'But BusinessWeek spoke with seven former workers who say they were offended by what they called a highly sexual atmosphere at American Apparel. They told stories of senior managers who pursued sexual relationships with less senior colleagues and rewarded their favorites with promotions, company cars, and apartments. "It was a company built on lechery," says a former stock person. "I thought it was a male contemporary perspective on feminism, but it turns out to be just a gimmick," says another ex-employee. And another: "I made sure to stay away from the store when I knew [Charney] was coming into town. It's not one person -- he's aiming for all women.'
I generally have little patience with these kinds of feel-good PR-ish stories.
The negative Business Week article you referenced is doing the same thing as the source article, just the other way around. We can cherry pick negatives all day long, and the other side can do the same with positives.
Take the lessons learned from AA and make your company better. Just because Charney is a little nutty doesn't mean the entire company/model/approach is bad. In fact I think the business world could use more people like Charney with an open mind and free (if not overly-sexual) spirit.
Forcing sexual relationships on people who work for you (or forcing a reporter to watch you have sex and masturbate) is hardly "overly-sexual".
You said yourself that AA workers could not get the same money anywhere else... surely you don't think it's acceptable for Charney to ask his employees for sex in a situation where (according to you) he has so much power?
In general, I think good/legal vs. bad/illegal behavior is not just a simple sum of its parts where, say, 3 good deeds outweigh 1 rotten deed by 2. After all, when your neighbor turns out to be a child predator, are you going to say, oh well, that's ok because he's been a good church-going fella for the past 30 years?
If the sexual-harrassment allegations are true, then I hope the folks being harrassed get vindication in court and appropriate compensation for their damages. But I don't think anyone is arguing that AA is making lots of money because the boss sexually harrasses female workers. And even if you weigh AA's management in your moral balance and find it wanting, you can still learn something from the non-repulsive things that the company does.
If your high-school calculus teacher turns out to be a child predator, that doesn't invalidate everything you learned about calculus.
Charney doesn't deny taking part in any of the activities described in the article.
How is it an allegation when the guy himself admits it was true?
And sorry but your argument is typical straw-man. Of course I don't claim that all apparel ever manufactured disappears out of existence now that we found out about AA's lack of ethics. What's the point of assigning me a clearly retarded point of view just so you can refute it?
Obviously I don't think that it would invalidate an entire branch of mathematics if I found out that my calculus teacher was a pedophile. However, I would strongly object to an article profiling a him as ethical and using him as an example for others to follow, which is what the original post is doing.
You seem to be approaching this article, and the comments about it, as some sort of effete referendum on whether American Apparel is a good company.
Nobody here cares about American Apparel. In the context of news.yc, this article is only interesting in what lessons it might hold for other entrepreneurs. As has been said before, there are undoubtedly positive lessons and cautionary lessons.
Um, are you sure you're quoting the article properly?
FTA:
>Charney says all three women did substandard work and gave no indication before they left that they had felt harassed. Charney says he never engaged in any of the acts of which he is accused.
So 8 paragraphs in, the first time mentioning his "sexual crimes" in workplace culture, where it ALSO mentions his response, is a flat out denial. Where does he say he did this?
> After all, when your neighbor turns out to be a child predator, are you going to say, oh well, that's ok because he's been a good church-going fella for the past 30 years?
A good deed doesn't undo an evil deed, surely - but the opposite isn't true. All the bad deeds in the world doesn't make your good deeds less good.
It reminds me (as your comment did) of my basic premise on journalism over the last 20 years - which is that the business section is full of complete hosebags who've demolished the entire industry in the name of PR and capitalism.
For what it's worth, when I first stepped of the plane from Europe,
one of the things about America, that was most obvious, was the highly nonsexual atmosphere.
I've since grown completely accustomed to it, and now don't even notice it, except when I go back to Europe.
I don't think that's quite correct. The US is very sexualized, strip clubs, pornography, it's everywhere. But it's repressed sexuality. It's like the "war on drugs" - repression means that there's more money to be made.
