We asked if they could get into trouble for talking to us. The factories in Las Mercedes are contractors who work for known brands and retail stores. Global contract-production is a cutthroat business. So here, as in the rest of the apparel business, the retailers are the 800-pound gorillas. For large orders, however, retailers can simply cut back the price they are willing to pay, forcing the contractor to pay less than the legal minimum.
Pricing starts from the retailer and moves down.
It doesn't start from the bottom, from the real costs of making the garment. The retailer can always go down the street and find someone who can make it for less. Typically, labor costs are 10 percent of the retail price of clothing under standard conditions in the United States. When we visit their homes we can see the result. Tipitapa is a sprawling town twenty minutes from the Free Trade Zone.