For what it's worth, these factories are technically legal but they're anything but okay. A lot of companies still use horrible sweatshops to make their goods, especially companies that sell things cheaply, like Target and Walmart (have you seen that documentary "Wal-Mart: The High Cost of Low Price"? There are some interesting interviews with Chinese factory workers.)
Often these goods are produced in "Special Economiz Zones" in rapidly industrializing countries like China (which only really started industrializing in 1978) and India, where not only economic laws but all sorts of laws are more "liberal" and where factory workers are exploited.
It's hard to always avoid places like this, because SO many companies use SEZ labour - and granted, not all of these factories mistreat their workers. Many do not. But this is one of the main reasons I buy designer whenever I can, and I usually buy secondhand if I can't buy designer: I don't like contributing to this!
Just another reason why FAKES ARE NOT OKAY, because almost ALL fakes are made in illegitimate factories in horrible conditions: why would you want to wear a poor person's suffering on your arm?!