"This should embarrass the heck out of any executive who thinks he has to outsource in order to find cheap labor. Or at least call into question his fundamental competence as a leader. If American Apparel can manufacture low margin clothing efficiently enough to beat the sweatshops (in California no less), then anyone should be able to. If they try hard enough."
I think he's misunderstanding why their business model works. Sending your commodity product to China to be make extra-cheaply is one strategy. Building a high quality product that proudly displays it's Made-In-America-ness and tugs at our patriotic heartstrings while charging 2x the price as the Chinese-outsourced competition is another. There is room, in almost every industry, for both a Kia and Lexus.
And you do have to outsource to find cheap labor. $12-$15/hr with full benefits is not cheap for a factory. I'm guessing he just misphrased what he meant on that one.
Are you still having a problem? Sometimes the Twitter widget in the sidebar at http://venturehacks.com gets a little wacky. I believe it is an intermittent problem with Twitter.
I thought it was very rare but perhaps it is more common than I thought? Is anyone else having this problem? I couldn't recreate it. Thanks!
I am sick of stories of how American Apparel is such an ethical company because they pay above minimum wage and make their clothes in the US.
Yes, the clothes are manufactured in LA and the workers get above minimum wage. However, at $25,000/yr that doesn't put them anywhere near a livable wage, and the fact AA makes and promotes what is essentially child porn far outweighs any benefits.
American Apparel's just marketing towards the people who hate outsourcing and think buying "Made in America" is important. Most people fall for it; some do not.
A better question: why is an American more entitled to a job than someone living in another country? The problem with most of the outsourcing arguments I've heard is that they come down to value judgments.
I think the most cogent (and only) argument for nationalistic job protectionism is the fact that others are doing the same thing. If other countries are reluctant to export their jobs to you, you would obviously avoid exporting jobs to them in the vain effort to keep employment in your country alive.
I do agree though - I dislike the "Buy American" argument. Other countries are out-doing us in many industries; instead of pledging allegiance to buying inferior goods and services, we really should be fighting back by innovating and simply making our stuff better.
If other countries are reluctant to export their jobs to you, you would obviously avoid exporting jobs to them in the vain effort to keep employment in your country alive.
Why might one want to keep employment in his country alive?
I'm not necessarily saying that AA doesn't "make and promote what is essentially child porn", or that I'm siding with them in any way, but "child porn" is a pretty heavy accusation and you should back it up.
The link you provided doesn't count. First of all, it's on a humor site, and the article definitely seems to belong there. But more importantly, it provides no evidence that the models are underage, the photos it shows don't appear to be me to be of underage girls, the photos aren't quite pornographic anyways (though admittedly fairly close), and it doesn't even provide any evidence that AA attempted to represent them as underage.
I'm completely willing to hear that AA is making child porn--I have no affiliation with them or anything like that--but you haven't provided any evidence and therefore you shouldn't make the claim.
I agree with you that the models are not technically underage. Moreover, I know from previous articles about AA that they make the models sign releases confirming they are of age. However, I think that makes it worse and I'd like to explain why.
We already know that what constitutes porn is in fact subjective and was "officially" defined as such by the Supreme Court:
So what I'd like to point out is that the very reason that AA needs that little signature is because they know they are (1) making pornographic ads and (2) using models that look underage. If either of those two were untrue, the free-wheeling, open-minded people at AA would surely not resort to legal means to cover their ass.
As far as not providing evidence, what is harder evidence than actual photos of AA ads? I don't see how it's relevant what website they are posted on. Photos are photos.
But hey, I am happy to link to more. If you don't think these are prime pedophile material, I don't even know what to say... you must be one "open-minded" dude.
Actually, any photographer doing commercial photography gets a release with an age statement to protect themselves against later lawsuits by parents. If the kids are underage they need the parents signature. A company using the photographs for commercial purposes will usually requires the release.
I'd say that some of the ads are somewhat pornographic, yeah. That said, I think it's fairly standard practice for anyone producing pornographic material, and more importantly anything which could be construed as pornographic, to get a release, just to be safe. In fact, people almost always try to cover their asses legally; companies doing "iffy" stuff often check to make sure it's legal first, etc. Thus, it's not clear that they know they are making pornographic ads OR that they think their models look underage, just from that evidence, even if those are both true.
