Emma Sidoriak

Chapter 7: CONCLUSIONS

Why the Garment Industry Fell in Schuylkill County

While the garment industry disappeared from Schuylkill County, it did not disappear from the world completely. The decline of the industry in the county and its movement throughout the world is a result of several dynamic forces. I have broken down the reasons for the fall of the industry in Schuylkill County into three perspectives: 

1. ‘The Garment Industry on Wheels,’ an industry perspective that uncovers a recurring theme of the movement of the garment industry around the world; 
2. ‘Dissolving Boundaries,’ an international perspective, which describes economic changes due to free trade, globalization and cheap foreign labor; 
3. and ‘The Transformation of America,’ a national perspective about how the development of the American people and the economy have altered the nation’s industrial focus. 

Unfortunately for Schuylkill County, all of these forces—the nature of the industry, international relationships, and national changes—worked together to move the garment industry elsewhere. Schuylkill County was highly dependent on the industry that once seemed so prosperous and stable, and its economy struggles to bounce back.

The Garment Industry on Wheels

The garment industry is unique to other industries in the manufacturing sector because it is mobile. History has demonstrated that the garment industry moves to areas around the world that have the lowest cost of labor. This industry is undoubtedly attracted to and dependent upon large labor forces that are willing to work intensively and at low wages with little to no benefits. This type of labor force allows textile and apparel firms to remain competitive by producing and selling at the lowest possible cost while, many times, reaping substantial profits. Apparel-producing firms constantly seek the cheapest labor forces to establish their own factories or make contracts with factories in these labor hotspots (Wolensky, 2003). As Sol Chanin, the ILGWU president from 1975 to 1986, has remarked:

Relocating the garment industry was not difficult since it is an industry on wheels. It can be moved overnight because capital investment is low, machines are easily transportable, and materials are comparatively light. Clothes are not steel, not copper, not lumber, not brick (Wolensky, 2003, p. 109).

Low capital investment for the garment industry has facilitated mobility and allowed firms to target their focus on minimizing the cost of labor.

The modern textile and garment industry began to develop in the 1700s during the Industrial Revolution in the West. With the help of important inventions, such as the cotton gin and the sewing machine, mass production became possible (Warshaw, 2011). Since its establishment, the textile and apparel industry has tended to develop in areas with large, cheap labor supplies, and when the cost of labor rises, firms tend to look elsewhere for production.

By the 1800s, the garment industry became well-established in New York City because of an influx of immigration to the area, which provided an abundance of cheap labor. As mentioned in previous chapters, the cost of labor in New York began to rise because of development. In the early to mid-1900s, firms moved production to regions with lower-costing labor, like Schuylkill County where the economy was devastated and young women desperately looked for work to support their families (Bonancich & Waller, 1994). This pattern has continued to repeat since then. From the anthracite coal region, the industry began to re-locate in the 1950s to the newly industrialized countries of Japan, Hong Kong, South Korea and Taiwan as well as states in the southern United States. In the 1980s, after Asian labor costs started to increase and barriers gradually disappeared, Mexico, the Caribbean and Central America became the new target for the industry. In addition, there was a shift of textile and apparel production in the 1980s and 1990s to other Asian countries with cheap labor in Thailand, India, Indonesia, Malaysia, Sri Lanka, Bangladesh and China (Bonancich & Waller, 1994). More recently, Los Angeles, California has experienced expansion due to a high population of immigrants willing and able to work at very low wages because of lax regulations (Bonancich & Waller, 1994; Blumberg & Ong, 1994).

The following data tables help to illustrate the United States’ relationship with the textile and garment industry today. Tables 7.1, 7.2 and 7.3 include data from the International Trade Administration (2014) and show the top fifteen countries that export textiles and apparel to the United States in terms of dollar value (Table 7.1) and quantity of exports by square-meter equivalent (SME) (Table 7.2). The last column of Table 7.3 shows the average cost of textile or apparel goods per square-meter equivalent that is exported to the United States. 

Table 7.3 reveals that the countries of Italy, Sri Lanka and Guatemala export goods with the highest value among all of the top countries that export textile and apparel to the United States. These higher average values may indicate that the countries’ textile and apparel exports are of higher quality or that the cost of labor is more expensive than other countries’ labor forces. The countries at the bottom of Table 7.3—Korean Republic and Taiwan— have a low average value of textile and apparel exports to the United States. These low average values may indicate that the countries’ textile and apparel exports are mass-produced, have lower quality and lower wages and benefits compared to the other top exporting countries to the United States. It is important to note that Korea and Taiwan are both part of the first Asian countries to which textile and apparel manufacturing moved. Perhaps, the reason their exports have a low average value per square-meter equivalent is because they specialize in fabric, which is a less complicated good than apparel.

