The recent bankruptcy filing of American Apparel Inc. has created a media stir – not least because the downtown L.A.-based clothing company has for years bucked the trend of outsourcing garment manufacturing to countries with dirt-cheap labor. The firm, founded by the controversial Dov Charney, built its brand around the creation of “sweatshop-free” American jobs, raising the tantalizing prospect that even in the era of globalization savvy U.S. entrepreneurs could generate employment here at home and make a tidy profit as well.
Predictably, American Apparel’s financial struggles are being framed by some as a cautionary tale. “There is too much emphasis being placed in having things made in America,” Lloyd Greif, chief executive of investment banking firm Greif & Co., told the Los Angeles Times recently. Josh Arnold, an equities analyst, echoed this sentiment, declaring in the same article, “This manufacturing model makes no sense. … It costs way too much money.”
One can assume that neither Greif’s nor Arnold’s livelihood depends on “having things made in America.” The same cannot be said, however, for millions of Americans either presently employed in manufacturing or displaced by the loss of U.S. manufacturing jobs. For them – which is to say, for nearly 10 percent of our nation’s working and middle class – “Made in America” means making it in America.
More broadly, the cavalier dismissal of business models predicated on creating American jobs runs counter to the very notion of reversing the nation’s historic levels of economic inequality. There is simply no way to rebuild the American middle class without bringing back at least some of the manufacturing jobs that have been off-shored as well as creating industries that rely on homegrown labor.
President Barack Obama and congressional leaders understand this well, which is why numerous “Make It in America” laws have been enacted in recent years. These statutes cover everything from incentivizing U.S. manufacturing to penalizing outsourcing to providing funds for workforce training.
Activists also are pushing for new policies to create more American manufacturing jobs. One of the best examples is Jobs to Move America, a campaign spearheaded by the Los Angeles Alliance for a New Economy that is pushing for the billions of taxpayer dollars spent each year on trains and buses to be directed to companies that generate jobs in the United States. A core part of the project is to ensure that many of these transit jobs go to underserved communities where middle-class employment is particularly hard to come by.
But the Made in America movement is not confined to government contracts funded by taxpayer money. Many private-sector industries have been “reshoring” over the past several years, responding both to rising labor costs abroad as well as a growing consumer demand for locally produced goods. While the Trans-Pacific Partnership could undermine this trend, 60,000 U.S. manufacturing jobs have been added so far this year – a five-fold increase over the previous year.
Consumer pressure is making itself felt in other ways as well. According to Evan Clark, deputy managing editor at Women’s Wear Daily, “Millennials are very conscious of social issues and being environmentally friendly and all of that. So I think Made in the USA ethos resonates very much with that population.”
Clark’s assertion is borne out by numerous surveys. According to one study, 74 percent of consumers said a company’s “social consciousness” was either very important or somewhat important in what they buy and where they buy it. The embrace of socially conscious consumerism is even more prevalent among millennials.
This is something that was not lost on American Apparel when it trailblazed its way to success a decade ago. The company has since fallen on hard times, but the reasons are complex, and certainly not evidence that “Made in America” is a foolish gambit. On the contrary, creating or reshoring U.S. jobs is critical to bringing shared prosperity back home.
Cherri Senders is a longtime L.A.-area businesswoman as well as founder and publisher of Labor 411, a consumer guide to businesses that treat their employees fairly with good wages, benefits and working conditions.