Throughout the clothes manufacturing industry, a number of factors have fallen into place which has led to incredible changes in free market trade and the international textile market. In order to increase profit margins and stay in business, cost cutting measures, such as outsourcing and the like, have been implemented, making the textile and apparel market an internationally dependent one. Since the 1950s, there have been significant changes made to the market that will be detailed here; what's more, the consequences of these changes will be detailed, in terms of the workers, the industry, profits, and more.
The most major change to the international textile and apparel market that has been seen is the advent of globalization. With globalization, a company can have many distinct components in many different countries, with global communication making it easy for these parts to work in tandem. In the textile business, cotton became the commodity by which globalization was felt in the marketplace. Formerly the purview of the United States, which exported cotton more than any other country in the world, found itself falling behind as China and India began producing more cotton for less money.
In the 1950s, the New Deal led to the development of labor unions among the tailors and apparel workers along the East Coast, making it a Mecca for apparel businesses. In 1957, courts allowed the International Ladies' Garment Workers' Union to assemble and operate as they pleased; this led to an agreement between labor and management within the US apparel industry (Rosen, p. 98). However, because the unions became more powerful, businesses turned elsewhere to get cheaper labor. Outsourcing their business and their labor out of state, wages declined dramatically in New York City in order to keep up with the demand, and allow work to remain local.
Another factor that led to increased outsourcing was the sudden influx of African Americans and Puerto Ricans who came to New York City, leading to white flight into the suburbs. These conditions led to futile attempts to bring factories out of town and avoid an indigent population in the cities (Rosen, p. 102). This led to US producers going to Japan and asking for Japanese manufacturers to make cotton blouses and other clothing for export to America. Because of the lower wage costs involved in paying Japanese workers, clothing could be sold for much cheaper, and therefore could be sold for less money while still maintaining a healthy profit margin. Imports then became incredibly prevalent in American apparel, constituting 15-30% of the market depending on the type of clothing (Rosen, p. 106).
The result of creating such a direct conflict between international free market trade and US domestic protectionism meant a slow, gradual decline in domestic workers' rights, while jobs were being outsourced left and right to countries with workers who could be paid much less. As labor unions exerted more and more of their power, companies opted instead to send their work elsewhere. This had a dramatic effect on domestic workers in the US. In the 1950s, labor unions were more powerful than ever, guaranteeing its members a fair wage and good benefits. By the time the 1980s came along, hundreds of countries were exporting to the United States, creating a $7 billion apparel trade deficit. More than 750,000 jobs have been lost in the textile and apparel industries as a result of outsourcing, leading to an effective loss in bargaining power and a diminishing of work conditions among domestic workers (Rosen, p. 118).
The United States economy became increasingly import-centric in these times; it was cheaper to bring in products without having to incur incredible expenses to create them. As a result, these companies profited greatly from outsourcing and importing initiatives; paying their workers a fraction of the cost they would US workers, their profit margins managed to skyrocket while still bringing the savings down to the customer. However, this left an increasing number of workers out of work, leaving fewer people to have the disposable income to purchase these clothes. The US economy then began to come under fire from Congress, as initiatives were started to attempt to coerce companies into keeping jobs local. By the time the 1970s rolled around, a number of catastrophic events, from the energy crisis to the Vietnam War, meant that growth of business was slow, and wages continued to lack growth. The apparel trade deficit was born, and continues to increase to this day (Rosen, p. 113).
With this increasing dependents on imports, the United States had to reevaluate many of its political relationships in order to maintain good relationships with import-friendly countries. The MFA (Multifibre Agreement) was created in the 1960s to "balance the needs of developing countries for export markets with the needs of the United States and other industrialized countries to regulate the rate at which imports of textiles and apparel expanded" (Rosen, p. 111). However, the quota restrictions placed on the MFA were easily skirted by exporting nations, often resorting to cheating in order to get their products out.
Social structures in America were dramatically changed over the course of the 1950s and 1980s, due to the changes in the apparel and textile industry. Displaced workers became the norm, as imports grew and more jobs were outsourced; feeble government attempts to compensate these workers (including the Trade Adjustment Assistance Program) have been met with little progress (Rosen, p. 113). More and more urban immigrant areas and rural communities became the centerpieces of the textile industry, as these smaller areas only had textile factories to employ these citizens. What's more, women have had longer unemployment periods than men in the clothing manufacturing realm; this level of displacement increased as outsourcing rose, and men struggled to keep their jobs at the expense of women's opportunities (Rosen, p. 116).
The changing social structures of America also opened up new markets for outsourcing. The increasing need for women's work wear, due to women entering the workforce, led to the initiatives for importing higher-quality fashion wear, increasing the quality of the clothing coming out of developing countries. This helped to threaten further domestic clothing companies, as the caveat that exported material was low quality no longer strictly applied (Rosen, p. 112).
Works Cited
McLaughlin, Kathleen E., China Economy, Apparel Evolve, Posted Monday February 25, 2008,
Last Edited Wednesday July 23, 2008, WWD Issue 2008/02/25.
Rosen, Ellen Israel. Making Sweatshops: The Globalization of the US Apparel Industry. Ewing,
NJ: University of California Press, 2002. Print.
