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National Labor Committee75 Varick Street, Suite 1500New York, NY 10013
Tel: 212-242-3002Fax: 212-242-3821www.nlcnet.orgnlc@nlcnet.org
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.”
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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
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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.
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10
NIGHTMARE ON SESAME STREET
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
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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)
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12
NIGHTMARE ON SESAME STREET
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
NIGHTMARE ON SESAME STREET
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.
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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
NIGHTMARE ON SESAME STREET
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
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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.]
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18
NIGHTMARE ON SESAME STREET
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.
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20
NIGHTMARE ON SESAME STREET
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.
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(continue on bottom of page 21)
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
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22
NIGHTMARE ON SESAME STREET
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.
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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.
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26
NIGHTMARE ON SESAME STREET
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
NIGHTMARE ON SESAME STREET
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
NIGHTMARE ON SESAME STREET
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
NIGHTMARE ON SESAME STREET
The Hasbro Company:
Hasbro, inc.
1027NewportAve.
Pawtucket,RI02862
Phone:401-431-8697
Fax: 401-431-8535
President,CEOandDirector:AlfredJ.Verrecchia
SesameStreetandK’NEXtoysmade/assembledinChina.
SesameStreetandK’NEXtoysmade/assembledinChina.
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.
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