In Part I of a larger series looking at the state of fashion manufacturing, entitled, Reshoring Fashion Manufacturing: Will it Live up to the Hype?, we examine the status of the apparel manufacturing industry within the United States and what it would require to reshore - or shift manufacturing centers back to domestic soil - this industry.
While the United Stated continues to be a major participant in the $3 trillion global fashion industry, U.S.-based fashion manufacturing – those involving apparel, shoes, and accessories – has faced a steady decline. According to the U.S. Bureau of Labor Statistics employment in apparel manufacturing has decreased by more than 80 percent between 1990 and 2011.
To put that in perspective, a leading world power with a robust consumer economy that boasts $250 billion in annual fashion sales has more than the 90 percent of its apparel and footwear manufactured overseas. That’s not to say that the U.S. doesn’t participate in manufacturing at all, between February 2013 and February 2014, the U.S. exported $5.8 billion worth of apparel; but it also imported $80 billion worth of apparel during that time.
It would appear that the U.S.is either unwilling or unable to produce domestically at a scale proportionate to its demand, but this was not always the case. In the 1960’s the roles were reversed: Over 90 percent of goods sold domestically were produced domestically. As recently as the mid-1990’s, over 50 percent of the garments sold here were made here. However, with the turn of the century came a shift in the U.S. (and global) fashion consumption rates and sourcing trends with the majority of manufacturing jobs now being offshored (the process of relocating business processes to another country, typically to take advantage of lower costs as is the case here) primarily to Asia.
In a country that is by many accounts still in the throes of a recession, and in an industry inundated with global competition, a rapidly changing business landscape, and mounting supply chain complexities, the reshoring of manufacturing has been heralded as the solution. Experts consistently assert that a return to domestic production will remedy everything from rising unemployment to the unethical labor and environmental practices that are commonly associated with overseas manufacturing. But is this true?
GETTING BUSINESSES TO COME BACK HOME
With the U.S. accustomed to free trade and the fashion industry adapted to global sourcing and all the perks that come with it – including rock bottom pricing – perhaps the most daunting step in the reshoring process is the first one … Getting businesses to come back home. There has been a recent uptick in domestic fashion manufacturing. Not the boom economists are hoping for but enough to point to a possible solution: The power of the consumer. As consumers express a desire for more ‘Made in the USA’ products, businesses have followed suit. Big companies like Brooks Brothers and Patagonia have reshored some of their production. And smaller (once merely startup) brands – like Juicy Couture (which long bore tags that read, "Made in the Glamorous USA," Shinola, Unis, Reformation, and Zady – have long observed the benefits of producing in the U.S.
If we consider the anti-fur movement and its ability to essentially shame even some luxury brands into using faux fur, the ability of public perception to dictate business practices becomes apparent. As of 2013, even Walmart, with its emphasis on low prices, pledged to increase its purchasing of American made goods by $50 billion over the next 10 years. Though Walmart’s pledge is in relation to all goods and not just fashion ones, it provides context for the current business climate.
However, even if consumers are increasingly demanding ‘Made in the U.S.’ products and some businesses are opting to reshore their manufacturing operations, we cannot expect industry wide changes. It is worth noting, after all, that as history has proven, consumers tend to be more likely to spend according to their finances than their political leanings. So, if the reshoring ‘movement’ is to be more than a political talking point or a well-intentioned marketing slogan, it will have to have the force of the government behind it, which explains how reshoring manufacturing has made its way into the conversation of the current presidential elections.
Both candidates have offered their proposals. These include variations of making offshoring so expensive and inconvenient that businesses decide against it and making domestic manufacturing desirable in the form of tax breaks.
If you are looking for an analysis of the ‘right’ path forward when it comes to fashion manufacturing, politics is almost certainly not the right place. Though it is worthy of attention that government intervention played a significant role in the offshoring movement, with the implementation of the North American Free Trade Agreement between signatories Canada, the United States, and Mexico being a prime example. At this point government involvement in the reshoring movement seems likely, but anything less than barring U.S. companies from importing their foreign made goods will not guarantee the steady return of jobs, only make them more probable. Actually enacting such a ban, if even possible, will contravene long held beliefs in favor of the free market.
It is clear the road ahead will be long and tumultuous. Throughout this series we will explore the potential advantages and drawbacks of reshoring efforts. Proponents of reshoring have lofty goals, but will it live up to the hype?
Gabrielle Turnquest is a graduate of The University of Law (formerly The College of Law) in London. After law school her interest in fashion lead her to explore the industry from the side of the creative through studies at the Fashion Institute of Design & Merchandising in Los Angeles, California.