undocumented workers at its factory in Los Angeles. […]

Last year’s immigration crackdown was a startling slap in the face for American Apparel, which for years has lobbied for immigrant workers’ rights in its “Legalize L.A.” campaign. “If it weren’t for the immigration bust by the Obama administration, the company would have been OK this year,” according to a source close to American Apparel.

American Apparel has long advocated for immigration reform, “running ads, putting up billboards and selling T-shirts that read ‘Legalize L.A.: Immigration Reform Now,’ with 100 percent of its net proceeds from the shirts going to Los Angeles-based immigrant rights groups.” However, in the absence of immigration reform, there has been a shift away from workplace immigration raids and towards a crackdown on employers. The thinking is that immigration officials are targeting “unscrupulous” employers who exploit immigrant labor or who deprive hardworking Americans of jobs they want — however, that isn’t always the case.

American Apparel hasn’t been free of controversy when it comes to their human resources practices in its retail stores. However, at the company’s L.A.-based factory — where most of American Apparel’s immigrant employees work — workers are far from exploited. In fact, the company has built its “sweatshop free” brand on it. American Apparel pays its workers $10 to $12 an hour, well above minimum wage, and provides health benefits and guaranteed year-round employment. The company also claims to “offer parking, subsidized public transport, subsidized lunches, free onsite massages, a bike lending program, a program of paid days off, ESL classes and much more.”

It’s also not clear that U.S. citizen workers were lining up at American Apparel doors one they heard they were hiring. However, it is obvious that the audit devastated both the company and the workers who were let go. The company’s founder and chief executive, Dov Charney, wrote, “Because of a broken system, we were forced to let go of many factory workers — people who have been part of our family for nearly 10 years — and the country seems further from addressing this issue than ever.” The fired workers were even worse off as they struggled to make ends meet in a terrible economy.

Watch a video on the “personal and political ramifications” of American Apparel’s ICE audit.

Los Angeles Mayor Antonio Villaraigosa (D-CA) called the terminations “devastating” and his office publicly asked the federal government “to focus on employers that exploit and abuse their workers.” Ultimately, Villaraigosa hits the nail on the head. Rather than crippling one of the few clothing manufacturers left in the U.S. — one that pays its workers a decent wage and has dedicated a portion of its profits to advocating for immigration reform — perhaps the focus in the absence of major reform should be on punishing those employers who make a profit by exploiting immigrant workers via the strengthening of our nation’s labor laws.

Andrea Christina Nill

Reposted with permission from The Wonk Room.


  1. robert says

    @ s , look the reason they’re going bankrupt its because they lost there workforce , also I bet they’re more skilled than legal citizens too ,its not just a matter of “hiring legal citizens ” , American apparel had to go back on its orders creating a higher price for their items , and they could not keep up with their yearly quota , they did also hire a lot of legal citizens but they’re so young and inexperienced with sewing machines , this is an epic fail on ice’s part , because now stores will eventually close and there will be a more devastating ripple effect of loss including job loss for franchise owners. All because they lost 1600 or more of their ” illegal ” work force.

  2. S says

    How would this “break” American Apparel? Why couldn’t they just hire legal citizens for their jobs? It’s not like there’s a lack of takers in the LA area

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