Garment industry in the US since the 18th century
Throughout the 18th century, garment manufacturing was largely a household industry in the US. In the colonial period, textiles were costly and tailoring shops in large cities catered only to the well-to-do section of the American society. This left the average families out in the cold, for the women and children to produce at home. From the raising of the raw materials, through the spinning and weaving, to the sewing was done within the four walls of every home. By the 1820s, some enterprising tailors used their slack time to make low-quality garments to be worn by slaves and sailors. But as the century approached its midpoint, more and more respectable Americans started to buy their clothes off the rack. This was especially true of men whose clothes were loosely fitted and not subject to the volatility of fashion as that of women (Soyer, 2005). During the 1830s, the textile industry became more established in America and machine-made clothes were made available to average households.
The ready-made garment industry marked its beginning in America history in the early eighteenth century. The first clothing factory was established in 1831 in New York City. Ready-made clothing, however, remained a small part of the American garment production which was still dominated by home-made clothing. New York rapidly became the center for ready-made garment trade because of its regular shipping connections with southern states.
The Civil War brought in demand for soldier’s uniforms and this increased production and led to the introduction of standardized sizes. This period also marked a substantial technical change in the mode of manufacture of garments. Sewing machines were introduced into the manufacturing sector and the shift moved from manual to machine labor. This important technical innovation also paved way for mass production of clothing in the industry.
Between 1880 and 1920, over 2 million Jews migrated to America to escape persecution in their home countries and to take advantage of the economic opportunities in America. Their skills as artisans and factory laborers became important assets in their adopted homeland. The sheer concentration of Jewish immigrants within the industry helped shape the American garment industry, especially in New York. From the middle of the nineteenth century to the end of the twentieth, the garment industry was the largest manufacturing industry in New York City. By 1900, Eastern European Jews constituted a majority of both workers and employers within the industry. One of the many accomplishments of the Jewish contractors was the priority given to ethnic ties in the industry, as they hired mostly members from their own community. The Jewish immigrants built the New York based garment business into a billion dollar industry.
By 1900, ready-made clothing was within reach of the average working family as well. Distribution was handled through a network of department stores and shops across the country. The stores offered a wide range of goods that catered to a broad spectrum of customers. Special sales, newspaper advertisements and window displays worked to entice customers. Mail order catalogues were introduced to reach customers in small towns (yumuseum.org).
Followed closely behind the Jews, in flooding the garment industry, were Italians, especially Italian women. On the one hand, they worked in large, modern shirtwaist factories and on the other, they made up approximately 98 percent of the home workers within the industry (Soyer, 2005).
The Whwholesale clothing industry also played a crucial role in shaping the American labor movement. Many of the rights taken for granted by workers today were fought for by the garment unions. Concepts of such significance today, such as arbitration and collective bargaining, emerged out of the struggles of the then garment unions (yumuseum.org). By the second decade of the twentieth century, workers formed unions that became powerful forces within the industry. Although the Jews had mastered dramatic strikes in the 1880s and 1890s that sometimes succeeded in rising wages or working conditions, they seldom worked in stable organizations. The turning point, however, came with a wave of strikes held between 1909 and 1913. Strikes of shirtwaist makers in 1909 and of cloak makers in 1910 established the International Ladies’ Garment Workers’ Union while the 1913 strike of men’s tailors led to the emergence of the Amalgamated Clothing Workers of America (Soyer, 2005). These unions helped bring a certain measure of regularity to the garment industry.
Throughout the post World War I period as well as the Depression in the 1930s, unions acted as an important force in stabilizing the competitiveness and fragmentation within the industry. They fought for the bottom hierarchy of manufacturers and ensured good wages and working conditions for them. Even though New York was the center of the fashion industry in the early twentieth century, after World War I, the focus shifted to the West Coast, mainly Hollywood, California. Inspired by film fashion, Californian garment industry started to flourish, and began to hold a more prominent influence on American fashion in general.
World War II brought about patriotic manufacturers who converted their plants to provide uniforms and other necessary war equipments for American soldiers. It also saw the plummeting influence of Parisian fashion and this encouraged the American fashion designers to grab the reins and move forward. This marked the prominence of the American fashion industry. After the war, prosperity in America encouraged consumer goods and every sector in the garment industry expanded. As accessories such as footwear, gloves, hats, belts, and jewellery, all integral part of the women’s apparel flourished, so did the garment industry.
Structure of the Industry
The garment industry is made up of a string of players with defined roles (Reich and Samet, 1996).
Manufacturers – they are primarily engaged in the design, cutting and sewing of garments from fabric. Some of these manufacturers are contractors or subcontractors, which generally manufacture from materials owned by other firms. Larger manufacturers often contract production to such contractors or subcontractors. Some manufacturers are vertically integrated, producing the textiles from which garments are made.
Merchandisers – they generally design and market clothing but contract the actual production to manufacturers.
Buying Agents – they locate, qualify and inspect foreign suppliers/producers of garments, negotiate with suppliers/producers and monitor production for quality control and compliance with other standards. They are used by American companies having limited presence abroad.
Retailers – they are engaged in the distribution, merchandizing and sale of garments to consumers. They include department stores, mass merchandisers, specialty stores, national chains, discount and off-price stores, outlets and mail order companies. With the advent of technology, there has also emerged on-line shopping and interactive television.
Intense competition in the US retail sector has led to significant restructuring of the industry. One of the factors influencing this trend has been the rise of mass marketing stores and discount retailers, such as Wal-Mart, with low overhead costs and thereby distributing products at lower prices. These non-traditional retailers have displaced a significant share of the sales of the traditional department and specialty stores. This has resulted in an increasing number of bankruptcies and consolidations in the retail sector, which has in turn led to a smaller number of large players in this sector.
