Alta Gracia Hits a Snag


Georgetown University - The Hoya - by Mariah Byrne - September 9, 2011 One year into its experiential endeavor promoting human rights in manufacturing, clothing line AltaGracia is starting to feel the economic squeeze.

Georgetown University - The Hoya - by Mariah Byrne - September 9, 2011 One year into its experiential endeavor promoting human rights in manufacturing, clothing line AltaGracia is starting to feel the economic squeeze.

Knights Apparel Chief Executive Officer and founder Joseph Bozich along with two of the Alta Graciaworkers gave an overview of the factory's progress thus far and the challenges it faces Tuesday night at a presentation in ICC Auditorium. The event was intended to promote awareness of Alta Gracia's unique business model and the company's relationship with Georgetown University.

Alta Gracia, an offshoot of Knights Apparel that began in 2010, deviates from its competitors by guaranteeing its employees a living wage.

The living wage — a "dignified salary" in its Spanish translation — is over three times the legal minimum wage in the Dominican Republic. Workers of Villa Alta Gracia in the Domincan Republic are able to afford nutritional food, education for their families, sufficient housing and health care with their salaries.

"We felt that the best way to deliver the message is to give everyone the chance to meet the people behind it," said professor John Kline, who conducts independent research on Alta Gracia. "What we were trying to do was to facilitate the telling of the story."

This past year, Georgetown hit the list of the top-10 campuses in the United States in the purchase of AltaGracia products. The university bookstore currently showcases about three racks dedicated to AltaGracia apparel.

"Not only is it a fantastic product, but it's also a social awareness program that we definitely get behind," said Hope Anderson, the department manager for clothing and gifts at the campus bookstore. "At the moment, we can sell it faster than Alta Gracia can get it to us."

In the year since the start of production, Alta Gracia has adhered to all of the standards set by the Worker Rights Consortium (WRC), an independent labor rights group of which Georgetown was a founding member of in 2000. The factory is monitored by the WRC. The 133 Alta Gracia workers have also registered the Union of Alta Gracia Workers with the government. Although establishing unions in similar industries is often met with preventative layoffs, the employees of Alta Gracia encountered no resistance when trying to organize.

"Alta Gracia is about providing hope. It's about helping people free themselves from poverty," Bozichsaid. "It's about providing consumers with the opportunity to change someone's life with their purchase."

Maritza Vargas, an Alta Gracia employee and general secretary of its union, stressed that the factory workers are proud of their jobs and encouraged the presentation's audience to push for better working conditions everywhere.

"Our work is dignified work. Our salaries allow us to lead dignified lives. It's beautiful," she said through a translator.

While Bozich and the Alta Gracia employees are excited about the effects of the living wage in the community surrounding the factory, they have faced serious challenges obtaining financing. Retailers are reluctant to give them floor space, and the factory is producing at an unprofitable level of 40 percent capacity.

Kline and fellow Georgetown professor Edward Soule have been conducting independent research funded by the university's Reflective Engagement Initiative and other university grants on the sustainability of the Alta Gracia model.

The results of their research have been compiled in "Alta Gracia: One Year with a Living Wage," a preliminary copy of which was available at Tuesday's event. The Welcome Week event was sponsored by the Landegger Program in International Business Diplomacy, the Georgetown Licensing Oversight Committee, the Kalmanovitz Initiative for Labor and the Working Poor and the Georgetown Solidarity Committee. The program also received the support of the College Democrats, the Center for Social Justice and First-Year Orientation in Community Involvement; the pre-orientation program's T-shirts this year were printed by Alta Gracia.

Kline and Soule plan to expand on their initial conclusions, visit the factory again and publish the finished report by the end of the year.

Kline and Soule's report finds that the operating costs for Alta Gracia are almost three times that of its competitors. The authors suggest that the higher productivity of Alta Gracia workers, due to less frequent employee turnover and absenteeism, can close some of the cost discrepancy. However, the authors acknowledge that higher individual efficiency alone is not enough of a solution. The largest supplier of college apparel in the United States, Knights Apparel, offers Alta Gracia products in over 400 bookstores nationwide. Alta Gracia products perform as well in university bookstores as their competing brands; however, the product line accounts for only a small percentage of Knights' overall production.


According to the report, to achieve a sustainable production level for the current factory, at least 40 bookstores must devote six or seven percent of their floor space to Alta Gracia products. Bozich said Knights' other clothing lines are currently keeping Alta Gracia afloat.

While Bozich thanked University President John J. DeGioia and the university for promoting corporate social responsibility, he and his employees emphasized the importance of informing others about the beneficial impact of purchasing Alta Gracia goods.

"We're a long way from being where we want to be," Bozich said. "If I had one request, it would be, help us spread the word."

Bozich hopes to eventually employ more people, build more factories and serve as an example for his competitors.

"Hopefully we'll have such a success story that other companies will want to follow suit," Bozich said.

Although the profit margins indicate that Alta Gracia is struggling, Kline stressed that the brand has proven its ability to sell and impact the lives of the factory workers.

"The product has proven itself in these bookstores where it's been given decent floor space," he said.

He added that this will be the year in which Alta Gracia's long-term sustainability will become apparent.Bozich expects the brand's business to double in the coming year.

"The next 18 months is a crucial time for it," Kline said. "At this stage, it is really dependent on the collegiate consumer."

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