Changes in immigration laws in the mid-1980s made it illegal to employ undocumented workers. Once these contractors were breaking the immigration law, it was a simple step to breaking wage-hour, tax and labor laws. And undocumented workers' fear of discovery helped keep sweatshops a dirty secret until recently. But immigrants do not cause sweatshops. Rather, it is the low prices set by the retailers and manufacturers at the top of the apparel industry chain that create the conditions for sweatshops to flourish and for immigrants to be exploited.
Sweatshops are part of the underground economy and operate in violation of many laws.
Transactions are often in cash, and sweatshops actively work to avoid detection, so it is difficult to count them. It is possible to make an educated guess, however. There are fewer than 1,000 garment manufacturers who parcel out production to about 22,000 contractors, some of them legitimate and some of them sweatshops.