Dissolving Boundaries

Further facilitating the mobility of the garment industry, especially since the 1980s and 1990s, has been globalization, or the dissolving of boundaries among countries throughout the world. Trends of globalization include the improvement in transportation of physical objects and people; increased exchange of information and ideas via the Internet and networking systems; and growth in political and public support for free trade.

While the improved transfer of products, people and ideas have certainly affected the garment and textile industry, the ever-trending free trade throughout the globe seems to be a dominating force that has led to changes in the garment industry. Specifically focusing on the United States, free trade agreements have emerged since the 1980s to reduce barriers that have otherwise distorted the global economy. According to the International Trade Administration, the United States is currently negotiating free trade agreements with Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam through the Trans-Pacific Partnership (TPP) (The International, 2014). Another substantial free trade agreement affecting the United States is the North American Free Trade Agreement (NAFTA) with Canada and Mexico, which was put into effect on January 1, 1994 (Bonancich & Waller, 1994).

Free trade has been important in changing the garment industry because it has altered costs of production through the phasing out of tariffs and quotas (Bonancich & Waller, 1994). While many of the interviewees were opponents of free trade, specifically NAFTA, because it negatively affected their lives as workers, the phasing out of trade barriers have also positively affected their lives because they are also consumers. Because of the implementation of free trade policies, consumers benefit as they are able to buy cheaper and a wider selection of goods. According to American Apparel and Footwear Association (AAFA), the percentage of American families’ average expenditure on clothing has been dropping since 1977. In 1977, 6.6% of an average American family’s Personal Consumption Expenditures (PCE) was spent on clothes and shoes. In 2006, this amount dropped to 3.9%, and in 2010, the amount dropped further to 2.4% (AAFA, 2007; U.S. Department of Commerce, 2014). Since 2010, there has been a slight increase of PCE on clothes and shoes, and the latest report estimates it to be 4.8%. While this is a slight increase, it is still below the percentage of consumption of earlier decades (U.S. Department of Commerce, 2014).

Despite the drop in households’ budgets on clothing and shoes, Americans continue to buy more clothes and shoes than ever before as a result of the low prices. Figure 7.4, taken from a report by AAFA, shows that the retail prices of apparel have declined over the period of 1998 to 2007, yet overall retail prices, which encompasses products besides clothing and shoes, have been increasing during the same time period (AAFA, 2007). Because of the changes in the textile and apparel industry, Americans benefit by saving money on such goods.

The Transformation of America

Throughout the 20th and into the 21st century, the United States has become one of the most powerful economies in the world. The nation has one of the highest standards of living, which has made possible a better education system and higher-paying jobs. More knowledge and higher salaries have increased Americans’ opportunities for leisure time and travel—all of which arguably improve life in the nation as a whole.

From the American workers’ standpoint, the high standard of living and better education leads them to demand higher wages and better workers’ rights and benefits. Americans wish to utilize their skills and knowledge to obtain higher-skilled and higher-paid jobs. As the United States continues to develop, the cost of the American labor force has been increasing. This effect has been illustrated in the garment industry with the emergence of unions in New York during the 1930s and then in the Northeast region during the 1950s, lasting until the end of the region’s garment industry.

The increase in the cost of the American manufacturing labor force can also be seen in Figure 7.5, which shows a positive trend in the real hourly compensation in manufacturing over time. The graph compares each year’s hourly compensation to the base year, 2002. In other words, each year’s real hourly compensation values are equal to the percentage of the value from 2002, and 2002 is equal to 100. These values are based upon the consumer price index and are, therefore, adjusted for inflation (United States Department of Labor, 2012).

As Americans began to value better education and working conditions, the United States experienced a shift in the labor force. Americans increasingly preferred to utilize higher skills in service jobs and jobs in the fields of science, technology, engineering and mathematics.

According to some of the interviewees, the parents of younger workers pushed their sons and daughters to get a better education. Some people became embarrassed, feared, or just preferred not to work in the manufacturing sector because it was associated with poor “sweatshop” conditions. These reactions show that the emerging American labor force is no longer as interested in low-skilled work, nor willing to work in conditions comparable to those in less developed countries. Bonacich and Waller further explain this idea relating it to the movement of the industry:

U.S. manufacturers were able to survive by investing and contracting in Latin America and the Caribbean, while U.S. labor standards were undercut and U.S. workers lost their jobs. This impact is sometimes rationalized by the claim that the United States industry suffers from a labor shortage...but the shortage, in large measure, is a product of not paying competitive wages by U.S. standards (1994, pp. 32-33).