As for the photos: like I said before, they don't look underage to me. I've additionally checked this with a few people in other age ranges of both genders, just to be sure I wasn't crazy, and the consensus was that they all looked like adults.
P.S. The "If you don't agree with me, you're <insert x here>" approach is a bit silly. I do like to consider myself pretty open-minded, though :)
"Somewhat", as in it has some mild nudity and sexually suggestive poses, rather than showing any genitalia or actual sexual acts. There's hardcore porn, and there's softcore porn, and then there's this.
My main point wasn't the exact amount... I rather wanted to point out that the puff piece describes their pay as "significantly above minimum wage" while in fact it's a measly $25,000/year. I may be wrong on this one but I live in New York and I know LA is only slightly cheaper... there is absolutely no way one could live in New York on $27,000 (got the figure via a cost-of-living city-to-city calculator). I mean, it's theoretically possible but not without subjecting yourself to Dickensian living conditions.
there are a ton of people working at burger king or other restaurants, street vendors, bus ticket attendants, broadway ushers, and busboys that make less than that in nyc
Its certainly not impossible. 15$ an hour is pretty good.
It's one thing to make sweeping statements about welfare of others and quite another to realistically look at what that means. I am nitpicking here but let's go over your list... I am going to break it down to how it really is in NYC (I presume LA is not that dissimilar):
burger king workers - unhappiest people you'll see anywhere... excepting teens and other temporary situations, completely unemployable outside the fast food industry
street vendors - mostly cash income, probably make more than reported $15/hour, probably have other jobs to support them through the cold winter months
bus workers - unionized, make up to $70k/year
broadway ushers - mostly volunteers or actors who only work until they "make it" and only to network with other theater people
busboys - mostly illegal mexicans with little other choice, excepting some high end restaurants where they make more than $15/hour and do it as an apprenticeship to better paying jobs
I think most people who say that $15/hour in a major city like New York or LA is pretty good would not themselves concede to subsist on that little while working that hard... and I know what I am talking about, having done some of those hard-labor jobs when I first immigrated into the US. It only works in temporary situations such as students or apprenticeships, or as a means to support higher artistic aspirations.
I would bet all of my money that not a single person on here (including those 6 who upvoted your comment) would choose a career of a $15/hour laborer for themselves, and I think it's a little patronizing to say that it's ok for others.
I agree with your post, but I think it's disingenuous to say that $15 is unacceptable because the rest of us won't accept it. My first job after moving out was $15/hr (though not in NYC, makes a difference), and while things were tough it was survivable.
Would I go back to that job? Hell no. Hauling literally tons of crates around a factory floor each day, climbing inside freezing semi trailers in the dead of the Canadian winter... all for that kind of pay? No thanks.
But that doesn't mean the pay is necessarily bad for someone who, unlike my fortunate self, has no choice in his jobs.
I do agree though - in the context of NY or LA, $15 is not a survivable wage. It's the kind of wage that keeps you alive, but also keeps you trapped in your dead-end job forever.
Unless that wage also includes health care, loans you transportation (in this case, Bikes, but its better than nothing), and lets you attend English classes, which could translate to a valuable job skill.
(I'm not saying that migrants/immigrants can't survive in our culture without English, but being able to speak English well might allow them to find careers they otherwise couldn't.)
Also, keep in mind that workers get paid for any ideas they come up with that save the company money or create a new product. They'll also get paid if they're used a model. So there are side-opportunities.
In the end, it boils down to treatment. Sure, its not a great, glamorous job -- making clothing -- but they're treated well compared to their contemporaries in the industry. At the end of the day, a 50K job coding is a 50K job coding, but I think we'd all rather work at the place that has free back massages and a ball pit.
So, you obviously know how to use the computer but you would choose hard labor for $15/hour when you can easily at the very worst temp for $20/hour sitting in a comfortable chair?
"I think it's a little patronizing to say that it's ok for others"
Ok? What does that mean? If the market value of someone's work is less than or equal to $15/hour, then $15/hour is a fair price for it.
Surely there is nothing more patronizing than to suggest that people should be paid some arbitrary amount that seems appropriate to you, rather than the actual value of the work they do.
