Generosity is my middle name.
Rarity's Sweatshop is where Rarity lives and sells her dresses. It is also the home of over 30 illegal Mexican immigrants whom Rarity has enslaved to make her dresses.
It's pretty obvious that Rarity didn't want anyone to know about her secret, because the sweatshop looks like a lovely boutique on the outside even though, on the inside, there are dimly-lit floodlights and Mexican people sitting in rows, making dresses. There are also lots of frightening-looking posters hanging everywhere on the walls, with Rarity's face, that say, "RARITY IS WATCHING YOU."
However, in DRESS.MOV, the secret was soon discovered by Twilight Sparkle when she needed Rarity's help to find the Elements of Harmony. After hearing Twilight bang outside her door (and yelling for her to get her fat a** out there), Rarity told her that she couldn't help because she was busy entertaining family. Twilight then poked her head through the door's mail slot and noticed all of the Mexicans at work, discovering her friend's secret of how she makes her dresses. Rarity explained how everything she does to the Mexicans (showing them the posters and whipping them) is a silly family game (except they're not allowed to leave), but Twilight thought that it didn't exactly seem ethical. The fat, greedy unicorn then replied by saying, "Everyone knows Mexicans aren't real people."
When Rarity goes back to running her sweatshop, it was also revealed that she acts like she treats the Mexicans very nicely, even though she was shown breaking the fingers of a Mexican boy named Paco with her horn magic (when she was really trying to make them better) and spitting in glass for a Mexican teenaged-woman to drink. She even pretends to not understand what they are saying when asked about the payment by the said Mexican woman.
While Rarity went outside to bring a new dress for Fluttershy (and then bragged about how generous she was for doing so), she suddenly got captured by a tall, muscular Mexican man, who told her that he and the other slaves are going to start a "revolución." The frightened Rarity told Mexican man that she couldn't understand his "ghastly taco language," so he clearly repeated what he said ("revolution"), much to her horror. Rarity has then been held captive in her sweatshop ever since, as the Mexicans brutally beat her up.
One year later, in SWAG.MOV, it was shown that the sweatshop had been completely vandalized throughout the revolution; as it was shown with broken windows, untrimmed grass, and graffiti on the door that's written in Spanish (which is translated: "Here lives a f***ing b**ch!"). Inside, everything looked the same as a badly-bruised Rarity was shown sneaking over to the door while the Mexicans were sleeping. Luckily, she was able to succeed.
It's possible that the sweatshop is no longer in the ruins after Rainbow Dash (who was revealed to be in a coma after Fluttershy supposedly killed her) performed a sonic rainboom that reversed time back to when Discord was about to kill Applebloom.
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