Change in consumer attitude is attributed as the biggest influence behind the restructuring of the retail sector. Consumers have become more cautious with their spending money and are increasingly demanding good quality products at lower prices. In response to this, retailers are utilizing new technology to facilitate communication with suppliers and speed the distribution of goods.
Shrinking consumer demand, coupled with higher material costs, has placed intense pressure on the manufacturers. Unable to pass higher costs to the consumers in a market where demand is low, both manufacturers as well as retailers are suffering from low margins. To keep pace with this competitive market, both the retailers as well as the manufacturers are prompted to restructure and consolidate. While the retailers engage in manufacturing their own private labels, manufacturers involve in opening up outlets to generate more sales (Reich and Samet, 1996).
The garment industry is one of the largest manufacturing industries in the United States. It is dominated by less than 1,000 manufacturers who churn out production to about 20,000 contractors and subcontractors, all of whom enter and exit the industry easily. It has been long identified that the labor-intensive U.S. garment industry is characterized by extreme price competition, low wages and an immigrant workforce.
United States is one of the largest markets in terms of consumption. In the early 2000s, the garment industry in the US faced intense competition due to increased imports from China. China has been one of the major exporters of garments to USA and remains the largest garment supplier to the country.
Today, the American textile and clothing industries are dying. The US textile industry that represents thousands of American jobs is increasingly threatened by job losses and market share losses because of trade agreements and increasing imports.
In 2005, the WTO terminated the Multi-Fiber Agreement’s (MFA) quota system for apparel, a piece of legislation which was created in 1974 to set export quotas on all textile-manufacturing nations. These limits served to protect America’s ailing garment industry from being overwhelmed by a growing number of cheap imports from developing countries, particularly China.
Unexpectedly, however, the quota system also resulted in positive growth for developing nations starting their own garment industries. They were made competitive by the fact that all the other countries were working under imposed quotas as well. In an unregulated, quota-free market, developing nations with their emergent garment industries would have been incapable of competing with large and lucrative markets like the United States and Europe.
The quota system forced buyers, including large retailers like J.C. Penney, the Gap, Wal-Mart, and Ralph Lauren, to purchase textiles and ready-made garments from a long list of developing countries. The developing countries held prospects of cheaper labor and thereby, cheaper production costs. This allowed developing nations, such as China, to build up their garment industries. Since 1994, the U.S. has lost 800,000 textile and apparel jobs. China has gained a large share of the apparel market for compelling reasons: raw materials, cheap labor, weak or nonexistent unions in the industry, and a vertically-integrated apparel industry that allows them to manufacture their own textiles.
With the elimination of most quotas in the year 2005, Chinese imports surged by more than 1,300 percent in some categories. Chinese imports dictated such low prices that the American manufacturers found it difficult to maintain healthy competition. With such an abundance of cheap clothing flooding the market, the American retailers were left no choice but to put pressure on their suppliers to cut prices on the goods they design, import and distribute.
Apparel imports grew 13.0 percent to $6.1 billion in January 2007, compared to January 2006. China remains the largest apparel supplier to the country, with a share of 33% of total US apparel imports in January 2007, an increase of 12.6% up from a share of 20.4 % in January 2006. Other countries from where garments are imported in the US are:
• Bangladesh
• Indonesia
• Pakistan
The future trend gauged for the industry, which has already found a substantial place within the industry even today, is the outsourcing of areas of production to lesser developed countries. Manufacturers and retailers are turning to low-cost suppliers abroad to supplement their production in the US. Manufacturers contract out assembly operations to overseas contractors. In other cases, manufacturers are shifting production abroad to take advantage of lower costs and preferential trade programs.
Merchandize Liquidators - With the prominence of retailers in the US garment industry, a major fraction of the industry, the middlemen or the wholesalers, were cut off. As a retort to this, a new brand of wholesalers was formed, calling themselves the Merchandize Liquidators. They offer sales of wholesale clothes among other products through pallets and allows for worldwide distribution at very reasonable prices. They attain the products through wholesale closeouts and liquidation, overstock and surplus from department stores around the country. The wholesale price advantage they gain is passed on to the consumers through lower prices. They make products available globally and commit to delivery across the globe. Customers can access major brands such as Ralph Lauren, DKNY, Tommy, Yves St. Laurent and many more and attain them at lower prices than retail stores. They involve in alluring customers through lower prices and appeal to the impulsive traits of a consumer.
References
Reich, Robert. B and Samet, Andrew. J, The Apparel Industry and Codes of Conduct: A Solution to the International Child Labor Problem? U.S. Department of Labor, Bureau of International Labor Affairs, Diane Publishing, 1996. p. 15 -22.
McClear, Sheila, Companies Will Run from U.S. and Mexico to China, India, Vietnam, Labor Notes, February 2005 Issue. (http://www.truthout.org/cgi-bin/artman/exec/view.cgi/36/8913) – viewed on March 18, 2008.
Soyer, Daniel, A Coat of Many Colors: Immigration, Globalization, And Reform In New York City’s Garment Industry, Fordham University Press, 2005. pp. 5-8
Glenn, Susan A. Daughters of the Shtetl: Life and Labor in the Immigrant Generation. Ithaca, N.Y.: Cornell University Press, 1990.
Garment Industry in U.S.A. (http://www.men-clothing.net/usa.html) – viewed on March 18, 2008
Merchandize Liquidators (http://www.merchandizeliquidators.com/Wholesale_Apparel_Distributor.htm) – viewed on March 18, 2008.
Yeshiva University Museum. A Perfect Fit – Exhibition Highlights, 2005. (http://www.yumuseum.org/APerfectFit/highlights.html) – viewed on March 18, 2008