Blurry, it's great that you choose to live in one of the most expensive cities in the entire world thereby requiring you to make much more than the average American, however most people don't. These immigrant workers are living in and around LA (already) and I highly doubt there are many employers lining up to pay them the same wage.
First, I am choosing to live in New York to exactly the same degree that those immigrant workers are choosing to live in LA, second, I am an immigrant worker myself, and third, as I pointed out, cost of living in LA is very similar to NY.
If you want to argue on facts, let's hear something other than "you are spoiled and don't know what you are talking about".
You can live in NY on 15$ an hour. You need some roommates and you toss the car for public transport, but after that your cost of living is not that bad. Back in collage I shared my room with some random stranger and it was one of the best times of my life so sharing a room with someone is not the end times.
At 15 US$ * 50h/week * 48weeks/year = 36,000 U.S. dollars living at 515 West 52nd St., New York, NY 10019 a 2bed 2 bath is 5,265 / month, but it's a block from central park. Split that 4 ways and your rent is 1,316 but utility costs are low. (There are cheaper places to live around there, but these are fairly nice apartments.)
15 US$ * 50h/week * 48weeks/year = 36,000 U.S. dollars, I had a single apartment at 1050$ per month and a car while making 38k so I know it's reasonable to make it like that. Now having a wife and kids on that is not going to happen in that area but NY is more a place for the young or the rich.
Edit: 36k = 28k take home so about a grand a month after rent.
PS: Trying to make it on 15$ an hour in NY, NY might seem stupid, but a good internship can be worth it.
You are also picking the most expensive place to live. A big 2 bed 2 bath duplex with a porch is $2100 up in Harlem (near 125th). That's $525/month split 4 ways, also a very nice apartment (3 blocks from the 4/5/6 train).
If you work between lower manhattan and 33rd st, you can live in Jersey City and rent a huge 3 bedroom for $1500 ($500 split 3 ways). Commute time is 15-25 minutes.
You can live 15 minutes outside manhattan on $25k/year, and do just fine. I did this my last year of grad school. Does having a roommate count as "Dickensian" living conditions?
What is your point? That "living with a roommate" == "dickensian living conditions"?
The only changes to my lifestyle now that I have a real job is a) no roommates and b) I drink outside more than in, and pay less attention to happy hour.
What is more ethical; Employing workers for pennies in foreign countries or employing workers here in the US for several dollars above min wage?
The foreign workers are probably elevated much more (in comparison to their peers) because of their job than their counterparts here in the US are, but exploiting this difference in living wage is not ethical in the least.
Is embargoing the foreign workers, who are perfectly willing (an understatement in many cases) to work for the wages being offered, ethical? I would say no.
I personally feel that free trade is far more ethical than nationalist isolation/protectionism. (It's not just Americans that are "entitled" to a high standard of living.)
'A 5,000 person, $500 million low margin clothing company, operating from a single factory in the least business-friendly state of one of the highest "cost" manufacturing countries. Beating the overseas sweatshops and still growing rapidly.'
"Bland and tasteless"? What exactly are you expecting from a T-shirt? I appreciate that there is a manufacturer of cotton casualwear which does not feature logos. I don't want to pay for the privilege of wearing a billboard.
And on the "make something good" tip -- AA makes the highest quality and best-fitting T-shirts I have ever found. MILES ahead of the crap on sale at Walmart. And they do it in America, so they've earned the right to put it in their name.
Company politics and alleged lechery aside: they make a damn fine product, without cutting corners.
gamache, I think he's referring to the AA retail store and the various brightly and unusually coloured offerings inside of it, while you seem to be referring to AA's T-Shirts.
I am the owner of an AA tagged T-shirt; black, with a modest picture of a prinny on it, of good quality. So I see your point about the stuff being "good." But as to what's on display in the retail stores, their "designer fashion" is really truly gawd awful. I wouldn't call it "bland and tasteless" though--it is a full-on assult on one's sensibilities.
Taste is a very subjective thing. I try not to criticize other people's fashion sense. Obviously, many people are willing to pay for the designs of American Apparel.
