October 06, 2015
I recently read this article in the Los Angeles Times (online version) about American Apparel entitled "Can American Apparel really stay in L.A.?" I've been somewhat following the company since I heard about them having financial problems. I care because I respect what they have done by keeping their production within the U.S. .
The article discussed several scenarios for possibly "saving" the company that is American Apparel, via moving their production facilities. A few points that were made really got me stirred up.
American Apparel workers used to earn an average of about $12 an hour, but many have said that slowing production has pushed down their pay to about California's minimum wage of $9 an hour.
However, that pay still vastly outstrips the minimum wages of workers in countries with a heavy garment manufacturing industry. Indonesia, Vietnam and Bangladesh all have monthly minimum wages that can go as low as about $70, according to the International Labor Organization."
And then later in the article:
Teenagers and twentysomethings -- American Apparel's core demographic -- simply don't differentiate between products made in the U.S. and made elsewhere, analysts said. More important to them is the price and quality of the garment.
"Millennials are having a hard time getting a job," said Lloyd Greif, chief executive of Los Angeles investment banking firm Greif & Co. "The last thing they are worried about is, 'Hey, I want to pay $10 or $20 more for a garment that's made in America.'" "
HERE'S THE THING:
The article states, and, I have also observed this to be true that the young college grads and the younger members of our workforce are having a hard time finding jobs. Meanwhile, analysts are opinioning that American Apparel should move their production facilities to somewhere like Asia where the cost of labor is cheaper.
You know, so that more broke millenialls can buy thier cheap T-shirts and struggle to find jobs in America. But as long as they look trendy and fashionable doing so...
When people talk about moving jobs offshore - such as the production facilities within American Apparel - they are quick to think that it's not their job that would be affected. People usually go to the place in their mind of the minimum wage laborer. BUT it is NOT just that!
Let's take a look at an example of a U.S. based production facility. I am being general here, but I think I can still make my point. A garment sewing factory needs not only (typically) lower wage workers to sew the garments, but they also need management for the workers. And how about raw materials procurement? Someone has to source the yarns to make the fabric that makes the T-shirt. I haven't even touched on reception, facilities management, machine repair, etcetra. All of these are mid-range jobs that also disappear when the production facility moves to somewhere like Asia.
If more companies stayed in USA, more mid-level jobs would be kept here too. And perhaps those unemployed millenials could fill those roles and have another way to get their cheap trendy clothing - via an employee discount.
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