Other interviewees explained that they liked their jobs in the garment factories of Schuylkill County, but many of these workers were either older and had different views than the emerging American labor force or they already had jobs that required more skill and decision-making, working in departments like finance, costing and product development. The emerging labor force in the United States is different than the past because they value more rights, better working conditions, higher wages, and jobs that involve a higher level of thinking.

Restoring a Garment Industry in Schuylkill County

As explained previously, the garment industry was a main driver of Schuylkill County’s economy; restoring this industry could possibly boost the economy once again. Schuylkill County incurs two major setbacks in establishing a competitive garment industry. The first is the shortage of people willing to work at low wages comparable to foreign competition. The county also suffers because citizens were never able to organize a new industry that would reboot the local economy.

A New Labor Force: Immigration

Many citizens of Schuylkill County who once worked in the textile and apparel industry expressed that they enjoyed their jobs and would be willing to go back to work if the factories were still there (Parker, 1999, Interviewees). Despite this enthusiasm, as mentioned in the previous section, these workers seem to be in the minority, and there is still a shortage of Americans willing to work in low-skilled positions. With the increased trends of globalization and foreign interest in immigrating to a land with better opportunities, immigrants may provide a potential new labor force that could restore the garment industry in Schuylkill County.

There exists a parallel between America’s shift in free trade and what would happen if America enacted more open immigration policies. As explained previously, free trade was a force that led the garment industry to leave the United States; however, the country adapted and became more competitive in other sectors, like services and jobs requiring higher education. Just as the country adapted and developed due to free trade, the United States should do the same with an influx of immigrants.

According to an economist, Alvaro Vargas Llosa, immigration benefits society as a whole by filling the demand for low-skilled labor. Including more immigrants in the labor force would increase economic productivity and, therefore, decrease the price of some products (2013). If immigrants were to fulfill the demand for low-skilled labor in garment factories, it would also enhance the demand for natives to take on higher-skilled jobs, such as jobs in management, engineering, product development and design.

Opening up the country to more immigrants would require a lot of political effort and decision-making from the federal government. Due to the trends of globalization, the push for freer-flowing immigration has become a topic of increased interest and supported by more than those in the past; however, more time and support is necessary to enact such policies. If such policies were enacted, Schuylkill County would have to make plans right away to start up factories in the area and attract the new immigrant population.

Finding a Niche

If Schuylkill County were to re-establish a garment industry, companies would certainly have to find a new niche in the global apparel market. The products once made in this region have proven to be more successful elsewhere where the labor force is larger and willing to work in poorer conditions. Given the nature of the American labor force and the development of the country, the new garment industry of Schuylkill County would do better producing at a smaller scale and with higher standards of quality.

According to the American Apparel and Footwear Association, in 2012, 97.5% of the apparel in the United States was imported (AAFA, 2013). The textile goods that remain manufactured in the United States include clothing from American Apparel and Filson; select Pendleton woolens; True Religion and Texas jeans; and Wigwam socks (Consumer, 2013). These apparel brands are competitive in the United States because their goods tend to be of higher quality or, in the case of American Apparel, produced in the Los Angeles area where there exists a high immigrant population and people that are willing and able to work in less favorable conditions than the typical American labor force of today.

Despite the push for free trade, the government still protects some textiles through copyright laws or because they are products for the military. Protecting both of these types of textiles are important for the promotion of innovation and the safety of our country. To become more competitive in the garment industry, Schuylkill County could also look into developing a platform for more inventive products or ones that would benefit the United States’ military.

Social responsibility and sustainability are also increasingly valued in the United States and other more developed markets. According to Consumer Reports Magazine, when all other things are held equal, American consumers are more likely to buy from companies that give back to the local community, treat their workers well, express public support for causes the consumers believe in and engage in environmentally-friendly practices (2013). Because efforts to promote better corporate culture and a healthier environment utilize higher levels of education, research and development, Schuylkill County has the potential to excel above textile and apparel industries in less developed countries.

Restoring a garment industry in Schuylkill County may not be a conventional method to boosting the economy, especially given all of the forces that have acted against it. It is critical to consider, however, given its local historical importance and the area’s current economic devastation. If renewed, the new garment industry should certainly operate differently to be competitive and successful in today’s global market for textiles and apparel.