Having a logo or not has nothing to do with the fact AA looks ugly as hell. Many great clothing brands do not show their logos on some of their clothes.
"I don't want to pay for the privilege of wearing a billboard."
Your are paying $20 for a plain grey t-shirt. You don't think you are paying for the AA billboards that are everywhere??
Having a logo or not has nothing to do with the fact AA looks ugly as hell.
Again, I am not sure what you want from a T-shirt. AA shirts fit me great -- better than any other manufacturer. What is ugly about a T-shirt that fits?
In my subjective view, it just makes me sick to see American Apparel in other countries and people go in and see that "Americans" are about looking like 1970s high schoolers. Like it our not this brand does represent us.
Have you worn their clothing? Their tri-blend and 50/50 blends are the most comfortable shirts you can buy. Wear one of their shirts and you won't compare them to Wal-Mart again.
And if you don't want to pay retail, just get them on Amazon. You can get yourself a basic shirt for $6 (and the aforementioned tri-blend for $9). There's a reason why a huge number of bands/artists print on AA shirts, they are top end.
I own about 4 of these skirts, in various colors: http://store.americanapparel.net/rsa7302.html . It's the most versatile, comfortable, awesome piece of clothing I own. I also have several of their dresses and leggings & socks, though I tend to stick with neutral colors and veer away from shiny.
Anyone who dresses themselves according to mannequins styled by 20something art school students is bound to look slightly ridiculous to those who are not 20something art school students. Most of the clothing is great and reasonably priced for what you get.
Did you ever stop to think that maybe Wal-Mart clothes are 1/3 the price of what they should be?
And I don't think we as Americans needs to worry about other countries perceiving us as unsophisticated because of AA. There is plenty of low hanging fruit in that category already.
You are trying to get into the ethics of global trade. I am sure glad I can get a plain t-shirt for $6 instead of $20 for AA. But that is a long debate.
Checkout http://en.wikipedia.org/wiki/Zara_%28clothing%29
They are a Spanish company that do not outsource their manufacturing. They are able to keep their costs down and deliver the most trendy clothes to their customers. AA on the other hand made clothes that look like 1970s gym clothes.
I usually don't care about apparel brands, but I have a soft spot for Zara. They consistently create nice stuff for very reasonable prices. They make clothes that make you look good, as opposed to having attractive models looking good in whatever.
Their way of doing business is very hackerish (in the best sense), beautifully optimized.
No external marketing, they just put their shops in premium locations, letting their wares "sell themselves".
Instead of paying expensive prima donna fashion designers, they employ an army of young talented people. They constantly monitor fashion trends and consumer demands in their stores, able to rapidly innovate designs and change their production.
Their retail stock is completely rotated every two weeks, which creates an extra incentive for customers to come back to check what's new, and it also encourages Woot-type impulse buying, as the stock is limited.
Using state-of-the-art logistics they manage to keep their operations costs down. Thanks to their efficient procedures they can create better products for cheaper prices than competition.
Having worked in the manufacturing industry I can tell you this with utmost confidence:
Wal-Mart clothes are precisely as expensive as they should be.
All other clothes are also precisely as expensive as they should be.
There's a very good reason why Wal-Mart clothes are 1/3 the price of other chains, and that word starts with a capital Q. Most people who've never worked in manufacturing call bullshit on this, but they really, really don't know the reality of things. You do get what you pay for.
Besides quality, Wal-mart also has one of the most efficient stocking and distribution processes in the world. There is hardly a facet of their business that the folks in Bentonville have not tried to optimize.
'But BusinessWeek spoke with seven former workers who say they were offended by what they called a highly sexual atmosphere at American Apparel. They told stories of senior managers who pursued sexual relationships with less senior colleagues and rewarded their favorites with promotions, company cars, and apartments. "It was a company built on lechery," says a former stock person. "I thought it was a male contemporary perspective on feminism, but it turns out to be just a gimmick," says another ex-employee. And another: "I made sure to stay away from the store when I knew [Charney] was coming into town. It's not one person -- he's aiming for all women.'
I generally have little patience with these kinds of feel-good PR-ish stories.