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Impact of China on Apparel World Is Debated

As many as half of the region’s 62,000 garment workers could lose their jobs when trade barriers are dropped on Jan. 1, 2005, according to labor activists, although local economists and others downplayed or dismissed the claims.

The warning came as the Garment Worker Center and Sweatshop Watch issued a joint report highlighting the impact of China’s entrance to the World Trade Organization and the opening of U.S. markets to more imported goods.

“This is going to devastate the L.A. garment industry,” said Karin Mak, project coordinator for Sweatshop Watch and co-author of the report. “It makes it easier for large retailers and manufacturers to have their production in the countries that offer the cheapest labor. This leads to what we call a race to the bottom.”

Mak said the effect of those low-priced imports would be added pressure on sweatshop workers to accept below-minimum wage jobs and longer hours, the closure of some local apparel producers and the loss of as many as 30,000 jobs.

“Now,” she said, “in order to compete without these (quota) regulations, workers will feel the pressure to work longer hours for lower wages and if there is the threat of unionization at a plant, the retailers and employers can just say they’re going to pack up and move someplace else.”

The groups called for improved job training programs and the legalization of the large number of undocumented workers in the industry.

The timing and validity of the report, however, was questioned by some industry advocates and manufacturers who said that the biggest hits have already been taken by the L.A. textile and apparel industries.

When the North Atlantic Free Trade Agreement became effective in January 1994, there were more than 79,000 people employed in L.A.’s garment trades. By 1996, that number had spiked to 97,500 before beginning a steady decline to the 62,600 counted by the California Employment Development Department in May. Since 1993, garment sector employment has shrunk by 21 percent.

“There could be some impact,” said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp., whose research was used in the report. “(But) I don’t think it’s going to be draconian. They have already felt the pain of production going offshore.

Shift already made

After NAFTA, L.A. transformed itself from an industry of long-run production lines making underwear, generic shirts, pants and sweat suits to so-called flash fashions that have a short shelf life requiring nimble manufacturing abilities.

L.A. is also a hub for fashion design, sample-making and marketing operations.

Those niches will remain in L.A. because just-in-time delivery and quality control demands by retailers make overseas production impossible. What’s more, stricter customs requirements since the 2001 terrorist attacks have added to delays receiving goods from overseas.

“We weren’t going anywhere before and we’re not going anywhere now,” said Dov Charney, chief executive of L.A.-based American Apparel Inc., which employs 2,300 people. “We’ve developed a business strategy where it’s advantageous to manufacture within the marketplace.”

Delays and quality control issues among foreign-made goods have impacted niche markets so much that Ilse Metchek, executive director of the California Fashion Industry, claims that her group receives at least four calls per week from local companies looking for L.A. factories to remake goods originally sewn abroad.

“These (sweatshop) reports that come out that do not understand the mechanics of the business are so frustrating to us,” said Metchek. “There is a tremendous shortage of workers for factories that do what we do best, which is the flash fashion, the fashion of the day.”

The groups started to compile the report during the summer, and critics questioned why they waited more than two years after the Chinese entered the WTO compact to start their research.

To this, garment workers said it’s better late than never. “With the report, some people said it’s kind of late for us to be doing it,” said Kimi Lee, executive director of the Garment Worker Center. “And we said, nobody else had done it.”

Josh Kamensky, a spokesman for Los Angeles City Councilman Eric Garcetti, said there is still time to protect garment jobs, which Garcetti believes are in danger without quotas.

The councilman, chairman of the housing, community and economic development committee, which oversees $66 million to $100 million in annual Workforce Investment Act funding, plans to help create job training programs that would teach workers how to design clothes and create patterns and samples of clothing lines.

“We can take a real hard look to see where we can meet industry’s needs in terms of helping upgrade workers’ skills, which makes it worthwhile for local apparel firms to invest in skill-intensive technologies,” Kamensky said.

That would coincide with efforts by the Garment Worker Center and Sweatshop Watch to step up efforts to create what they claim is a much-needed safety net for garment workers.

Atop the agenda are stepped up efforts to work with local and statewide political leaders in hopes of getting legislation passed that would offer tax incentives to factories and retailers that keep their manufacturing operations local.

In the past, activist groups have seen unionization as a means of securing adequate wages and benefits. Now, they concede that such attempts, which had always been met with management resistance, would only speed the push to manufacture overseas.

China was admitted to the World Trade Organization in December 2001. Once it became part of the WTO, most Chinese quotas on U.S. exports were eliminated and the U.S. applied the WTO Agreement on Textiles and Clothing, phasing out quotas on those goods made in China. (The Bush administration, bowing to industry pressure, did extend quotas on Chinese-made socks earlier this year under the terms of a bi-lateral trade agreement.)

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