The Australian

By Teresa Ooi

One of America's biggest makers of university logo T-shirts, Joe Bozich, is on a mission to change the sweatshop model of clothing manufacturers.

The founder and chief executive of Knights Apparel, which turns over $US300 million ($286m) annually, wants rag traders to adopt an ethical model that pays workers a living wage.

"College students in the US have been campaigning they want to buy clothing from manufacturers who are socially responsible and pay their workers a fair wage. There has been a rise in ethical consumption and consumers are becoming more vocal about what they want to buy," he said.

Sales of ethical products reached $US57 billion last year while fair-trade products have grown from almost nothing in 2000 to more than $US6bn in 2010.

"I wanted to create a new model by paying a living wage to workers in poor countries so that they can afford to send their children to school and have the same opportunities we have," Mr Bozich said.

He built a factory in the Dominican Republic 18 months ago where he employed 135 workers and paid them a living wage — three times the minimum wage in the country. The factory, which produces more than 100,000 college T-shirts and sweatshirts, will cover all costs and even make a small profit this financial year.

While the factory only makes a minor contribution to KA's bottom line, the fact it is a sustainable business is its best selling point.

"I am convinced our new brand Alta Gracia producing apparel by paying workers a living wage will work with consumers who will switch brands if they are tied to a good cause and the price and quality are the same," he said.

After being struck with multiple sclerosis, Mr Bozich realised life was not only about making a profit in a competitive retail market.

"I went through a series of personal tragedies which changed my life and gave me a different perspective. The idea of just working to make money and gain market share seems much less important."

While the rise in wages in the Dominican Republic has pushed up the price of the T-shirts and sweatshirts, Mr Bozich was prepared to live with lower margins.

KA makes a profit of $US30m a year and has the exclusive rights to the National Basketball Association and the National Hockey League in the US. It is also the largest supplier of licensed college apparel in the US.

Mr Bozich, who has 20 years' experience in manufacturing, is visiting Australia as a guest of the US Studies Centre at Sydney University and the NSW Department of Trade & Investment.